THE 


LAW  OF  INSUEANCE 


FIRE,  LIFE,  ACCIDENT,  GUARANTEE 


BY 


WILLIAM  A.  KERB 

Of  the  Minneapolis  Bab 


ST,  PAUL,  MINN.: 

KEEFE-DAVIDSOIS'  CO. 
1902 


1902- 


COPYEIGHT,   1902, 
BY 

.  ^:EEF]p.*DAyiE)SO^'  QO. 


STATE  JOURNAL  PRINTING  COMPANY, 

Printers  and  Stereotype's, 

madison,  wis. 


PREFACE. 


To  treat  comprehensively,  yet  tersely,  of  a  large  matter  is 
always  difficult.  In  the  attempt  to  condense  this  work  within 
the  compass  of  a  single  volume,  I  have  been  obliged  to  treat 
but  sparingly  of  many  features  worthy  of  extended  discus- 
sion. It  has  been  my  aim  herein  to  furnish  to  the  practi- 
tioner and  the  student  of  non-maritime  insurance  a  brief 
statement  of  the  law  thereof  in  such  fonn  as  will,  with  the 
aid  of  the  references  and  citations  given,  be  a  convenient  aid 

and  guide  to  investigation. 

WiLLiAii  A.  Keke. 
Minneapolis,  Minn., 
March  15,  1902. 


TABLE  OF  CONTENTS. 


CHAPTER  I. 

INTRODUCTORY. 

§  1.  The  Origin  of  Insurance. 

2.  General  Classification. 

3.  Insurance  by  Contract — Definitions. 
4-12.  Divisions. 

13.  Basis  of  Contract. 

14.  A  Personal  Contract. 

15.  Nature  of  Contract. 

16.  Wliat  are  Insurance  Contracts. 

17.  Essentials  of  Contract. 

18.  Form  of  Contract. 

CHAPTER  II. 

THE  PARTIES  TO   THE  CONTRACT. 

§  19.  T'wo  Parties  Necessary. 
20.  Who  may  be  Insured. 
21-23.  Who  may  Insure. 

24.  Failure  to  Comply  with  Statute. 

25.  Vested  Rights. 

26.  Retaliatory  Statutes. 

27-28.  Corporate  Powers — Ultra  Vires  Contracts. 

CHAPTER  III. 

THE^  CONTRACT— FORM. 

§  29.  Oral  Contract. 
30-33.  Making  and  Enforcement. 

34.  The  Binding  Slip. 

35.  Merger  of  Oral  Contract. 
36-39.  The  Policy. 


Vi  TABLE    OF    CONTEXTS. 

CHAPTER  IV. 

THE  CONTRACT  (Continued)— MAKING. 

§  40-46.  Consummation  of  Contract. 

47.  Delivery  of  Policy. 

48.  Duration  of  Contract. 

49.  Renewal  of  Contract. 

50.  Revival  of  Policy. 
51-52.  Application. 

CHAPTER  V. 
THE  CONTRACT  (Continued)— OONSTITUENTSw 

§  53.  In  General. 

54.  Oral  Contract  to  Issue  Policy. 

55.  The  Lex  Loci. 

56.  Ctistom  and   Usage. 

57.  Application. 

58.  Endorsements. 

59.  Mutual  Organizations. 

60.  Amendments  to  Charter  and  By-Laws. 

61.  Consent  of  Members  to  Same. 

62.  Amendments  must  be  Reasonable. 

CHAPTER  VI. 

THE  CONTRACT  (Continued)— INTERPRETATION. 

§  63.  General  Principles  of  Construction. 

64.  Intent  of  the  Parties  Important. 

65.  Ambiguities. 

66.  Restrictions  and  Forfeitures. 

67.  Writing  Controls  Print. 

68.  The  Law  of  the  Place. 

69.  Custom  and  Usage. 

70.  Standard  Policies. 

71.  Policies  of  Mutual  Organizations. 

CHAPTER  VII. 

THE    CONTRACT  (Continued)— REFORMATION,    MODIFICA- 
TION,   AND    RESCISSION. 

§  72.  Reformation  of  Policy. 

73.  Modification  of  Contract. 

74.  DisalBrmance  of  Rescission. 


TABLE    OF   CONTENTS.  Vll 

CHAPTER  VIII. 

AGENTS. 

§  75.  In  General. 

76.  Actual  Authority. 

77.  Burden  of  Proof  of  Agency. 

78.  Presumption  of  Fidelity. 

79.  The  Agent  Must  be  Disinterested, 

80.  Destroyed  Property. 

81.  Whom  Does  Agent  Represent. 

82.  Statutory  Regulation  of  Agency. 

83.  Evidence  of  Agency. 

84.  Appointment  of  Agents. 

85.  Classification  of  Agents. 

86.  General  Agents. 

87.  Officers  of  Insurer  as  Agents. 

88.  Acts,  Admissions  and  Declarations. 

89.  Subordinate   Lodges   Agents   of  Grand   Lodge. 

90.  Special  or  Local  Agents. 

91.  Brokers  and  Solicitors. 

92.  Stipulations  in  Policy  Regulating  Agency. 

93.  Agents  of  Mutual  Companies. 

94.  Stipulations  in  Application  Regulating  Agency. 

95.  Acts  Before  Issuance  of  Policy. 

96.  What  Agents  May  Waive. 

97.  Fraud  and  Mistake^of  Agent. 

98.  Collusion  Between  Agent  and  Insured. 

99.  Knowledge  of  Agent  that  Warranties  are  False. 

100.  Powers  of  Agent  after  Policy  is  Issued. 

101.  Known  Limitations  of  Agent's  Power. 

102.  What  Constitutes  Waiver  by  Agent. 

103.  Limitations   Fixed   by  Policy. 

104.  Stipulations  that  Only  Certain  Officers  can  Waive. 

105.  Stipulations  that  no  Officer  can  Waive. 

106.  Stipulations  that  Waiver  Must  be  in  Writing. 

107.  The  Better  Rule. 

108.  ^Standard   Policies. 

109.  Collection  of  Premiums  and  Renewals. 

110.  Stipulations  of  Policy  Against  Giving  Credit. 

111.  Manner  of  Payment  of  Premium. 

112.  Power  of  Agent  to  Waive  Proofs  of  Loss. 

113.  Clerks    and    Sub-Agents. 

114.  Delegation  of  Powers. 

115.  Proof  of  Authority  of  Sub-Agent. 


Viii  TABLE    OF   CONTENTS. 

116.  Termination  of  Agency. 

117.  Adjusters. 

118.  Appraisers. 

119.  Ratification  and  Adoption  of  Act  of  Agent. 

120.  Duties  and  Liabilities  of  Agents. 

CHAPTER  IX. 

INSURABLE  INTEREST. 

§  121-122.  In  Property — ^Necessity  and  Nature. 

123-124.  Duration  and  Continuance. 

125-127.  In  Lives. 

CHAPTER  X. 

THE  PREMIUM. 

§  128-130.  Definition  and  Necessity. 

131.  Conditions  of  Policy  Regulating  Payment. 

132.  Manner  of  Payment. 

133.  Notice  of  Premium  Falling  Due. 

134.  Tender. 

135.  Waiver  of  Nonpayment. 

CHAPTER  XI. 
"WARRANTIES  AND  REPRESENTATIONS. 

§  136-138.  Nature  and  Definitions. 

139.  What  are  Warranties. 

140.  Representations  and  Misrepresentations. 

141.  Concealment. 

142.  Fraud. 

143.  Mistakes  of  Agents. 

144.  Waiver    of    Misrepresentation,    Breach    of    Warranty, 

Fraud  or  Concealment. 

145.  Burden  of  Proof  of  Breach  of  Warranty  or  Misrepresen- 

tation. 

CHAPTER  XII. 

THE  CONTRACT  AND  ITS  INCIDENTS. 

§  146-147.  The  Subject  Matter. 
48-150.  The  Risk  Assumed. 

151.  Terms,  Conditions  and  Stipulations  of  the  Policy. 
152-157.  The  Liability  of  the  Insurer. 


TABLE    OF   CONTENTS.  IX 

CHAPTER  XIII. 
NOTICE  AND  PROOFS  OF  LOSS. 

§  158.  Stipulations  of  Policy. 

159.  Construction. 

160.  Mutual  Insurance  Companies. 

161.  Statutory  Regulation. 

162.  Distinction  Between  Notice  and  Proofs. 

163.  Several  Policies  of  Same  Insurer. 

164.  No  Policy  Issued. 

165.  Total  Loss  under  Valued  Policy. 

166.  Computation   of   Time. 

167.  Conditions  Requiring  Strict  Performance. 

168.  Liberal  Construction  of  Conditions. 

169.  Excuses  for  Noncompliance. 

170.  Conditions  not  Requiring  Strict  Compliance. 

171.  Time  to  Furnish  Not  Definite. 

172.  Form  and  Contents. 

173.  Certificate  of  Magistrate,  Notary  Public,  etc. 

174.  Who  Must  Furnish. 

175.  Mortgagee. 

176.  Partnership. 

177.  Assignee. 

178.  Creditor. 

179.  To  whom  Given. 

180.  Manner   of   Service. 

181.  Proofs  as  Evidence. 

182.  Fraud,  Misrepresentation  and  False  Swearing. 

183.  Examination  of  Insured  Under  Oath. 

184.  Books  of  Account,  Invoices,  etc. 

CHAPTER  XIV. 
WAIVER  OF  NOTICE  AND  PROOFS  OF  LOSS. 

§  185.  General  Principles. 

186.  Waiver  of  Notice  not  Waiver  of  Proof. 

187.  Stipulations  of  Policy. 
188-190.  What  Agents  can  Waive. 
191-192.  Waiver  of  Delay. 
193-194.  Waiver  of  Insufficiency. 

195.  Amended  or  Additional  Proofs. 

196.  Proofs  not  Furnished  by  Proper  Person. 
197-198.  Silence  of  Insurer. 


TABLE    OF    CONTENTS. 

199-200.  Denial  of  Liability. 

201.  After  Time  to  Furnish  Proofs  has  Expired. 

202.  In  Answer. 

203.  Negotiations  for  Settlement. 

204.  Proceedings  to  Ascertain  or  Adjust  Loss. 

205.  Furnishing  or  Refusal  to  Furnish  Blanks. 

CHAPTER  XV. 

ARBITRATION  AND  AWARD. 

§  206.  Validity  of  Stipulations  for  Arbitration. 
207-210.  The  Effect  of  such  Stipulations. 

211.  When  Stipulations  for  Arbitration  Become  Operative. 

212.  Submission. 

213.  Selection  of  Arbitrators  and  Umpire. 

214.  Conducting  Appraisal. 

215.  Failure  of  Arbitrators  to  Agree. 

216.  Who  Bound  by  Award. 

217.  Validity  and  Effect  of  Award. 

218.  Setting  Aside  Award. 

219-220.  Effect  of  Demanding  or  Participating  in  an  Award. 
221-222.  Waiver  of  Right  to  Arbitration. 
223.  Denying  Liability  in  Pleading. 

CHAPTER  XVI. 

PROCEEDS  OF  POLICY. 

i  224-226.  Payment. 
227-230.  Assignment. 

231.  Right  to  Change  Beneficiary. 

232.  Rights  of  Creditors. 

CHAPTER  XVII. 

SUBROGATION. 

\  233.  Definition  and  Explanation. 
234.  Right  of  Insurer. 

CHAPTER  XVm. 
WAIVER  AND  ESTOPPEU 

§  235.  Definition. 

236.  Division. 

237.  By  Whom. 

238.  Estoppel. 


TABLE    OF   CONTENTS.  Xl 

CHAPTER  XIX 

REINSURANCE. 

§  239.  Definition  and  Nature. 

240.  Who  May  Sue. 

241.  Right  to  Reinsure, 

242.  Insurable  Interest. 

243.  Form  and  Essentials  of  Contract. 

244.  Agents'  Powers. 
245-248.  The  Contract. 

249-251.  Amalgamation  or  Consolidation  of  Companies. 

CHAPTER  XX. 

PRACTICE  AND  PROCEDURE. 


THE  LAW  OF  INSURANCE. 


CHAPTER  I. 

INTRODUCTORY. 

§  1.  The  Origin  of  Insurance. 

2.  General  Classification. 

3.  Insurance  by  Contract — Definitions, 
4-12.  ' Divisions. 

13. Basis  of  Contract. 

14. A  Personal  Contract. 

15.  Nature  of  Contract. 

16.  What  are  Insurance  Contracts. 

17.  Essentials  of  Contract. 

18.  Form  of  Contract. 

The  Origin"  of  Insurakce. 

§  1.  Insurance  law  is  generally  conceded  to  have  had  its 
origin  in  the  ancient  marine  law  and  customs  of  merchants. 

The  origin  of  insurance  is  uncertain.  By  some  it  is  as- 
serted to  have  existed  in  the  time  of  the  Koman  Empire; 
others  fix  the  date  of  its  birth  at  a  much  later  period.  It 
is  generally  conceded  that  it  is  the  product  of  the  necessities 
of  maritime  commerce  with  its  attendant  risks  and  hazards ; 
and  that  all  kinds  of  insurance  known  at  the  present  day  are 
but  the  result  of  the  development  of  the  principles  of  marine 
insurance,  adapted  to  the  expansion  and  progress  of  commerce 
and  business  enterprise  and  extended  to  cover  the  advancing 
and  everchanging  demands  of  both  public  and  individual 
necessities.  The  antiquity  and  the  public  advantage  of  the 
KERR,  INS.—  1 


2  INTKODUCTORY.  §  2 

business  was  long  ago  recognized  hj  the  parliament  of  Eng- 
land in  the  passage  of  the  Statute  43  Eliz.  c.  12,  which  recites 
the  immemorial  usage  of  policies  of  insurance  "by  means 
whereof  it  cometh  to  pass,  upon  the  loss  or  perishing  of  any 
ship,  there  foUoweth  not  the  undoing  of  any  man,  but  the 
loss  lighteth  rather  easily  upon  many  than  heavily  upon  few, 
and  rather  upon  them  that  adventure  not  than  upon  those  that 
do  adventure ;  whereby  all  merchants,  especially  those  of  the 
younger  sort,  are  allowed  to  venture  more  willingly  and  more 
freely." 

General  CLAssiFicATio}<r. 

§  2.  Generally  speaking,  insurance    is    divided  into  two 
classes,  viz. : 

(a)  Insurance  by  act  and  operation  of  law. 

(b)  Insurance  by  contract,  e.  g.: 

(1)  Oral,  or 

(2)  Written. 

Within  the  class  first  mentioned  is  embraced  that  insurance 
which  is  created  and  exists  solely  by  implication  and  operation 
of  law,  as  in  the  case  of  conmaon  carriers  and  warehousemen. 
While  goods  are  in  the  custody  of  a  railway  company  as  a  com- 
mon carrier,  it  is  subject  to  the  full  common-law  liabilities 
attaching  to  common  or  public  carriers ;  which  is  to  say  that  it 
is  liable  as  an  absolute  insurer  against  all  loss,  damage  or  in- 
jury arising  in  any  manner  other  than  from  certain  excepted 
causes.  A  railway  also  may  be  considered  as  an  insurer 
against  damage  or  loss  caused  by  fire  communicated  through 
its  engines.  It  is  also  liable  for  the  damage  or  destruction 
by  fire,  while  in  its  charge,  of  cars  which  it  has  received 
for  transportation  from  other  companies.  So  a  bailee  or 
warehouseman  is  often,  and  in  many  respects,  a  guarantor 
or  insurer  of  the  safe  keeping  of  goods  and  chattels  intrusted 
to  his  care. 


§  3  INSURANCE   BY    CONTRACT  —  DEFINITIONS.  6 

Within  the  second  class  is  embraced  that  kind  and  class 
of  insurance  which  is  created  and  exists  solely  because  of 
the  making  of  special  and  express  contracts  between  parties, 
whereby  each  does  or  agrees  to  do  some  particular  thing  or 
things  under  certain  conditions ;  for  instance  the  one  to  pay 
a  premium  or  consideration  for  the  obligation  of  the  other, 
who  in  turn  undertakes  therefor  to  give  certain  indemnity 
or  make  certain  payments  to  the  former  should  certain  things 
happen  or  certain  contingent  events  occur.  These  contracts 
may  be  either  oral  or  in  writing. 

We  are  here  concerned  only  with  insurance  of  the  second 
class  and  the  law  applicable  thereto. 

Insurance  by  Contract  — Definitions. 

g  3.  An  insurance    contract  is  an  agreement  whereby  one 
party,  for  a  consideration, 

(a)  Agrees  to  indemnify  another  party  to  a  specified 

amount  against  loss   or   damage  from  specified 
causes,  or 

(b)  Agrees  to  pay  to  another  a  certain  sum  of  money 

on   the   happening   of  a    given   contingency  or 
event. 1 

*  "Insurance,  strictly  defined,  is  a  contract  whereby  one,  for  a  con- 
sideration, agrees  to  indemnify  another  for  liability,  damage,  or  loss 
hy  certain  perils  to  which  the  subject  may  be  exposed;  but  the  con- 
tracts of  life  insurance  and  of  accident  insurance  covering  death  are 
not  strictly  contracts  of  indemnity."    Joyce,  Ins.  §  2. 

"Insurance  is  a  contract  whereby  one,  for  a  consideration,  under- 
takes to  compensate  another  if  he  shall  suffer  loss.  *  *  *  It  is 
substantially  the  definition  given  long  ago  by  Roccus,  and  is  recom- 
mended alike  by  its  brevity  and  its  comprehensiveness,— qualities 
upon  which  subsequent  writers  have  scarcely  been  able  to  improve." 
May,  Ins.  §  1. 

"A  contract  by  which  the  one  party,  in  consideration  of  a  price 
paid  to  him  adequate  to  the  risk,  becomes  security  to  the  other, 
that  he  shall  not  suffer  loss,  damage,  or  prejudice,  by  the  happening 
of  the  perils  specified  to  certain  things,  which  may  be  exposed  to 
them."     Lucena  v.  Craufurd,  2  Bos.  &  P.   (N.  R.)   300,  6  Rev.  Re- 


4  introductokt.  §§  4-t 

Same  —  Divisions. 

§  4.  There  are  seven  different  classes  of  insurance,  viz.: 

(a)  Fire  insurance; 

(b)  Life  insurance; 

(c)  Marine  insurance; 

(d)  Accident  insurance; 

(e)  Casualty  insurance; 

(f)  Guaranty  insurance; 

(g)  Real  estate  and  title  insurance. 

§  5.  These  all  partake  of  the  same  nature,  and  proceed  upon 
the  same  general  plan,  but  diflFer  in  the  application  of  their 
common  principles  to  the  varying  risks  and  conditions. 

§  6.  A  fire  insurance  contract  is  an  agreement  whereby  one, 
for  a  consideration,  agrees  to  protect  another,  in  whole  or  in 
part,  against  loss  or  damage  by  fire  to  the  property  insured 
within  the  time  specified.^ 

§  7.  Life  insurance  is  a  contract  in  which  one  party,  in  con- 
sideration of  a  gross  sum  or  of  periodical  pay- 
ments, agrees  to  pay  a  sum  certain 

(a)  Upon  the  death  of  the  life  insured,  or 

(b)  At  some  other  fixed  time  or  times.3 

ports,  685.  "A  contract  to  make  compensation  (or  pay)  on  the  hap- 
pening of  an  injury  to  life  or  property."  Cooke,  Life  Ins.  §  1.  And 
see  State  v.  Federal  Inv.  Co.,  48  Minn.  110. 

For  definition  of  "Reinsurance,"  see  post,  ch.  19;  Barnes  v.Hekla 
Fire  Ins.  Co..  56  Minn.  28. 

^Biddle  (vol.  1,  §§  1,  2)  says  that  the  general  term  "insurance" 
"is  applied  to  two  species  of  contract, —  insurance  in  respect  of  prop- 
erty, and  insurance  in  respect  of  life, —  which  are  not  analogous  in. 
their  elements,  and  which  proceed  upon  different  principles." 

Insurance  in  respect  of  property  he  defines  as  "an  agreement  by 
the  insurer,  for  a  consideration,  to  indemnify  the  insured  against 
loss,  damage,  or  prejudice  to  certain  property  that  may  be  during  a 
certain  period  sustained,  by  reason  of  specified  perils  to  which  the 
property  may  be  exposed."    Johannes  v.  Phenix  Ins.  Co.,  66  Wis.  50. 

^Com.  V.  Wetherbee,  105  Mass.  149,  160;  Rensenhouse  v.  Seeley,  72 
Mich.  603,  40  N.  W.  765. 

Insurance  in  respect  of  life,  "which  is  substantially  the  purchase 
by  the  insured  from  the  insurer  of  a  reversionary  interest  for  a 
present  sum  of  money,  may  be  defined  to  be  an  agreement  by  the  in- 
surer to  pay  to  the  insured  or  his  nominee  a  specified  sum  of  money. 


§§  8,  9  DIVISIONS.  » 

§  8.  Marine  insurance  is  a  contract  of  indemnity  against  the 
perils  of  the  sea.^* 

§  9.  An  accident  insurance  contract  is  one  whereby  one 
party,  for  a  stipulated  premium,  undertakes  to  indemnify  an- 
other against  accidents  and  death  caused  by  accidental  means.* 
As  applied  to  injuries  resulting  in  death,  it  is  but  a  contract 
of  life  insurance  limited  to  specified  risks.* 

either  on  the  death  of  a  designated  life,  or  at  the  end  of  a  certain 
period,  provided  the  death  does  not  occur  before,  in  consideration  of 
the  present  payment  of  a  fixed  amount,  or  of  an  annuity  till  the 
death  occurs  or  the  period  of  insurance  is  ended."  Biddle,  Ins.  §  4; 
Franklin  Beneficial  Ass'n  v.  Com.,  10  Pa.  St.  357. 

"The  contract  of  life  insurance,  or  of  insurance  upon  a  life  in  the 
ordinary  form,  is  a  contract  to  pay  a  certain  sum  of  money  on  the 
death  of  the  insured.  Another  form,  known  as  'endowment  insur- 
ance,' is  a  contract  to  pay  a  certain  sum  to  the  insured  if  he  lives  a 
certain  length  of  time,  or,  if  he  dies  before  that  time,  to  some  other 
person  indicated.  In  either  of  these  forms  the  contract  is,  strictly 
speaking,  an  insurance  on  the  life  of  the  party,  although  the  latter 
is  generally  denominated  'endowment'  insurance."  State  v.  Federal 
Inv.  Co.,  48  Minn.  110;  Briggs  v.  McCullough,  36  Cal.  542;  New 
York  Mut.  Life  Ins.  Co.  v.  Armstrong,  117  U.  S.  591,  Life  policy  a 
valued  one:  Bevin  v.  Connecticut  Mut.  Life  Ins.  Co.,  23  Conn.  244; 
post,  notes  9,  10. 

A  contract  by  an  association  to  pay  at  certain  fixed  times  definite 
sums  of  money  as  endowments  to  living  members,  or,  in  case  of 
their  death,  to  pay  certain  other  sums  to  their  beneficiaries,  is  life 
insurance  ^s  to  both  such  sums.  Endowment  and  Benevolent  Ass'n 
V.  State,  35  Kan.  253. 

»»  1  Duer.  Ins.  (ed.  1845),  §  1. 

"Marine  insurance  is  that  which  is  applied  to  maritime  commerce, 
and  is  made  for  the  protection  of  persons  having  an  interest  in  ships 
or  goods  on  board,  from  the  loss  or  damage  which  may  happen  to 
them  from  the  perils  of  the  sea  during  a  certain  voyage  or  a  fixed 
period  of  time."    Marshall,  Ins.  §  2. 

*Healey  v.  Mutual  Ace.  Ass'n,  133  111.  556;  Employers'  Liability 
Assur.  Corp.  v.  Merrill,  155  Mass.  404,  7  Am.  Law  Rev.  585;  Su- 
preme Council  V.  Garrigus,  104  Ind.  133;  North  American  L.  &  A. 
Ins.  Co.  V.  Burroughs,  69  Pa.  St.  43;  Southard  v.  Railway  Passen- 
ger's Assur.  Co.,  34  Conn.  574;  United  States  Mut.  Ace.  Ass'n  v, 
Barry,  131  U.  S.  100;  State  v.  Fricke  (Wis.),  77  N.  W.  734. 
'  State  V.  Federal  Inv.  Co.,  48  Minn.  110. 


Q  IN'TRODUCTOEY.  §§  10,  11 

§  10.  Casualty  insurance  is  a  species  of  accident  insurance.^ 
§  11.  Guaranty  insurance  is  a  species  of  insurance  whereby 
the  insurer  undertakes  to  indemnify  the  insured  against  loss 
or  liability  which  he  might  incur  in  business  transactions." 

•Employers'  Liability  Assur.  Corp.  v.  Merrill,  155  Mass.  404,  7 
Am.  Law  Rev.  585;  State  v.  Federal  Inv.  Co.,  48  Minn.  110. 

'This  class  of  insurance  is  very  comprehensive.  It  affords  in- 
demnity against  dishonesty  or  insolvency  of  clerks  or  employes, 
losses  in  trade,  or  by  breach  of  contract,  or  from  liability  as  master 
or  common  carrier;  guaranties  the  honesty  and  faithful  discharge 
of  duty  of  employes  and  persons  holding  positions  of  trust, —  in 
short  offers  protection  from  any  contingency  or  event  not  covered  by 
the  other  kinds  of  insurance  mentioned  herein.  People  v.  Rose,  174 
111.  310,  44  L.  R.  A.  124  (guarantying  fidelity  of  officer);  Shakman 
V.  United  States  Credit  System  Co..  92  Wis.  .366,  32  L.  R.  A.  383; 
Smith  V.  National  Credit  Ins.  Co..  65  Minn.  283,  33  L.  R.  A.  511 
(credit  insurance);  Trenton  Passenger  Ry.  Co.  v.  Guarantors'  Lia- 
bility Ind.  Co..  60  N.  J.  Law,  246,  44  L.  R.  A.  213  (indemnifying  com- 
mon carrier  against  loss  from  injuries  to  passengers) ;  State  v. 
Hogan  (1899),  8  N.  D.  301,  45  L.  R.  A.  166  (contract  guarantying 
fixed  revenue  from  lands) ;  Kansas  City  M.  &  B.  R.  Co.  v.  Southern 
News  Co.,  151  Mo.  373,  45  L.  R.  A.  380  (contract  indemnifying  a 
railway  company  against  loss  through  injuries  to  employes  of  the 
News  Company  carried  by  the  former) ;  Holmes  v.  Phenix  Ins.  Co., 
98  Fed.  240,  47  L.  R.  A.  308  (protecting  against  loss  by  windstorms, 
cyclones,  or  tornadoes) ;  "The  Law  of  Liability  Insurance,"  6  Ameri- 
can Lawyer,  247. 

"Guaranty  insurance  is,  in  its  practical  sense,  a  guaranty  or  in- 
surance against  loss  in  case  a  person  named  shall  make  a  designated 
default,  or  be  guilty  of  specified  conduct.  It  is  usually  against  the 
misconduct  or  dishonesty  of  an  employe  or  officer,  though  some- 
times against  the  breach  of  a  contract.  This  branch  of  insurance  is 
*  *  *  modern  in  origin  and  development.  *  *  *  It  may  be  con- 
fidently stated,  notwithstanding  the  comparative  absence  of  specific 
decisions,  that  the  general'  principles  applicable  to  other  classes  of 
insurance  are  applicable  here  as  well."  9  Am.  &  Eng.  Enc.  Law 
(1st  ed.),  65;  People  v.  Fidelity  &  Casualty  Co.,  153  111.  25,  26  L.  R. 
A,  295;  Embler  v.  Hartford  Steam  Boiler  I.  &  Ins.  Co.,  158  N.  Y.  431, 
44  L.  R.  A.  512  (injury  to  employes);  Rumford  Falls  Paper  Co.  v. 
Fidelity  &  Casualty  Co.,  92  Me.  574;  Underwood  Veneer  Co.  v.  Lon- 
don Guarantee  &  Ace.  Co.,  100  Wis.  378,  75  N.  W.  996;  Jaeckel  v. 
American  Credit  Ind.  Co.,  34  App.  Div.  (N.  Y.)   565,  54  N.  Y.  Supp. 


§§  12,  13  BASIS   OF   CONTRACT.  7 

§  12.  In  real  estate  and  title  insurance  the  insurer,  for  a  con- 
sideration, obligates  himself  to  guarantee  and  protect  the  title 
of  another  to  specified  real  estate  for  a  given  time.a 

Same  —  Basis  of  Contract. 

§  13.  Indemnity  and  protection  against  loss  are  the  funda- 
mentals of  an  insurance  contract. 

Insurance  is  a  means  or  system  adopted  to  afford  protec- 
tion against  the  exigencies,  dangers,  and  hazards  of  life  and 
business.  The  very  essence  of  any  definition  of  insurance 
is  indemnity  for  loss  or  pecuniary  disadvantage  in  respect 
to  a  specified  subject.  Through  fire  insurance  an  insured 
is  guaranteed  against  loss  by  fire  to  the  extent  agreed  upon, 
but  he  is  in  no  event  to  receive  more  than  compensation  for 

505  (against  loss  by  insolvency) ;  American  Surety  Co.  v.  Pauly,  170 
U.  S.  133  (surety);  Sloman  v.  Mercantile  Credit  Guarantee  Co., 
112  Mich.  258,  70  N.  W.  886  (insolvency);  George  v.  Goldsmiths  & 
G.  B.  Ins.  Ass'n,  (1898)  2  Q.  B.  136,  67  Law  J.  Q.  B.  (N.  S.)  807 
(burglary) ;  Guarantee  Co.  v.  Mechanics'  Sav.  Bank  &  T.  Co.,  80 
Fed.  766,  82  Fed.  545  (fidelity);  Finlay  v.  Mexican  Inv.  Corp.,  66 
Law  J.  Q.  B.  (N.  S.)  151  (guarantying  payment  of  bond)  ;  Talcott  v.^ 
National  Credit  Ins.  Co.,  9  App.  Div.  (N.  Y.)  433,  41  N.  Y.  Supp.  281 
(against  losses  in  business) ;  Tebbets  v.  Mercantile  Credit  Guarantee 
Co.,  73  Fed.  95  (against  bad  debts.  Laws  applicable  to  sureties  do 
not  apply  to  companies  guarantying  against  bad  debts). 

^Stensgaard  v,  St.  Paul  Real  Estate  Title  Ins.  Co.,  50  Minn.  429, 
17  L.  R.  A.  575.  "The  insurer  is  not  a  surety.  The  defendant 
*  *  *  agreed  to  'indemnify,  keep  harmless,  and  insure  *  *  * 
(the  plaintiff)  from  all  loss  or  damage  not  exceeding  *  *  *  the 
amount  of  his  mortgage  debt,  which  he  or  his  assigns  might  sustain 
by  reason  of  defects  in  the  title  to  the  mortgaged  premises,  or  by 
reason  of  liens  or  incumbrances  thereon  existing  at  the  date  of  the 
policy.'  In  a  word,  this  is  a  guaranty  that  the  mortgagee  shall  not 
suffer  any  loss  or  damage  by  reason  of  defects  in  the  title  or  liens  or 
incumbrances  existing  at  the  date  of  the  policy.  Under  this  guar- 
anty if  the  mortgaged  property,  with  a  clear  title  and  free  from  in- 
cumbrance, was  worth  the  amount  of  the  mortgage  debt,  the  mort- 
gagee could  confidently  rely  upon  the  sufficiency  of  his  security." 
Minnesota  Title  Ins.  &  T.  Co.  v.  Drexel  (C.  C.  A.),  70  Fed.  194. 


8  INTBODUCTOKY.  §  14 

an  actual  loss  sustained,  nor  to  profit  by  tte  occurrence  of  a 
fire.  A  person  may  effect  an  insurance  upon  liis  own  life, 
or  on  the  life  of  another  in  which  lie  (the  person  insuring) 
has  an  insurable  interest ;  but  no  insurance  may  be  effected 
by  any  one  on  a  life  in  which  he  has  no  pecuniary  interest,  or 
by  way  of  gaming  or  wagering.  And  so  with  all  other  forms 
of  insurance.  There  are,  as  we  shall  hereafter  see,  some 
apparent  exceptions ;  but  a  close  examination  will  show  that 
the  exceptions  are  few,  and  these  more  fanciful  than  real,'' 
''Wherever  danger  is  apprehended  or  protection  required, 
insurance  holds  out  its  fostering  hand  and  promises  indem- 
nity. This  principle  underlies  the  contract,  and  it  can  never, 
without  violence  to  its  essence  and  spirit,  be  made  by  the 
assured  a  source  of  profit,  its  sole  purpose  being  to  guaranty 
against  loss  or  damage."  ^^ 

Same  —  A  Peesoital  Contract. 

§14.  The  contract  of  fire  insurance  is  a  personal  contract, 
and  does  not  run  with  the  title  to  the  property  insured,  except 
by  virtue  of  special  stipulations  wholly  foreign  to  itself,  either 
interpolated  in  the  contract  or  added  thereto. 

Policies  are  not  insurances  of  the  specific  things  mentioned 
to  be  insured,  nor  do  they  in  case  of  fire  insurance  attach  on 

'Post,  c.  9,  "Insurable  Interest;"  post,  c.  16,  "Proceeds." 
"Wilson  V.  Hill,  3  Mete.  (Mass.)  66;  May,  Ins.  §§  2,  7;  Carpenter 
V.  Providence  Wash.  Ins.  Co.,  16  Pet.  (U.  S.)  495.  There  is  con- 
siderable doubt  as  to  whether  life  and  accident  policies  are,  strictly 
speaking,  contracts  for  indemnity  only.  Joyce,  Ins.  §§  24-27;  El- 
liott, Ins.  §  11;  Phoenix  Mut.  L.  Ins.  Co.  v.  Bailey,  13  Wall.  (U.  S.) 
616,  2  Bigelow  Cas.  765;  Dalby  v.  India  &  London  Life  Assur.  Co.,  13 
C.  B.  365,  2  Bigelow,  371;  McKenty  v.  Universal  Life  Ins.  Co.,  4 
Bigelow,  153  ;  Ferguson  v.  Massachusetts  Life  Ins.  Co.,  102  N.  7. 
647;  Mutual  Life  Ins.  Co.  v.  Allen,  138  Mass.  27;  Briggs  v.  McCul- 
lough,  36  Cal.  542;  Bevin  v.  Connecticut  Mut.  Life  Ins.  Co.,  23  Conn. 
244;  ante,  note  3. 


§  14  A  PEESONAL   CONTKACT.  9 

the  realty,  or  in  any  way  go  with  the  same  as  incident  thereto ; 
but  they  are  only  special  agreements  with  the  persons  insur- 
ing against  such  loss  or  damage  as  they  may  sustain.  Poli- 
cies are  not  in  their  nature  assignable,  nor  is  the  interest  in 
them  before  the  accruing  of  liability  ever  intended  to  be 
transferable  from  one  to  another  without  the  consent  of  the  in- 
surer. And  in  case  of  loss,  settlement  is  to  be  made  with  the 
person  insured,  or  in  case  of  his  death  with  his  legal  represen- 
tatives. No  others  can  avail  themselves  of  the  contract, 
even  though  they  may  have  an  equitable  or  legal  interest 
in  the  property  insured.  The  only  exception  to  this  rule 
exists  where  the  policy  has  been  bona  fide  and  for  a  valuable 
consideration  assig-ned  with  notice  to  the  insurer  and  his 
consent  either  express  or  implied.^^  This  rule  applies  par- 
ticularly to  the  status  and  rights  of  an  insured  prior  to  the 
happening  of  the  exigency  insured  against  and  the  creation 
of  a  valid  and  enforceable  claim  against  the  insurer,  (i.  e. 
when  a  speculative  or  possible  right  to  indemnity  has  grown 
into  a  debt  or  claim.)  When  this  has  come  about,  all  rights 
and  claims  of  an  insured  against  his  insurer  are,  at  least  in 
states  where  choses  in  action  are  assignable,  transferable  at 
the  will  af  the  insured.  Special  conditions  in  a  policy  pro- 
hibiting assignment  of  claims  under  it  unless  in  writing  in- 
dorsed thereon,  and  with  the  knowledge  and  consent  of  the 
insurer,  are  intended  for  the  benefit  of  the  latter  alone.  ^^ 

An  apparent  exception  to  the  rule  here  laid  down  is  found 
where  the  insurance  has  been  taken  out  pursuant  to  an  ex- 

"Lindley  v.  Orr,  83  111.  App.  70;  Simeral  v.  Dubuque  Mut.  Fire 
Ins.  Co.,  18  Iowa,  319;  Carpenter  v.  Providence  Wash.  Ins.  Co.,  16 
Pet.  (U.  S.)  495;  Carroll  v.  Boston  Marine  Ins,  Co.,  8  Mass.  515; 
Cummings  v.  Cheshire  County  M.  F.  Ins.  Co.,  55  N.  H.  457;  Carlson 
V.  Presbyterian  Board,  67  Minn.  436. 

"Post,  c.  16. 


10  INTRODUCTORY.  §  15 

press  agreement  looldDg  toward  the  protection  of  the  realty ; 
as  for  instance  under  a  covenant  by  a  mortgagor  with  a 
mortgagee  to  effect  insurance  and  in  case  of  loss  apply  the 
proceeds  to  the  repair  of  the  property  ;^^  or  where  the  law 
imposes  upon  the  insured  the  duty  of  protecting  the  property 
for  the  benefit  of  another,  as  in  case  of  a  life  tenant  and 
a  remainderman.^^  But,  as  will  be  hereafter  seen,  these 
cases  do  not  infringe  upon  the  principles  stated  above.  On 
the  contrary,  those  principles  are  recognized  as  the  basis 
upon  which  equity  compels  the  application  of  the  monies  to 
proper  purposes. 

Same  —  Nature  of  Contract. 

§  15.  The  contract  is 

(a)  Conditional; 

(b)  Aleatory; 

(c)  Executory. 

A  contract  of  insurance  is  conditional  in  that,  even  though 
the  terms  be  agreed  upon  or  a  policy  written,  it  may  not 
become  effective,  as  where  the  subject  matter  has  ceased  to 
exist  before  the  contract  is  completed ;  ^^  or  the  risk  may  never 
attach,  as  in  the  case  of  marine  insurance  where  the  con- 
templated voyage  is  never  undertaken ;  ^^  or  the  contract  may 
depend  upon  the  performance  by  the  insured  of  conditions 
precedent  as  the  prepayment  of  the  first  premium,  or  his 
performance  of  conditions  subsequent  as  the  prompt  payment 

"Chipman  v.  Carroll,  53  Kan.  163,  25  L.  R.  A.  305;  Ames  v.  Rich- 
ardson, 29  Minn.  330;  Wheeler  v.  Factors  &  Traders'  Ins.  Co.,  101 
U.  S.  439. 

"Sampson  v.  Bagley  (R.  I.),  44  L.  R.  A.  711.  Compare  Harrison 
V.  Pepper,  166  Mass.  288,  33  L.  R.  A.  239. 

"Post,  c.  IV,  notes  83,  84. 

"Elliott,  Ins.  §  12;  Arnould,  Ins.  p.  10. 


§  16  WHAT    AKE    INSURANCE    CONTRACTS.  11 

of  subsequent  annual  premiums ;  ^'^  or  upon  the  property  in- 
sured remaining  in  certain  premises,  or  under  certain  con- 
ditions, or  the  life  insured  continuing  to  reside  in  certain 
territory,  or  the  loss,  death,  or  accident  happening  or  being 
caused  by  the  perils  and  hazards  insured  against. ^^ 

The  contract  is  "aleatory"  (from  alea,  a  die),  i.  e.  depend- 
ent upon  chance  and  uncertainty.  Each  party  assumes  a  cer- 
tain risk.  If  no  loss  happens  and  the  contingency  insured 
against  does  not  occur,  the  insured  loses  and  the  insurer  gains 
the  amount  of  the  premium ;  if  a  loss  occurs  and  the  contin- 
gency insured  against  happens,  the  insurer  loses  and  the  in- 
sured gains  an  amount  much  larger  than  the  premium.  ^^ 

The  contract  is  executory  as  to  the  insurer  while  it  is 
obligated  to  fulfill  its  agreement  upon  the  happening  of  the 
loss  or  event  insured  against ;  it  is  executed  by  the  insured  in 
so  far  as  he  has  paid  his  premiums  and  performed  the  duties 
imposed  upon  him  by  the  contract.^^ 

What  are  Insurance  Contracts. 

§  16.  All  agreements  whereby  one  undertakes  to  make  com- 
pensation to  another  if  he  shall  suffer  loss  of,  or  injury  to,  life 
or  property,  and  which  contain  the  essentials  hereinafter  men- 
tioned, are  contracts  of  insurance. 21 

Necessarily  in  defining  insurance,  or  in  attempting  to 
state  what  agreements  are  properly  classed  as  insurance  con- 
tracts, in  a  single  sentence,  only  the  most  general  terms  can 

"Post,  c.  10,  "Premiums;"  New  York  Life  Ins.  Co.  v.  Statham, 
93  U.  S.  24. 

"Post,  c.  12. 

"Emerigon,  Tns.  c.  1,  §  3;  Defrenois,  Assurance  sur  la  Vie,  c.  3, 
§  79;  May,  Ins.  §  5;  Joyce,  Ins.  §  20. 

""New  York  Life  Ins.  Co.  v.  Statham,  93  U.  S.  24;  Cohen  v.  New- 
York  Mut.  Life  Ins.  Co..  50  N.  Y.  619. 

=^  Cases  supra.  And  ses  State  v.  Fricke,  102  Wis.  117,  77  N.  W. 
734.    As  to  what  are  "insurance  companies"  within  the  meaning  of 


12  INTEODUCTORY.  §  16 

be  used;  and  any  general  definition  or  statement  must  "be 
extended  to  cover  tlie  ever  changing  phases  in  which  the 
subject  is  presented  to  the  public.  Originally  applied  and 
used  only  to  furnish  protection  and  indemnity  against  loss 
of  life  and  the  perils  and  hazards  of  the  sea,  the  system  of 
insurance  has  gro^vn  until  it  now  invades  almost  every  de- 
partment of  business,  commercial,  and  even  private,  life  and 
enterprise.  Its  application  and  usage  in  the  seven  classes 
already  mentioned  are  so  well  known  and  thoroughly  under- 
stood as  to  need  no  elaboration.  The  question  remains 
whether  agreements  which  lack  none  of  the  imperative  es- 
sentials of  insurance  contracts  hereinafter  mentioned  are 
of  such  a  scope  and  nature  as  to  be  termed  insurance  contracts, 
and  come  within  the  purview  of  the  laws  governing  the  same. 
A  contract  by  which  one  party  for  a  consideration  agrees 
to  pay  the  other  a  sum  of  money  upon  the  destruction  or  in- 
jury of  something  in  which  the  latter  has  an  insurable  in- 
terest, is  a  contract  of  insurance,  no  matter  what  the  terms 
or  mode  of  payment  of  the  consideration  may  be,  or  the  mode 
of  ascertaining  or  securing  the  payment  of  the  amount  prom- 
ised in  case  of  loss  ;^^  and  an  agreement  to  guarantee  a  fixed 
revenue  per  acre  from  farming  lands,  whereby  the  guarantor 
contracts  for  a  specified  consideration  to  pay  such  fixed 
amount  per  acre  for  the  crop  gro^vn  upon  such  lands  irrespec- 
tive of  the  crop  value  ;^'^  and  a  contract  whereby  a  benefit  is 
to  accrue  upon  the  death  or  physical  disability  of  a  person, 
which  benefit  is  conditioned  upon  the  collection  of  an  assess- 

statutes,  see  Penn  Mut.  Life  Ins.  Co.  v.  Mechanics'  Sav.  Bank  & 
Trust  Co.,  37  U.  S.  App.  692,  43  U.  S.  App.  75,  38  L.  R.  A.  33. 

="  State  V.  Vigilant  Ins.  Co.,  30  Kan.  585;  State  v.  Farmers'  &  M. 
Mut.  Ben.  Ass'n,  18  Neb.  276;  Endowment  &  Ben.  Ass'n  v.  State,  35 
Kan.  253;  Golden  Rule  v.  People,  118  111.  492. 

"  State  V.  Hogan,  8  N.  D.  301,  78  N.  W.  1051,  45  L.  R.  A.  166. 


§  16  WHAT    ARE    INSURANCE    CONTRACTS.  13 

ment  upon  persons  holding  similar  contracts;^*  and  a  con- 
tract under  which  a  person  receives  at  once  a  specified  amount 
to  be  repaid  in  fixed  monthly  instalments  unless  death  inter- 
venes before  full  payment  is  made,  in  which  event  the  debt  is 
discharged ;  ^^  and  a  contract  to  make  good  any  loss  by  burg- 
lary up  to  a  certain  date  in  consideration  of  monthly  pay- 
ments ;^^  and  a  bond  by  a  guarantee  company  securing  a  bank 
against  pecunia;ry  loss  on  account  of  the  fraudulent  acts  of 
a  cashier  or  teller ;  ^^  and  a  guarantee  of  the  fidelity  of  officers 
and  the  performance  of  contracts  ;^^  and  a  contract  to  in- 
demnify a  merchant  against  loss  from  the  insolvency  of 
customers ;  ^®  and  a  guarantee  against  business  losses  and  un- 
collectible debts  ;^°  and  a  guarantee  against  misconduct  or  dis- 
honesty of  an  employee  or  officer,  or  against  breach  of  con- 
tract ;^^  and  a  contract  to  indemnify  a  common  carrier  of 
passengers  against  losses  occurring  from  injuries  to  passengers 
carried  by  it;^^  and  an  undertaking  for  a  consideration  to 
purchase  at  a  fixed  price  the  accounts  which  during  one  year 
a  certain  business  firm  should  have  against  ascertained  in- 
solvent debtors,  or  judgment  debtors  against  whom  execu- 

"*  Lubrano  v.  Imperial  Council  0.  U.  F.,  20  R.  I.  27,  38  L.  R.  A.  546. 

''  United  Security  Life  Ins.  &  Trust  Co.  v.  Ritchey,  187  Pa.  St.  173. 
Compare  Missouri,  K.  &  T.  Trust  Co.  v.  McLachlan,  59  Minn.  468; 
post,  note  37. 

=="  Wood  V.  Grose,  Rap.  Jud.  Que.  5  B.  R.  116. 

"  Mechanics'  Sav.  Bank  &  Trust  Co.  v.  Guarantee  Co.,  68  Fed.  459. 

^'  People  V.  Rose,  174  111.  310,  44  L.  R.  A.  124. 

"  Shakman  v.  United  States  Credit  System  Co.,  92  Wis.  366,  32  L. 
R.  A.  383;  Robertson  v.  United  States  Credit  System  Co.,  57  N.  J. 
Law,  12. 

""Tebbets  v.  Mercantile  Credit  Guarantee  Co.  (C.  C.  A.),  73  Fed. 
95. 

^*  Ante,  note  7. 

'^  Trenton  Passenger  Ry.  Co.  v.  Guarantors'  Liability  Ind,  Co.,  60 
N.  J.  Law.  246.  44  L.  R.  A.  213. 


14  INTRODUCTORY.  §  16 

tions  should  "be  returned  unsatisfied;^^  and  a  promise  of  in- 
demnity against  wind  storms,  cyclones  or  tornadoes  ;^^  and 
a  storage  receipt  under  ■which  the  warehouseman  for  a  con- 
sideration undertakes  to  indemnify  the  bailor  against  loss 
by  fire.^^* 

Contra:  Eut  a  rule  of  a  benevolent  association  that  every 
member  in  good  standing  shall  be  entitled  to  a  certain  sum 
per  week  during  his  sickness  does  not  constitute  an  insurance 
contract  between  the  society  and  its  members.^^  Nor  is  a 
contract  between  a  railroad  company  and  its  employees  by 
which  the  latter  permit  the  company  to  create  a  fund  out  of 
their  wages  and  its  own  contributions,  from  which  fund 
sick  and  injured  employees  are  pro\ided  with  relief,  a  con- 
tract of  insurance  under  the  New  Jersey  insurance  law,  even 
though  the  company  undertakes  to  manage  the  fund  and 
furnish  the  agreed  relief .^^  A  contract  between  a  corporation 
and  its  members  whereby  each  member  pays  an  admission  fee 
and  monthly  dues,  part  of  which  goes  into  a  reserve  fund  and 
part  into  a  maturity  fund,  from  which  latter  fund  when  it 
contains  a  certain  sum,  a  fixed  amount  is  paid  to  the  oldest 
member  in  good  standing,  is  not  an  insurance  contract,  since 
though  the  payments  are  contingent  they  are  in  no  respect 
made  as  indemnity  against  loss  of  any  kind  nor  are  they 
dependent  upon  the  duration  of  human  life,  or  the  happening 
of  any  casualty  to  the  member,  or  any  loss  or  damage  what- 
ever.^"^  A  written  agreement  between  a  firm  of  insurance 
brokers  and  certain  property  owners,  whereby  the  brokers 

'^Claflin  V.  United  States  Credit  System  Co.,  165  Mass.  501,  43 
N.  E.  293. 

"  Holmes  v.  Phenix  Ins.  Co.  (C.  C.  A.),  98  Fed.  240,  47  L.  R.  A.  308. 

»"  Olson  V.  Brady,  76  Minn.  8. 

**  Irish  Catholic  Ben.  Ass'n  v.  O'Shaughnessey,  76  Ind.  191. 

«»Beck  V.  Pennsylvania  R.  Co.  (N.  J.),  43  Atl.  908. 

"  State  V.  Federal  Inv.  Co.,  48  Minn.  110.    See  ante,  note  25. 


§  17  -  ESSENTIALS   OF    CONTRACT.  15 

are  authorized  and  agree,  as  agents  of  the  o-^vners,  to' obtain 
and  pay  the  premiums  for  all  fire  insurance  required  by  the 
latter  for  a  given  time  at  a  specified  rate,  and  containing 
provisions  concerning  (1)  the  property,  and  (2)  the  compa- 
nies in  which  insurance  shall  be  carried,  and  (3)  as  to  the  in- 
crease of  hazards,  but  also  stipulating  that  the  brokers  shall 
not  be  thereby  constituted  insurers  or  underwriters,  is  not  a 
contract  of  insurance.  ^^  ^ 

From  what  has  already  been  said  and  an  examination  of 
the  cases  cited  it  will  appear  there  are  certain  essential  ele- 
ments present  in  every  agreement  which  comes  within  the 
class  of  agreements  known  as  contracts  of  insurance. 

Essentials  of  Contkact. 

§  17.  Any  valid  contract  of  insurance  must  describe  — 

(a)  Two  parties  — the  insurer  and  the  insured; 

(b)  A  subject-matter; 

(o)  A  risk  or  contingency  insured  against; 

(d)  The  duration  of  the  insurer's  liability; 

(e)  The  consideration  or  premium; 

(f )  The  amount  of  the  indemnity  or  the  extent  of  the 

insurer's  liability. 

To  render  a  contract  of  insurance  or  a  contract  to  insure 
binding  and  effectual  there  must  be  a  subject  matter  to  which 
the  policy  or  the  agreement  is  to  attach ;  a  risk  or  contingency 
insured  "against;  two  parties,  the  insurer  and  the  insured ;  the 
amount  of  the  indemnity  and  the  duration  of  the  risk  must 
be  definitely  fixed ;  and  the  premium  or  consideration  must 
be  agreed  upon  or  paid  or  exist  as  an  enforceable  claim  against 
the  insured.  Upon  these  particulars  there  must  be  an  agree- 
ment before  a  contract  of  insurance  is  formed ;  anything  less 
would  be  insufficient  and  unenforceable  after  a  loss.^^ 

««Tanenbaum  v.  Rosenthal,   44  App.  Div.    (N.  Y.)    431,   60  N.  Y. 
Supp.  1092. 
»» Mattoon  Mfg.  Co.  v.  Oshkosh  Mut.  Fire  Ins.  Co.,  69  Wis.  564,  35 


16  introductokt.  §  18 

Form  of  Contkact. 

§  18.  The  contract  may  be 

(a)  Oral,  or 

(b)  Written,  or 

(c)  Partly  oral  and  partly  in  writing.*" 

N.  "W.  12;  Strohn  v.  Hartford  Fire  Ins.  Co.,  37  Wis.  625;  Tyler  v. 
New  Amsterdam  Fire  Ins.  Co.,  4  Rob.  (N.  Y.)  157;  Cleveland  Oil  & 
Paint  Mfg.  Co.  v.  Nor-spich  Union  Fire  Ins.  Co.,  34  Oreg.  228,  55  Pac. 
i35;  Milwaukee  Mechanics'  Ins.  Co.  v.  Graham,  181  111.  158;  Mutual 
Life  Ins.  Co.  v.  Young,  23  Wall.  (U.  S.)  85-108;  Piedmont  &  A.  Life 
Ins.  Co.  V.  Ewing,  92  U.  S.  377-382;  Newark  Machine  Co.  v.  Kenton 
Ins.  Co.,  50  Ohio  St.  549,  22  L.  R.  A.  768;  Winchell  v.  Iowa  State  Ins. 
Co.,  103  Iowa,  189,  72  N.  W.  503;  post,  c.  Ill;  Insurance  Co,  of 
North  America  v.  Bird.  175  111.  42,  51  N.  E.  686. 
«  Post,  ch.  III. 


CHAPTER  II. 

THE  PARTIES  TO  THE  CONTRACT. 

§  19.  Two  Parties  Necessary. 
20.  Who  may  be  Insured. 
21-23.  Who  may  Insure. 

24.  Failure  to  Comply  with  Statute. 

25.  Vested  Rights. 

26.  Retaliatory  Statutes. 

27-28. Corporate  Powers— Ultra  Vires  Contracts. 

Two  Parties  Necessary. 

§  19.  The  consent  of  at  least  two  parties,  each  of  whom  is  in 
law  capable  of  contracting  in  the  premises,  is  essential  to  the 
making  of  a  contract  of  insurance.  These  parties  are  called 
the  insured  and  the  insurer. 

From  the  very  nature  of  things  there  are  at  least  two 
parties  necessary  to  the  making  of  any  contract  of  insurance. 
A  man  cannot  enter  into  any  contract  with  himself.  He 
cannot  be  both  obligor  and  obligee.  Nor  can  a  man  as  agent 
of  an  insurance  company  contract  with  himself  as  an  indi- 
vidual, unless  the  contract  be  approved  by  his  principal  with 
full  knowledge  of  all  the  facts.  And  a  contract  made  by 
one  as  agent  of  an  insurer,  with  himself  as  agent  of  a  property 
owner,  for  the  insurance  of  the  buildings  of  the  latter  by  the 
former,  is  not  binding  on  either  principal  unless  ratified  by 
both.  A  contrivance  which  reduces  the  two  parties  to  one, 
and  admits  an  agent  representing  antagonistic  interests  to 
make  a  bargain  by  himself  is  so  far  against  the  policy  of  the 
law  that  the  contract  is  held  to  be  void,  unless  the  principals 
choose  afterwards,  and  with  knowledge  of  all  the  circum- 
KERR,  INS.— 2 


18  THE    PARTIES    TO   THE    CONTRACT.  §  20 

stances  that  affect  their  possessions  and  rights,  to  ratify  the 
act  of  the  agent.  ^ 

The  party  promising  and  undertaking  to  furnish  the  in- 
demnity, or  to  make  payment  upon  the  happening  of  the  con- 
tingency, is  called  the  insurer ;  the  other  party — the  promisee 
— is  termed  the  "insured"  or  the  "assured."  For  all  prac- 
tical purposes  these  terms  may  be  considered  as  being  synony- 
mous. "There  are  undoubtedly  instances  where  this  distinc- 
tion between  the  terms  'assured'  and  'insured'  is  observed, 
though  we  do  not  find  any  judicial  consideration  of  it.  The 
application  of  either  term  to  the  party  for  whose  benefit  the 
insurance  is  effected,  or  to  the  party  whose  life  is  insured, 
has  generally  depended  upon  its  collocation  and  context  in  the 

policy."^ 

Who  Mat  be  Insured. 

§  20.  Any  person,  or  association  of  persons,  or  any  corpora- 
tion capable  of  contracting  generally,  may  become  a  party  to 
a  contract  of  insurance. 

"Any  one  sui  juris  and  under  no  legal  disability  to  con- 
tract in  general  may  be  insured."     The  same  is  true  of  any 
copartnership,  or  corporation  public  or  private  which  has  an 
insurable  interest  in  the  subject  matter  of  the  insurance.^ 
Infants. 

Life  insurance  in  a  solvent  company  at  ordinary  and  rea- 
sonable rates  for  an  amount  reasonably  commensurate  with  an 

^  Post,  c.  VIII,  "Agents." 

*  Connecticut  Mut.  Life  Ins.  Co,  v.  Luchs,  108  U.  S.  498,  2  Sup.  Ct. 
951.  See,  also,  Sanford  v.  Mechanics'  Mut.  Fire  Ins.  Co.,  12  Cush. 
(Mass.)  541;  Cyrenius  v.  Mut.  Life  Ins.  Co.,  73  Hun  (N  Y.),  365, 
145  N.  Y,  576;  Carrington  v.  Commercial  F.  &  M.  Ins.  Co.,  1  Bosw. 
(N.  Y.)  152.  One  whose  life  is  insured  by  another  is  not  a  party  to 
the  contract.  North  American  Life  Ins.  Co.  v.  Wilson,  111  Mass. 
542;  Lockwood  v.  Bishop,  51  How.  Pr.  (N,  Y.)  221. 

•Biddle,  Ins.  §  14;  Holbrook  v.  St,  Paul  F.  &  M.  Ins.  Co.,  25  Minn. 
229;  People  v.  Liverpool,  L.  &  G.  Ins.  Co.,  2  Thomp.  &  C.  (N.  Y.)  268. 


§  20  WHO    MAY    BE    INSURED. 


19 


infant's  estate  or  his  financial  ability  to  carry  it  is  a  provident, 
fair,  and  reasonable  contract,  and  one  whicb  it  is  entirely 
proper  for  an  insurance  company  to  make  witb  him,  as- 
suming that  it  practices  no  fraud  or  other  unlawful  means  to 
procure  it*     But  it  has  been  held  that  an  infant  who  had 
insured  his  stock  of  goods  was  not  liable  to  the  company  upon 
his  premium  note,  as  for  necessaries,  when  the  plea  of  infancy 
was  made  and  proved;  that  the  contract  was  manifestly  for 
the  benefit  of  the  infant  and  therefore  not  void  but  only  void- 
able at  his  election.^    It  is  submitted  that  the  first  rule  is  the 
better  and  more  in  accordance  with  the  spirit  and  trend  of 
modern  judicial  opinion.     A  rule  of  an  insurance  company 
not  to  insure  the  property  of  minors  will  not  invalidate  a 
policy  issued  to  a  minor,  when  the  one  procuring  it  has  no 
notice  of  such  rule.®     In  New  York  it  has  been  held  that  an 
assessment  and  co-operative  life  insurance  company  organ- 
ized under  the  laws  of  that  state  cannot  receive  infants  into 
its  membership,  because  the  powers  conferred  upon  members 
cannot  be  exercised  by  children  of  tender  years,  and  upon  the 
'further  grounds  that  the  plan  of  operation  implies  the  volun- 
tary association  of  persons  capable  of  participating  in  the 
administration  of  corporate  affairs,  and  that  from  a  con- 
sideration of  the  statute  and  the  nature  and  object  of  such 
organizations  as  well  as  tlie  relation  which  members  hold  to 
the  corporation,  it  is  apparent  that  adult  persons  only  were 
contemplated  as  entitled  to  membership.'^     But  in  Illinois 
the  holding  is  that  the  contract  between  a  member  and  such 

*  Johnson  v.  Northwestern  Mut.  Life  Ins.  Co.,  56  Minn.  365. 
"Monaghan  v.  Agricultural  Fire  Ins.  Co.,  53  Mich.  238,  18  N.  W. 

799;  New  Hampshire  Mut.  Fire  Ins.  Co.  v.  Noyes,  32  N.  H.  345. 

•  Johnson  v.  Scottish  Union  &  Nat.  Ins.  Co.,  93  Wis.  223,  67  N.  W. 
416. 

'  Re  Globe  Mut.  Ben.  Ass'n,  135  N.  Y.  280,  17  L.  R.  A,  547. 


20  THE   PARTIES   TO   THE    CONTRACT.  §§  21-23 

an  association  is  unilateral  and  does  not  bind  the  former  to 
the  payment  of  any  money  or  the  performance  of  any  con- 
dition; and  hence  that  minors  are  not,  merely  because  of 
their  minority,  disqualified  from  becoming  members  of  mu- 
tual benefit  societies  in  the  absence  of  any  specific  statute  on 
the  subject;  and  their  admission  is  not  a  violation  of  the 
policy  of  the  law.^ 

Aliens. 

An  alien,  who  is  not  an  alien  enemy,  has  generally  the  same 
right  and  power  to  contract  for  insurance  that  a  subject  has. 
The  subjects  of  two  hostile  states  or  countries  cannot  make  a 
valid  contract  of  insurance  during  the  continuation  of  tlio 
war.^ 

Who  Mat  Insure. 

§21.  Except  when  prohibited  by  statute,  individuals  may- 
act  as  insurers. 

§  22.  There  is  no  doubt  as  to  the  power  of  each  state  to  say 
what  corporations  can  do  an  insurance  business  within  its  ter- 
ritory and  on  what  terms.        ^ 

§  23.  The  validity  of  statutes  prohibiting  individuals  from 
assuming  insurance  risks  is  doubtful. 

=  Chicago  Mut.  Life  Ind.  Ass'n  v.  Hunt,  127  111.  257.  2  L.  R.  A.  549. 

» Scholefield  v.  Eichelberger,  7  Pet.  (U.  S.)  586;  Masterson  v.  How- 
ard, 18  Wall.  (U.  S.)  99;  Hepburn  v.  Dunlop,  1  Wheat.  (U.  S.)  179; 
Cross  V.  De  Valle,  1  Wall.  (U,  S.)  1-16;  Griswold  v.  Waddington,  16 
Johns.  (N.  Y.)  438--451.  As  to  effect  of  war  in  suspending  contracts 
between  citizens  of  hostile  states,  see  Brandon  v.  Curling,  4  East, 
410;  Ex  parte  Boussmaker,  13  Ves.  Jr.  71;  Griswold  v.  Waddington, 
16  Johns.  (N.  Y.)  438-451.  For  effect  of  Civil  War,  see  Kershaw  v. 
Kelsey,  100  Mass.  561;  New  York  Life  Ins.  Co.  v.  Clopton,  7  Bush 
(Ky.),  179;  Hamilton  v.  Mut.  Life  Ins.  Co.,  9  Blatchf.  234,  Fed.  Cas. 
No.  5.986.  War  as  excuse  for  nonpayment  of  premiums:  New  York 
Life  Ins.  Co.  v.  Statham,  93  U.  S.  24;  Wheeler  v.  Connecticut  Mut. 
Life  Ins.  Co.,  82  N.  Y.  543;  Hillyard  v.  Mutual  Ben.  Life  Ins.  Co.,  3S 
N.  J.  Law,  415;  Dillard  v.  Manhattan  Life  Ins.  Co.,  44  Ga.  119. 


§  23  WHO   MAY    INSUKE.  21 

General  Rule. 

The  business  of  insuring  and  the  issuing  of  contracts  of 
insurance  are  principally  carried  on  by  corporations;  but  it 
is  clear  that,  in  the  absence  of  any  statutory  restriction,  they 
may  be  carried  on  by  individuals.  The  business  has  been 
so  generally  monopolized  by  corporations  that  the  right  of 
unincorporated  associations  or  individuals  to  insure  has  been 
but  little  questioned.  In  England  a  large  share  of  under- 
writing was  formerly  carried  on  by  a  society  of  capitalists 
called  "Lloyds" — each  member  subscribing  his  name  to  what 
policies  he  chose  and  setting  opposite  his  name  the  amount 
of  the  risk  he  was  willing  to  assume,  and  the  premium  being 
divided  amongst  the  several  subscribers  in  proportion  to  the 
amount  of  the  liability  assumed  by  each.  This  practice  has 
never  been  much  in  vogue  in  America  where  the  business  is 
almost  exclusively  confined  to  stock  companies  and  mutual 
companies  and  associations. 

Statutory  Control  and  Regulation. 

It  is  probable  that,  at  the  date  of  this  writing,  every  state 
in  the  Union  has  passed  laws  upon  this  subject,  until  it  may 
be  said  that  the  right  of  state  regulation  of  the  business  of  in- 
surance is  universally  recognized  and  upheld.  Of  the  claim 
that  it  was  a  matter  of  interstate  commerce  the  supreme  court 
said:  "Issuing  a  policy  of  insurance  is  not  a  transaction 
of  commerce.  The  policies  are  simply  contracts  of  indemnity. 
These  contracts  are  not  articles  of  commerce  in  any  proper 
meaning  of  the  word.  They  are  not  subjects  of  trade  and 
barter,  offered  in  the  market  as  something  having  an  existence 
and  value  independent  of  the  parties  to  them.  They  are 
not  commodities  to  be  shipped  or  forwarded  from  one  state 
to  another,  and  then  put  up  for  sale.  They  are  like  other 
■personal  contracts  between  parties,  which  are  completed  by 


22  THE   PARTIES   TO   THE    CONTRACT.  §  23 

their  signature  and  the  transfer  of  the  consideration.  Such 
contracts  are  not  interstate  transactions,  though  the  parties 
may  he  domiciled  in  different  states.  The  policies  do  not 
take  effect — are  not  executed  contracts — until  they  are  de- 
livered. They  are  then  local  transactions  and  are  governed 
hy  the  local  law."^® 

Each  state  has  the  power  to  regulate  and  control  the  con- 
duct of  the  insurance  business  within  its  own  territory.  It  can 
say  who  can  and  who  cannot  engage  in  the  business;  and 
under  what  circumstances  and  conditions  and  restrictions  it 
can  he  carried  on  hy  those  who  do  engage  in  it.  A  grant  of 
corporate  existence  is  a  grant  of  special  privileges  enabling 
the  corporators  to  act  for  certain  designated  purposes  as  a 
single  individual.  Corporations  are  mere  creatures  of  the' 
statute,  and  the  same,  power  which  authorizes  their  being 
and  existence  can  properly  say  what  franchises  shall  be  avail- 
able to  them  and  on  what  terms  and  under  what  conditions 
and  restrictions.  Each  state  is  clearly  the  master  of  its 
domestic  corporations.  And  a  corporation  which  is  the  mere 
creation  of  local  law  can  have  no  legal  existence  beyond  the 
limits  of  the  local  sovereignty  where  created.  The  recogni- 
tion of  its  existence  even  by  other  states,  and  the  enforcement 
of  its  contracts  made  therein,  depends  purely  upon  the  comity 
of  those  states — a  comity  which  is  never  extended  where  the 
existence  of  the  corporation  or  the  exercise  of  its  powers  are 
prejudicial  to  their  interests  or  repugnant  to  their  policy.  Hav- 
ing then  no  absolute  right  to  recognition  in  other  states,  it  fol- 
lows that  recognition  may  be  granted  a  foreign  corporation 
by  other  states  upon  sucli  terms  and  conditions  as  they  may 
think  proper  to  impose. 

A  corporation  is  not  a  citizen  of  the  United  States  within 

"Paul  V.  Virginia.  8  Wall.  (U.  S.)  168. 


§  23  WHO   MAY    INSURE.  23 

the  meaning  of  the  constitution.  Each  state  has  the  power 
to  exclude  foreign  corporations  from  her  territory;  and  the 
power,  if  she  allows  them  to  enter  her  territory,  to  determine 
the  conditions  on  which  the  entry  shall  be  made ;  and  there- 
fore the  power  and  right  to  enforce  any  conditions  imposed 
by  her  laws  as  preliminary  to  the  transaction  of  business 
within  her  confines  by  a  foreign  corporation,  whether  the 
business  be  carried  on  through  ofiicers  or  through  ordinary 
agents ;  and  she  has  the  further  power  to  prohibit  her  citizens 
from  engaging  in  business  with  or  contracting  with  a  foreign 
corporation  which  has  not  complied  with  her  laws ;  and  in  fur- 
therance of  these  powers  each  state  may  enact  and  enforce 
all  legislation  in  regard  to  things  done  within  her  territory 
which  may  be  requisite  to  the  efficacy  and  enforcement  of  such 
powers,  subject  always  of  course  to  the  paramount  authority 
of  the  constitutions  of  the  state  and  the  United  States.  ^^ 

"  State  V.  Phipps,  50  Kan.  609,  18  L.  R.  A.  657;  Noble  v.  Mitchell, 
100  Ala.  519,  25  L.  R.  A,  238;  Orient  Ins.  Co.  v.  Daggs,  172  U.  S. 
557,  19  Sup.  Ct.  281;  Schoolcraft's  Adm'r  v.  Louisville  &  N.  R.  Co., 
92  Ky.  233,  14  L.  R.  A.  579;  State  v.  Stone,  25  L.  R.  A.  243,  118  Mo. 
388;  Com.  v.  Reinoehl.  163  Pa.  St.  287,  25  L.  R.  A.  247;  State  v. 
Board  of  Ins.  Comm'rs,  33  L.  R.  A.  288,  37  Fla.  564;  Union  Cent.  Life 
Ins.  Co.  V.  Pollard,  94  Va.  146,  36  L.  R.  A.  271;  State  v.  Lancashire 
Fire  Ins.  Co.,  66  Ark.  466,  45  L.  R.  A.  348;  Aetna  Ins.  Co.  v.  Com. 
(Ky.),  45  L.  R.  A.  355;  State  v.  Fireman's  Fund  Ins.  Co.,  152  Mo.  1, 

45  L.  R.  A.  363.  As  to  particular  restrictions  on  foreign  corpora- 
tions, see  State  v.  Ackerman,  51  Ohio  St.  163,  24  L.  R.  A.  298,  and 
notes  thereto.  People  v.  Fidelity  &  Casualty  Co.,  153  111.  25,  26  L. 
R.  A.  295;  Hooper  v.  California,  155  U.  S.  648;  see  also,  Daggs  v. 
Orient  Ins.  Co.  (Mo.),  6  Ins.  Law  J.  (N.  S.)  67;  Orient  Ins.  Co.  v. 
Daggs,  172  U.  S.  557,  19  Sup.  Ct.  281;  Parker  v.  Lamb,  99  Iowa,  265, 
68  N.  W.  686,  34  L.  R.  A.  704;  Hoadley  v.  Purifoy,  107  Ala.  276,  30 
L.  R.  A.  351;  People  v.  Van  Cleave,  183  111.  330,  47  L.  R.  A.  795; 
State  V.  Moore,  56  Neb.  82,  76  N.  W.  474;  Liverpool  &  L.  &  G.  In?. 
Co.  V.  Clunie,  88  Fed.  160;  Jones  v.  German  Ins.  Co.,  110  Iowa,  75, 

46  L.  R.  A.  860;  Waters-Pierce  Oil  Co.  v.  Texas,  177  U.  S.  28,  20  Sup. 
Ct.   518;    State  v.   Johnson,   43   Minn.   350,   post,   note   41.      As   to 


24  THE   PARTIES   TO   THE   CONTRACT.  §  23 

And  courts  cannot  release  foreign  insurance  companies 
from  compliance  with  the  conditions  imposed  by  a  state  in 
granting  them  the  right  to  do  business  within  its  borders,  upon 
the  ground  that  such  conditions  are  onerous,  discriminatory 
or  inexpedient.^^  Thus  it  is  within  the  power  of  a  state  to 
make  a  third  person  who  shall  in  any  manner,  aid,  or  assist 
in  transacting  any  business  for  an  insurance  company  not 
organized  under  its  laws  an  agent  of  said  corporation  and  to 
provide  that  service  of  summons  upon  him  in  a  civil  action 
shall  have  the  effect  of  service  upon  the  corporation ;  ^^  and  to 
prescribe  the  amount  of  capital  required  of  a  foreign  corpora- 
tion before  allowing  it  to  enter ;  ^^  and  to  require  the  deposit 
of  a  security  fund  within  the  state ;  ^^  and  full  and  satisfac- 
tory information  as  to  the  business  methods  and  financial  con- 

what  are  insurance  companies  under  various  statutes,  see  State  v. 
Nichols,  78  Iowa,  747;  State  v.  National  Ace,  Soc.  of  N,  Y.,  103  Wis. 
208,  79  N.  W.  220;  Lubrano  v.  Imperial  Council  O.  U.  F.,  20  R.  I. 
27,  38  L.  R.  A.  546;  Brown  v.  Balfour,  46  Minn.  68,  12  L.  R.  A.  373; 
State  v.  Miller,  66  Iowa,  26;  Lee  Mut.  Fire  Ins.  Co.  v.  State,  60 
Miss.  395;  Sherman  v.  Com.,  82  Ky.  102;  Conn.  v.  National  Mut.  Aid 
Ass'n,  94  Pa.  St.  481;  State  v.  National  Ass'n,  85  Kan.  51;  State  v. 
Vigilant  Ins.  Co.,  30  Kan.  585;  State  v.  Citizens'  Ben.  Ass'n,  6  Mo. 
App.  163;  State  v.  Brawner,  15  Mo.  App.  597;  State  v.  Northwestern 
Mut.  L.  Stock  Ass'n,  16  Neb.  549;  State  v.  Farmers'  &  Mechanics' 
Mut.  Benev.  Ass'n,  18  Neb.  276;  State  v.  Moore,  38  Ohio  St.  7;  Co- 
operative Fire  Ins.  Co.  v.  Lewis,  12  Lea  (Tenn.),  136;  Golden  Rule 
v.  People,  118  111.  492.  What  are  not:  Commercial  League  Ass'n 
V.  People,  90  111.  166;  State  v.  Iowa  Mut.  Aid  Ass'n,  59  Iowa,  125; 
State  V.  Mutual  Protective  Ass'n,  26  Ohio  St.  19;  Supreme  Council, 
O.  C.  F.  V.  Fairman,  10  Abb.  N.  C.  (N.  Y.)  162. 

"Hartford  Fire  Ins.  Co.  v.  Raymona,  70  Mich.  485,  38  N.  W.  474; 
Manchester  Fire  Ins.  Co,  v.  Herriott,  91  Fed.  711. 

"  Fred  Miller  Brewing  Co,  v.  Council  Bluffs  Ins,  Co,,  95  Iowa,  31. 
63  N.  W.  565. 

"Parker  v.  Lamb.  99  Iowa.  265,  68  N.  W.  686.  34  L.  R.  A.  704. 

"Attorney  General  v.  North  American  Life  Ins.  Co.,  82  N.  Y.  172; 
Employers'  Liability  Assur.  Co.  v.  Commissioner  of  Ins.,  64  Mich. 
614.  31  N.  W.  542. 


I  23  "WHO   MAY   INSUKE. 


25 


dition  of  a  company  ;^^  and  a  license  tax;  "  and  to  prescribe 
the  qualifications  of  agents  ;^^  and  to  prohibit  an  agent  acting 
for  or  soliciting  for  an  unlicensed  company.  ^^  By  analogy 
it  would  seem  that  a  foreign  insurance  company  can  be  com- 
pelled to  pay  a  percentage  of  its  premiums  to  a  local  cor- 
poration for  the  benefit  of  a  firemen's  relief  fund.^*^ 

An  insurance  commissioner  in  issuing  permits  to  foreign 
corporations  permitting  them  to  do  business  in  his  state, 
acts  in  a  ministerial  capacity.  His  determination  is  not 
judicial  or  final  and  mandamus  will  lie  to  compel  him  to 
license  a  foreign  company  when  it  has  complied  with  the 
requirements  of  the  statutes  in  the  matter.^^  Nor  can  he 
arbitrarily  revoke  a  license  after  one  has  been  granted.^^  A 
foreign  corporation  which  has  complied  with  the  laws  of  a 
state,  should  not,  as  a  matter  of  retaliation  by  force  of  a  re- 

"  People  V.  State  Ins,  Co.,  19  Mich.  392;  State  v.  Mathews,  44  Mo. 
523. 

''  City  of  Columbus  v.  Hartford  Ins.  Co.,  25  Neb.  83,  41  N.  W,  140; 
Prince  v.  City  of  St.  Paul,  19  Minn.  267  (Gil.  226) ;  Moss  v.  City  of 
St.  Paul,  21  Minn.  421;  State  v.  New  England  Mut.  Ins.  Co.,  43  La. 
Ann.  133. 

"Cases  supra;  Paul  v.  Virginia,  8  Wall.  (U.  S.)  168;  State  v. 
Johnson,  43  Minn.  350;  Hooper  v.  California,  155  U.  S.  648.  Compare 
Allgeyer  v.  Louisiana,  165  U.  S.  578;  List  v.  Com.,  118  Pa.  St.  322. 

"  Com.  V.  Nutting,  175  Mass.  154,  55  N.  E.  895-;  State  v.  Johnson, 
43  Minn.  350;  Allgeyer  v.  Louisiana,  165  U.  S.  578. 

'"'  See  cases  supra;  Liverpool  &  L.  &  G.  Ins.  Co.  v.  Clunie,  88  Fed. 
160;  Trustees  v.  Rome,  93  N.  Y,  313;  Childs  v.  Firemen's  Ins.  Co., 
€6  Minn.  393,  69  N.  W.  141. 

"People  V.  Van  Cleave,  183  111.  330,  47  L.  R.  A.  795  (in  this  case 
it  was  held  that  the  license  could  not  be  refused  because  of  the 
similarity  of  the  name  of  a  foreign  company  to  that  of  a  domestic 
one) ;  State  v.  Fidelity  &  Casualty  Ins.  Co.,  39  Minn.  539.  Compare 
High  Court  of  W.  I,  O.  F.  v.  Commissioner  of  Ins.,  98  Wis.  94,  73 
N.  W.  326. 

^-Metropolitan  Life  Ins.  Co.  v.  McNall,  26  Ins.  Law  J.  641,  81 
Fed.  888. 


26  THE    PARTIES   TO   THE    CONTRACT.  §  24 

taliatory  statute,  be  excluded  from  doing  business  in  such 
state  upon  the  grounds  that  the  laws  of  the  state  where 
the  foreign  corporation  was  created  would  exclude  corpora- 
tions of  the  other  state,  unless  it  is  clearly  apparent  that  such 
is  the  effect  of  the  foreigTi  law.^^  ■ 

Validity  of  Statutes  Prohibiting  Individuals  from  Doing  an 
Insurance  Business. 

In  a  single  case  the  authority  of  the  legislature  to  confine 
the  insurance  business  to  corporations  has  been  sustained  by 
a  divided  court.  The  dissenting  opinion  in  which  three 
judges  concurred  is  so  forcible  and  logical  and  the  reasoning 
against  the  constitutionality  of  such  a  statute  is  so  cogent, 
that  the  main  decision  carries  little  weight,  except  so  far  as  it 
establishes  a  doubtful  precedent  on  a  new  question.^*  How- 
ever this  may  be  there  is  no  doubt  of  the  invalidity  of  a  stat- 
ute discriminating  in  favor  of  the  citizens  of  one  state  and 
against  those  of  another  state  in  regard  to  the  privilege  of 
carrying  on  the  business.  ^'^ 

Same  —  Failure  to  Comply  with  Statute. 

§  24.  Contracts  of  insurance  made  by  an  insurer  who  has 
neglected  to  comply  with  the  lex  loci  contractus  are  enforce- 
able by  the  insured,  but  not  by  the  insurer. 

The  well  settled  general  rule  is  that  when  a  statute  pro- 
hibits or  attaches  a  penalty  to  the  doing  of  an  act,  the  act  is 

"  state  V.  Fidelity  &  Casualty  Ins.  Co.,  39  Minn.  539. 

"  Com.  V.  Vrooman.  164  Pa.  St.  306,  25  L.  R.  A.  250;  State  v.  Stone, 
118  Mo.  388,  25  L.  R.  A.  243.  Compare  Lamb  v.  Bowser,  7  Biss.  315, 
Fed.  Cas.  No.  8,008;  Allgeyer  v.  Louisiana,  165  U.  S.  578;  State  v. 
Scougal,  3  S.  D.  55.  15  L.  R.  A.  477;  Pennsylvania  Fire  Ins.  Co.  v. 
Moore,  21  Tex.  Civ.  App.  528,  51  S.  W.  878;  Imperial  Shale  Brick  Co. 
V.  Jewett,  42  App.  Div.  (N.  Y.)  588,  60  N.  Y.  Supp.  35. 

"  Hoadley  v.  Purifoy,  107  Ala.  276,  30  L.  R.  A.  351;  State  v.  Stone, 
118  Mo.  388,  25  L.  R.  A.  243.  See  notes  to  Schoolcraft's  Adm'r  v. 
Louisville  &  N.  R.  Co.,  92  Ky.  233,  14  L.  R.  A.  579. 


§  24:  FAILUKE    TO    COMPLY    "WITH    STATUTE.  27 

void,  and  will  not  he  enforced,  nor  will  the  law  aid  one  to  re- 
cover money  or  property  which  he  has  expended  in  the  unlaw- 
ful execution  of  it.  But  notwithstanding  this  general  rule 
it  does  not  follow  when  a  statute  attaches  a  penalty  to  the 
doing  of  an  act  that  it  always  implies  such  a  prohibition  as 
will  make  the  act  void  under  all  circumstances.  The  courts 
will  look  to  the  language  of  the  statute,  the  subject  matter  of 
it,  the  wrong  or  evil  which  it  is  sought  to  remedy  or  prevent, 
and  the  purpose  sought  to  be  accomplished  in  its  enactment; 
and  if  from  all  these,  it  is  manifest  that  it  was  not  intended  to 
imply  a  prohibition,  or  to  render  the  prohibited  act  void,  but 
simply  to  render  it  unenforceable  by  the  one  who  has  not  com- 
plied with  the  statute,  the  courts  will  so  hold. 

The  evident  purpose  of  such  statutes  as  we  have  considered 
h  for  the  security  of  citizens  doing  business  with  insurance 
companies,   and  to  place  foreign  corporations  on  the  same 
plane  as  domestic  corporations  by  making  them  amenable  to 
local  laws  and  subject  to  the  jurisdiction  and  control  of  local 
courts.     Whether  a  statute  was  meant  merely  to  invalidate 
policies  issued  by  companies   in  contravention  of  its  pro- 
visions, or  merely  to  provide  that  policies  so  issued  should  be 
unenforceable  in  so  far  as  to  deny  to  the  insurer  the  right 
to  enforce  any  contractual  liability  of  the  insured,  or  neither 
or  both,  is  to  be  determined  from  a  consideration  of  the  stat- 
ute as  a  whole.     The  ordinary  purpose  is  the  one  above  men- 
tioned, viz.  to  protect  policy  holders  and  others  dealing  with 
insurance  companies ;  and  to  this  end  it  is  usually  made  im- 
1  awful  for  companies  to  transact  business,  and  for  agents  to 
act  on  behalf  of  such  companies,  until  certain  conditions  have 
been  complied  with.     These  statutes  do  not  usually  impose 
on  persons  dealing  with  companies  the  duty  and  risk  of  ascer- 
taining whether  they  have  complied  with  the  law  and  are 
entitled  to  do  business  in  the  state  in  which  such  dealings 


28  THE   PARTIES   TO   THE    CONTRACT.  §  24: 

take  place.  Even  if  a  company  has  not  become  authorized  to 
make  a  contract  upon  wliich  a  recovery  is  sought,  it  cannot 
set  np  its  o^vn  default  of  duty  to  defeat  an  action  by  one  who 
had  iimocently  contracted  with  it.  The  right  of  an  insured 
to  recover  does  not  depend  upon  the  fact  of  the  insurer  having 
done  its  duty,  and  a  complaint  is  not  defective  because  it 
does  not  allege  that  fact.^^ 

In  construing  statutes  which  prohibit  corporations  doing 
business  in  a  state  before  comphdng  with  prescribed  condi- 
tions, a  distinction  is  sometimes  made  between  statutes  which 
impose  a  penalty  for  violation  of  the  law  and  those  which  do 
not  impose  any  express  penalty.  Judge  Elliott,  in  his  recent 
work  on  Corporations,  says :  "The  decisions  are  not  uniform, 
but  it  seems  that  the  weight  of  authority  supports  the  proposi- 
tion that,  where  a  state  prohibits  a  foreign  corporation  from 
doing  business  within  its  limits  without  having  first  complied 
Avith  certain  conditions,  and  imposes  a  penalty  for  the  viola- 
tion of  the  statute,  the  penalty  is  the  sole  means  contemplated 
for  compelling  obedience  and  the  contract  is  valid  and  en- 
forceable. Where  no  penalty  is  provided  it  is  generally  held 
tliat  such  contracts  are  not  enforceable,  unless  the  conditions 
are  such  as  to  give  rise  to  an  estoppel."  ^''^  The  authorities 
on  this  question  are  reviewed  at  length  by  the  supreme  court 

^'Seamans  v.  Knapp-Stout  &  Co.,  89  Wis.  177,  27  L.  R.  A.  362; 
Ganser  v.  Fireman's  Fund  Ins.  Co.,  34  Minn.  373;  Swan  v.  Water- 
town  Fire  Ins.  Co.,  96  Pa.  St.  37;  Clay  Fire  &  Marine  Ins.  Co. 
V.  Huron  Salt  &  Lumber  Mfg.  Co.,  31  Mich.  346;  Germania  Fire 
Ins.  Co.  V.  Curran,  8  Kan.  9;  Pennypaclver  v.  Capital  Ins.  Co.,  8'J 
Iowa,  56,  8  L.  R.  A.  236;  Phenix  Ins.  Co.  v.  Pennsylvania  R.  Co.,  134 
Ind.  215,  20  L.  R.  A.  405;  Watertown  Fire  Ins.  Co.  v.  Rust,  141  111. 
85;  Knights  Templar  &  Masons'  Life  Indemnity  Co.  v.  Berry,  50  Fed. 
511;  Seamans  v.  Christian  Bros.  Mill  Co.,  66  Minn.  205;  Fidelity  & 
Casualty  Co.  of  N.  Y.  v.  Eickhoff.  63  Minn.  170,  65  N.  W.  351;  Ran- 
dall V.  Tuell.  89  Me.  442.  38  L.  R.  A.  143. 

^^  Elliott,  Corp.  (3d  Ed.)   §§  269,  270. 


§  24:  FAILURE   TO    COMPLY    WITH    STATUTE.  29 

of  West  Virginia^^  and  tlie  rule  is  stated  as  follows :  "It  is 
clearly  not  the  primary  purpose  of  the  legislature  in  passing 
these  laws  to  render  the  contracts  and  dealings  of  corporations 
which  have  not  complied  with  these  requirements,  void  and 
unenforceable.  Hence  *  *  *  where  the  legislature  has 
not  expressly  declared  that  this  result  shall  follow  from  a  fail- 
ure to  comply  with  the  statute,  the  courts  ought  not  to  imply 
such  a  result  unless  this  be  necessary  in  order  to  attain  the  pri- 
mary object  for  v/hich  the  statute  was  enacted.  Upon  this 
ground  it  has  been  held  that  a  contract  made  by  a  foreign  cor- 
poration before  it  has  complied  with  the  statutory  prerequi- 
sites to  the  right  to  do  business  will  not,  on  that  account,  be 
held  abolutely  void,  unless  the  statute  expressly  so  declares; 
and  if  the  statute  imposes  a  penalty  upon  the  corporation  for 
failing  to  comply  w^ith  such  prerequisites,  such  penalty  will 
be  deemed  exclusive  of  any  others.  ^^  *  *  *  "^he  courts  of  In- 
diana, Illinois,  Wisconsin  and  perhaps  in  some  other  states 
hold  a  different  doctrine.  In  Vermont  and  Oregon,  it  has  been 
held  that  a  non-compliance  with  the  precedent  conditions  of  the 
statutes  of  those  states  by  foreign  corporations  rendered  their 
contracts  void.  But  it  will  be  observed  that  these  statutes  im- 
posed no  penalty  for  the  failure  to  comply  with  their  pro- 
visions ;  and  it  is  principally  upon  this  ground  that  tlie  con- 
tracts are  held  void,  because  otherwise  the  statute  might  be 
evaded  with  impunity.  Thus  in  Bank  v.  Pagc,^^  the  court 
says :     'The  general  rule  is  that  a  contract  in  violation  of  law 

■^  Toledo  Tie  &  Lumber  Co.  v.  Thomas.  33  W.  Va.  566. 

=»  National  Bank  v.  Matthews,  98  U.  S.  621;  Columbus  Ins.  Co.  v. 
Walsh,  18  Mo.  229;  Union  Mut,  Life  Ins.  Co.  v.  McMillen,  24  Ohio 
St.  67;  Ehrman  v.  Teutonia  Ins.  Co.,  1  McCrary,  123,  1  Fed.  471; 
Clay  F.  &  M.  Ins.  Co.  v.  Huron  S.  &  L.  Mfg.  Co.,  31  Mich.  346;  Hart- 
ford Live  Stock  Ins.  Co.  v.  Matthews,  102  Mass,  221;  2  Morawetz, 
Priv.  Corp.  §  665. 

=">  6  Or.  431--436. 


30  THE   PARTIES   TO   THE    CONTRACT.  §  24 

is  void.  The  only  exception  to  the  rule  is  that,  when  a  law 
imposes  a  penalty  for  the  prohibited  act,  and  it  clearly  ap- 
pears that  the  legislature  intended  no  more  than  to  impose 
the  penalty  for  the  violation  of  the  law,  a  contract  made  in 
violation  of  the  statute  is  not  void.'  It  is  evidently  the  want 
of  such  penalty  in  the  statute  that  influenced  the  court  to  hold 
the  contract  void.  And  such  seems  to  be  the  ground  of  the 
decisions  in  Indiana  and  other  states."  ^^ 

In  Idaho  it  has  been  held  that  to  the  general  rule  that  an 
act  in  violation  of  a  statute  forbidding  it  is  void,  there  is  an 
exception  when  the  statute  is  for  the  protection  of  the  public 
revenue,  does  not  expressly  make  the  act  void,  and  the  act  is 
not  malum  in  se  nor  detrimental  to  good  morals.^^ 

Summary. 

It  is  evident  that  much  confusion  exists  both  in  the  reports 
and  in  the  text  books  as  to  the  validity  and  effect  of  contracts 
made  by  corporations  within  a  state  wherein  they  were  not 
authorized  to  do  business  because  of  a  failure  to  comply  with 
a  statute  forbidding  them  to  transact  business  before  con- 
forming with  certain  requirements  and  conditions.  It  must 
be  remembered  that  there  are  at  least  two  parties  to  every 
contract,  and  that  their  rights  in  the  matter  of  the  enforce- 
ment of  the  contract  may  be  different.  A  contract  is  fre- 
quently held  binding  on  one  party  to  it  and  voidable  as  to  the 
other  at  his  option,  as  in  the  case  of  the  contracts  of  persons 

«  Walter  A,  Wood  M.  &  R.  Machine  Co.  v.  Caldwell,  54  Ind.  273; 
Lester  v.  Howard  Bank,  33  Md.  558.  The  authorities  on  this  ques- 
tion are  reviewed  in  2  Morawetz,  Priv.  Corp.  §§  662-666,  and  the 
author  announces  as  his  conclusion  therefrom  that,  "unless  it  ap- 
pear affirmatively  that  the  legislature  intended  to  render  a  for- 
bidden act  or  contract  absolutely  void  in  legal  contemplation,  it 
will  not  be  so  held." 

«  Vermont  Loan  &  Trust  Co.  v.  Hoffman  (Idaho),  37  L.  R.  A.  509, 
49  Pac.  314. 


§  24:  FAILURE    TO   COMPLY    WITH    STATUTE.  31 

under  guardiansliip,  or  minors,  or  contracts  procured  by 
fraud  or  duress.  Much  of  this  confusion  mentioned  above 
has  arisen  from  the  faihire  to  keep  in  mind  that  contracting 
parties  have  not  always  an  equal  right  to  the  enforcement 
of  a  contract,  and  from  the  failure  to  distinguish  between 
the  right  of  a  corporation  to  allege  and  stand  upon  its  own 
default  as  a  defense,  and  the  right  of  the  other  party  to  set 
up  such  default  of  the  corporation  when  the  corporation 
itself  seeks  to  enforce  the  contract. 

A  corporation  will  be  estopped  to  assert  its  own  wrong  as 
a  defense  against  its  own  contract,  while  that  same  wrong  may 
be  open  to  and  constitute  a  complete  defense  to  the  other 
party  when  sued  on  the  contract. 

From  what  has  been  said  and  from  an  examination  of  the 
numerous  and  conflicting  authorities  on  this  question  the 
following  rules  are  deduced,  viz. :  As  a  general  statement  of 
law  a  contract  founded  on  an  act  forbidden  by  statute  is  void. 
Whether  a  contract  which  violates  the  statute  is  only  partially, 
or  is  wholly  void,  will  depend  upon  the  intention  expressed 
in  the  particular  statute.  In  construing  such  a  statute  courts 
will  always  look  to  the  language  of  the  statute,  the  subject 
matter  of  it,  the  nature  and  effect  of  the  acts  forbidden,  the 
wrong  or  evil  sought  to  be  remedied,  prevented  or  avoided,  the 
purpose  of  the  enactment  of  the  statute,  and  the  evident  in- 
tention of  the  legislature  as  inferred  from  the  wording  of  the 
statute  considered  in  connection  with  these  matters  and  in 
the  light  of  the  conditions  existing  or  anticipated  at  the  time 
of  the  passage  of  the  act.  The  evident  purpose  of  the  passage 
of  laws  regulating  insurance  companies,  whether  domestic 
or  foreign,  is  the  protection  of  the  public  who  transact  busi- 
ness with  such  companies.  That  one  doing  business  with 
such  companies  is  entitled  to  rely  on  the  presumption  that 
the  companies  have  complied  with  the  laws,  and  are  entitled 


32  THE    PARTIES    TO   THE    CONTRACT.  §  24r 

to  exercise  the  riglits  tliej  assume  to  exercise.  That  a  cor- 
poration can  only  obtain  a  legal  existence  for  business  pur- 
poses within  a  state,  or  acquire  contractual  rights  which 
the  courts  of  a  state  will  recognize,  by  complying  with  the  laws 
of  the  state.  That  effect  is  best  given  to  the  purpose  and  in- 
tention of  statutes  prohibiting  insurers  from  doing  business 
within  a  state  except  upon  certain  prescribed  conditions  by 
holding,  1st,  that  an  insurer  cannot  avail  itself  of  any  con- 
tract into  which  it  has  entered  before  it  has  complied  with 
the  statute;  2nd,  that  as  against  one  who  has  innocently 
dealt  with  it,  an  insurer  is  estopped  to  assert  its  own  neglect 
of  duty  and  violation  of  law. 

Illustrations:  A  bond  insuring  a  foreign  corporation 
against  the  dishonesty  of  its  manager  in  Pennsylvania  is 
void,  and  there  can  be  no  recovery  thereon,  where  such  cor- 
poration has  not  complied  with  the  Pennsylvania  statute  re- 
quiring the  filing  of  a  statement  and  declaring  that  any  per- 
son transacting  business  for  such  corporation  ^^ithout  compli- 
ance with  the  statute,  shall  be  guilty  of  a  misdemeanor.^^  A 
foreign  insurance  corporation  cannot  claim  the  benefit  of 
defenses  open  to  companies  qualified  to  do  business  in  a 
state  ;^^  nor  can  it  recover  premiums  on  a  contract  insuring 
property  within  a  state  where  it  has  not  complied  with  the 
statutory  requirements  so  as  to  be  authorized  to  do  business 
in  that  state  ;^^  but  this  failure  to  qualify  does  not  relieve 

"  McCanna  v.  Citizens'  Trust  &  Surety  Co.,  76  Fed.  420,  35  L.  R. 
A.  236;  Randall  v.  Tuell,  89  Me.  443,  38  L.  R.  A.  143;  Edison  General 
Electric  Co.  v.  Canadian  Pacific  Nav.  Co.,  8  Wash.  370,  24  L.  R.  A. 
315,  and  notes. 

"National  Union  v.  Marlow,  74  Fed.  775. 

»'' Gilbert  v.  State  Ins.  Co.,  3  Kan.  App.  1,  44  Pac.  442;  Buell  v, 
Breese  M.  &  G.  Co.,  65  111.  App.  271;  Reliance  Mut.  Ins.  Co.  v.  Saw- 
yer, 160  Mass.  413,  36  N.  B.  59;  Seamans  v.  Christian  Bros.  Mill  Co., 
66    Minn.  205,  68    N.  W.  1065;    Haverhill    Ins.  Co.  v.  Prescott,  42 


§  2i  FAILURE    TO    COMPLY    WITH    STATUTE.  33 

it  of  liability  to  the  insured. ^°  In  Illinois  under  a  statute 
"that  it  shall  not  be  lawful  for  any  agent  or  agents  of  any 
insurance  company  *  *  *  to  take  risks  or  to  do  or  transact  any 
business  of  insurance  in  this  state,  without  first  producing 
a  certificate  of  authority  from  the  auditor  of  state,"  and 
imposing  a  penalty  for  a  violation  of  its  provisions ;  the  su- 
preme court  held  that  a  promissory  note  given  to  an  insurance 
company  was  void  and  unenforceable,  saying  "when  the  legis- 
lature prohibits  an  act  or  declares  that  it  shall  be  unlawful 
to  perform  it,  every  rule  of  interpretation  must  say  that  the 
legislature  intended  to  interpose  its  power  to  prevent  the  act, 
and,  as  one  of  the  means  of  its  prevention,  that  the  courts  shall 
hold  it  void.  This  is  as  manifest  as  if  the  statute  had  de- 
clared that  it  should  be  void.  To  hold  other^dse  would  be  to 
give  the  person,  or  corporation,  or  individual,  the  same  rights 
in  enforcing  prohibited  acts  as  the  good  citizen  who  respects 
and  conforms  to  the  law.  To  permit  such  contracts  to  be 
enforced,  if  not  offering  a  premium  to  violate  the  law,  it  cer- 
tainly withdraws  a  large  portion  of  the  fear  that  deters  men 
from  defying  the  law.  To  do  so,  places  the  person  who 
violates  the  law  on  an  equal  footing  with  those  who  strictly 
observe  its  requirements.  That  this  contract  is  absolutely 
void  as  to  appellee  we  entertain  no  doubt." ^''^  The  same  rule 
was  applied  in  Wisconsin  under  a  similar  statute,^^  and  in 
Michigan  where  the  contract  of  insurance  had  been  made 

N.  H.  547;  Lan&worthy  v.  Garding,  74  Minn.  325,  77  N.  W.  207; 
Ford  V.  Buckeye  State  Ins.  Co.,  6  Bush  (Ky.),  133.  In  Indiana  the 
statute  simply  prohibits  the  enforcement  of  the  contract  until  com- 
pliance.   Maine  Guarantee  Co.  v.  Cox,  146  Ind.  107. 

"  Ante,  note  26  et  seq. 

»'  Cincinnati  Mut.  Health  Assur.  Co.  v.  Rosenthal,  55  111.  85-91. 

^  Aetna  Ins.  Co.  v.  Harvey,  11  Wis.  394;  Charter  Oak  Life  Ins.  Co. 
V.  Sawyer,  44  Wis.  387;   Lycoming  Fire  Ins.  Co.  v.  Wright,  55  Vt. 
526;  Buckley  v.  Humason,  50  Minn.  195,  16  L.  R.  A.  423. 
KERR,  INS.— 3 


34  THE    PARTIES    TO    THE    CONTRACT.  §  25 

througli  the  mails  by  a  corporation  of  another  state."^  It  has 
however  been  held  that  a  corporation  incorporated  under 
the  laws  of  Wisconsin  may  enter  into  a  valid  contract  of  in- 
surance with  an  insurance  company  of  that  state  upon  prop- 
erty situated  within  a  state  in  which  the  insurance  company 
is  not  authorized  to  do  business.  But  in  this  case  the  two 
corporations  were  resident  in  the  state  of  Wisconsin,  the  con- 
tract was  made  there,  and  the  insurer  was  authorized  to  do 
business  there.  This  being  so  there  would  seem  to  be  no  good 
reason  why  the  courts  of  Wisconsin  should  not  enforce  the 
liability  of  the  insured  for  his  premiums  even  though  the 
properties  covered  were  situate  in  other  states  where  the  in- 
surer had  not  qualified  to  do  business. ^*^ 

Same — Vested  Rights. 

§  25.  An  insurer  obtains  no  vested  right  to  do  business  in  a 
state  by  complying  with  the  existing  laws  of  that  state. 

A  foreign  insurance  company  does  not  acquire  any  vested 
rights  by  complying  with  the  police  regulations  or  comity 
laws  of  a  state  which  cannot  be  affected  by  subsequent  changes 

»»  Seamans  v.  Temple  Co.,  105  Mich.  400,  28  L.  R.  A.  430.  The  court 
said:  "If  it  be  conceded  that  the  contract  was  made  in  Wisconsin, 
and  that  the  premiums  and  loss,  if  any,  are  payable  there,  it  is 
as  much  in  contravention  of  the  policy  of  this  state  as  though  it 
had  been  made  and  was  to  be  performed  here.  It  cannot  be  sup- 
posed that  the  statutes  cited  were  intended  merely  to  prevent  the 
act  of  making  the  contract  in  this  state.  The  object  is  to  protect 
the  citizens  of  this  state  against  irresponsible  companies,  and  to 
prevent  insurance  by  unauthorized  companies  upon  property  in  this 
state."  See,  also,  Hartford  Fire  Ins.  Co.  v.  Raymond,  70  Mich.  501; 
Seamans  v.  Zimmerman,  91  Iowa,  363,  59  N.  W.  290;  Rose  v.  Kim- 
berly  &  Clark  Co.,  89  Wis.  545.  27  L.  R.  A.  556. 

*"  Seamans  v.  Knapp-Stout  &  Co.,  89  Wis,  171,  27  L.  R.  A.  362.  See 
Cone  Export  &  Commission  Co.  v.  Poole,  41  S.  C.  70,  and  notes  to 
same  in  24  L.  R.  A.  289.  Compare  State  Mut.  Fire  Ins.  Ass'n  v. 
Brinkley  Stave  &  Heading  Co.,  61  Ark.  1,  29  L,  R.  A.  712. 


§  26  KETALIATORY    STATUTES.  35 

in  siicli  regulations  or  laws.  After  compliance  with  tlie  laws 
of  a  state  insurance  companies  may  enter  the  state  and  do 
business  therein;  but  their  right  to  remain  depends  upon 
their  compliance  wdth  then  existing  and  subsequently  en- 
acted laws ;  and  they  may  be  ousted  of  all  rights,  privileges, 
and  franchises  acquired  by  them  if  either  the  companies 
themselves  or  the  agents  through  whom  they  do  business 
violate  the  statutes  or  fail  to  comply  with  all  their  pro- 
visions.^^ A  statute  shortening  the  time  of  an  insurer's  im- 
munity from  suit  to  forty  instead  of  ninety  days,  but  without 
extending  the  period  of  the  statute  of  limitations,  affects  the 
remedy  merely,  and  does  not  impair  any  contractual  rights 
existing  before  the  statute  w^as  changed."*^ 

Same  —  Retaliatoey  Statutes. 

§  26.  Retaliatory  statutes  are  constitutional  and  enforceable. 

The  power  of  the  state  to  distinguish  between  her  own  cor- 
porations and  those  of  other  states  desirous  of  transacting 
business  within  her  jurisdiction  being  clearly  established,  it 
belongs  to  the  state  to  determine  the  nature  and  degree  of  dis- 
crimination, subject  only  to  such  limitations  on  her  sover- 
eignty as  may  be  found  in  the  fundamental  law  of  the  Union. 
A  statute  imposing  on  an  insurance  company  of  another 
state  the  same  taxes,  fines,  and  fees,  and  the  same  restrictions 
and  conditions  (if  greater  or  more  onerous  than  those  im- 
posed upon  domestic  corporations)  which  are  imposed  by 
the  home  state  of  tlie  foreign  corporation  on  similar  cor- 

"  State  V.  Firemen's  Fund  Ins.  Co.,  152  Mo.  1,  45  L.  R.  A.  363; 
Philadelphia  Fire  Ass'n  v.  New  York,  119  U.  S.  110;  State  v.  Lan- 
cashire Fire  Ins.  Co.,  66  Ark.  466,  45  L.  R.  A.  348;  Aetna  Ins.  Co.  v. 
Com.  (Ky.),  45  L.  R.  A.  355;  Waters-Pierce  Oil  Co.  v.  Texas,  177 
U.  S.  28. 

"  Jones  V.  German  Ins.  Co..  110  Iowa,  75,  46  L.  R.  A.  860. 


36  THE    PAKTIES   TO   THE    CONTKACT.  §  2G 

porations  of  the  first  mentioned  state  are  constitutional.*^ 
The  J  are  not  void  for  uncertainty ;  ^^  nor  are  they  an  unlaw- 
ful delegation  of  legislative  power, ^^  and  do  not  violate  a 
constitutional  provision  requiring  uniformity  of  taxation."*"  . 
But  such  statutes  must  be  confined  to  cases  coming  fairly  with- 
in their  terms,  and  will  be  applied  only  where  it  is  clear  that 
the  foreign  laws  would  operate  under  similar  circumstances ;  ^^ 
and  when  it  appears  that  the  state  of  the  foreign  corporation 
imposes  greater  burdens  upon  the  corporations  of  the  state 
*whose  law  is  to  be  enforced  than  the  latter  state  itself  does.^^ 
It  is  immaterial  that  the  foreign  state  has  never  enforced  such 
a  law.  The  existence  of  the  law  is  sufficient  to  warrant  the 
passage  of  a  retaliatory  statute  and  its  being  called  into 
operation.'*^ 

What  Constitutes  "  Doing  Business." 

A  statute  prohibiting  any  agent  of  a  foreign  insurance 
company  from  taking  risks  or  transacting  any  insurance  busi- 

^  Philadelphia  Fire  Ass'n  v.  New  York,  119  U.  S.  110. 

"  State  V.  Ins.  Co.  of  North  America,  115  Ind.  257. 

*' People  V.  Philadelphia  Fire  Ass'n.  92  N.  Y.  311;  Phoenix  Ins.  Co. 
V.  Welch,  29  Kan.  672;  contra,  Clark  v.  Port  of  Mobile,  67  Ala.  217. 

"'Home  Ins.  Co.  v.  Swigert,  104  111.  653;  Goldsmith  v.  Home  Ins. 
Co.,  62  Ga.  378;  Blackmer  v.  Home  Ins.  Co.,  115  Ind.  596;  Haverhill 
Ins.  Co  V.  Prescott,  42  N.  H.  547,  80  Am.  Dec.  123. 

*' State  V.  Fidelity  &  Casualty  Ins.  Co.,  39  Minn.  538;  State  v.  Fi- 
delity &  Casualty  Ins.  Co.,  49  Ohio  St.  440,  16  L.  R.  A.  611;  State  v. 
Western  Union  Mut.  Life  Ins.  Co.,  47  Ohio  St.  167,  8  L.  R.  A.  131; 
People  V.  Fidelity  &  Casualty  Co..  153  HI.  25.  26  L.  R.  A.  295. 

«  State  V.  Reimund.  45  Ohio  St.  214. 

"State  V.  Fidelity  &  Casualty  Co.,  77  Iowa,  648;  Germania  Ins. 
Co.  V.  Swigert,  128  III.  237,  4  L.  R.  A.  473.  See,  also,  Talbott  v.  Fi- 
delity &  Casualty  Co.,  74  Md.  536,  13  L.  R.  A.  584;  Griesa  v.  Massa- 
chusetts Ben.  Ass'n,  133  N.  Y.  619,  30  N.  E.  1146;  Ohio  v.  Moore,  39 
Ohio  St.  486;  State  v.  Aciterman,  51  Ohio  St.  163,  24  L.  R.  A.  298,  and 
notes  thereto;  Cone  Export  &  Commission  Co.  v.  Poole,  41  S.  C.  70, 
24  L.  R.  A.  291.  and  notes. 


§  26  WHAT    IS    "  DOING   BUSINESS."  37 

ness  ■witliin  a  state  v/itliout  first  procuring  a  certificate  of 
authority  does  not  prohibit  the  transaction  of  business  gen- 
erally not  in  the  line  of  the  business  of  insurance,  e.  g.  does 
not  prohibit  the  taking  of  security  for  debts  or  the  foreclosure 
of  a  mortgage  given  as  security.^^  So  a  foreign  insurance 
company  may  sue  to  collect  a  premium  for  insurance  on 
property  in  the  state  although  it  is  not  entitled  to  do  business 
in  the  state,  where  the  contract  for  insurance  was  made  in 
another  state  in  which  it  was  valid ;  ^  ^  and  may  send  its  man- 
ager into  the  state  to  select  and  appoint  agents  before  comply- 
ing with  the  statute.^ ^  The  adjustment  of  a  loss  on  behalf 
of  a  foreign  corporation  which  has  not  complied  with  the 
requirements  of  statute  so  that  it  can  lawfully  do  business,  is 
not  a  transaction  of  business  within  the  meaning  of  that 
statute,  and  an  agent  is  not  liable  to  the  penalties  of  the 
act  for  adjusting  the  loss  ;^^  and  a  contrary  construction  would 
render  the  act  void.^^  A  life  insurance  company  which  is 
merely  collecting  premiums  and  paying  losses  on  old  policies 
is  still  "doing  business"  within  the  meaning  of  statutes  regu- 
lating foreign  corporations;^^  and  within  the  meaning  of  tax 
laws.^®  One  who  forwards  an  application  for  insurance  to 
the  office  of  a  foreign  corporation  in  another  state,  and  re- 

"Boulware  v.  Davis,  90  Ala.  207,  9  L.  R.  A.  601;  Cooper  Mfg.  Co. 
V.  Ferguson,  113  U.  S.  727;  Charter  Oak  Life  Ins.  Co.  v.  Sawyer,  44 
Wis.  387;  State  Mut.  Fire  Ins.  Ass'n  v.  Brinkley  Stave  &  Heading 
Co.,  61  Ark.  1,  29  L.  R.  A.  712. 

"  Connecticut  River  Mut.  Fire  Ins.  Co.  v.  Way,  62  N.  H.  622. 

"  D.  S.  Morgan  &  Co.  v.  White,  101  Ind.  413. 

"People  V.  Gilbert,  44  Hun  (N.  Y.),  522. 

"French  v.  People,  6  Colo.  App.  311,  40  Pac.  463;  Cooper  Mfg.  Co. 
V.  Ferguson,  115  U.  S.  727. 

^^  Price  V.  St.  Louis  Mut.  Life  Ins.  Co.,  3  Mo.  App.  262. 

"Smith  V.  International  Life  Assur.  Co.,  35  How.  Pr.  (N.  Y.)  126. 
See,  also,  Williams  v.  Commercial  Ins.  Co.,  75  Mo.  388;  Relfe  v.  Com- 
mercial Ins.  Co.,  5  Mo.  App,  173. 


38  THE  PAETIES  TO  THE  CONTRACT.       §§  27,  28 

ceives  in  return  a  policy  wliicli  lie  delivers  upon  receipt 
of  the  premium,  retaining  a  part  of  it  as  a  commission, 
Avill  be  regarded  as  "aiding  in  transacting  the  insurance  busi- 
ness" of  the  foreign  corporation.^'^  Sending  an  insurance 
policy  from  another  state  is  not  carrying  on  business  in  the 
state  where  the  policy  is  received  ;^^  otherwise  ii  the  policies 
are  sent  to  an  agent  in  such  state  to  be  delivered  by  him  upon 
receipt  of  the  premium.^^  The  mere  taking  of  a  single  appli- 
cation for  a  policy  and  forwarding  it  to  the  office  of  an 
insurer  in  another  state,  whence,  if  the  application  be  ap- 
proved, a  policy  is  mailed  to  the  applicant,  does  not  render 
one  liable  to  the  charge  of  having  issued  the  policy  or  done 
an  insurance  business ;  ^'^  but  the  situation  is  different  when 
the  one  forwarding  the  application  collects  the  premium.®^ 

Same  —  Coeporate  Powers  —  Ultra  Vires  Contracts. 

§  27.  An  insurance  corporation  can  accept  only  such  risks  as 
it  is  authorized  to  assume  by  its  charter  or  by  the  act  under 
which  it  is  incorporated. 

§  28.  When  an  insurance  company  assumes  a  risk  which  it 
is  not  authorized  to  assume  the  contract  is  ultra  vires,  and  un- 
enforceable as  a  contract;  but  the  party  repudiating  such  a 
contract  as  ultra  vires  raay  be  compalled,  in  a  proper  action, 
to  account  for  whatever  consideration  he  may  have  received 
from  the  other  party  upon  the  faith  of  the  contract. 

"  Pierce  v.  People,  106  111.  18.  Compare  People  v.  People's  Ins. 
Exchange,  126  111.  466.  2  L.  R.  A.  340. 

'"  Marine  Ins.  Co.  v,  St.  Louis,  I.  M.  &  S.  Ry.  Co.,  41  Fed.  643; 
State  V.  Williams,  46  La.  Ann.  922;  City  of  New  Orleans  v.  Virginia 
F.  &  M.  Ins.  Co.,  33  La.  Ann.  10. 

"  Berry  v.  Knights  Templars'  &  Masons'  Life  Indemnity  Co.,  45 
Fed.  439;  ante,  note  57. 

«°Hyde  v.  Goodnow,  3  N.  Y.  266;  Hacheny  v.  Leary,  12  Or.  40. 

"^  Cases  ante,  notes  57,  60.  See,  also,  post,  c.  8,  "Agents;"  Jack- 
son V.  State,  50  Ala.  141;  State  v.  Beazley,  60  Mo.  220;  State  v. 
United  States  Mut.  Ace.  Ass'n,  67  Wis.  624,  31  N.  W.  229;  notes  in 


§  28         CORPORATE    POWERS  —  ULTRA    VIRES   CONTRACTS.  39 

A  corporation  has  no  natural  or  inherent  rights  or  capaci- 
ties. Being  a  creature  of  the  state,  it  possesses  only  such 
powers  as  the  state  has  granted  to  it,  and  such  additional 
or  incidental  powers  as  are  necessary  to  its  corporate  ex- 
istence and  to  the  proper  execution  of  the  powers  granted. 
When  it  assumes  to  do  that  which  it  has  not  been  empowered 
by  the  state  to  do,  either  expressly  or  impliedly,  its  assumption 
of  power  is  vain,  the  act  is  void,  and  the  contract  is  ultra 
vires.  Such  a  contract  cannot  be  ratified  because  only  those 
acts  can  be  ratified  which  could  have  been  lawfully  done  or 
autliorized.  "The  reasons  why  a  corporation  is  not  liable 
upon  a  contract  ultra  vires',  that  is  to  say  beyond  the  powers 
conferred  upon  it  by  the  legislature,  and  varying  from  the 
object  of  its  organization,  are: 

"(1)  The  interest  of  the  public  that  the  corporation  shall 
not  transcend  the  powers  granted. 

"(2)  The  interest  of  the  stockholders  that  the  capital 
shall  not  be  subjected  to  the  risks  of  enterprises  not  contem- 
plated by  the  charter,  and  therefore  not  authorized  by  the 
stockholders  in  subscribing  for  stock. 

"(3)  The  obligation  of  every  one  entering  into  a  contract 
with  a  corporation  to  take  notice  of  the  legal  limits  of  its 
powers."  °^ 

There  is  however  a  distinction  between  the  exercise  by  a  cor- 
poration of  a  power  not  conferred  upon  it  and  therefore  de- 
nied to  it,  of  which  those  dealing  with  the  corporation  are 

2  L.  R.  A.  340,  24  L.  R.  A.  295,  14  L.  R.  A.  529,  9  L.  R.  A.  601,  45 
L.  R.  A.  538;   Lamb  v.  Bowser,  7  Biss.  315,  Fed.  Cas.  No.  8,008. 

°-  Pittsburgh,  C.  &  St.  L.  Ry.  Co.  v.  Keokuk  &  H.  Bridge  Co.,  131 
U.  S.  371;  Gent  v.  Manufacturers'  &  Merchants'  Mutual  Ins.  Co., 
107  111.  652;  T.uthe  v.  Farmers'  Mut.  Fire  Ins.  Co.,  55  Wis.  543,  13 
N.  W.  490;  Relfe  v.  Rundle,  103  U.  S.  222;  Redpath  v.  Sun  Mut.  Ins. 
Co.,  14  Low.  Can.  Jur.  90;  Davis  v.  Old  Colony  R,  Co.,  131  Mass.  258; 
post,  note  75. 


40  THE    PAKTIES   TO   THE    CONTRACT.  §  28 

bound  to  take  notice,  and  the  abuse  of  a  general  power  wlucli 
has  been  conferred,  or  irregularities  in  the  exercise  of  that 
power  which  are  unkno^Ti  to  the  other  contracting  party.  To 
ilhistrate:  an  insurance  company,  which  by  its  articles  of 
incorporation  was  formed  for  the  purpose  of  insuring  prop- 
erty against  fire,  cannot  insure  live  stock  against  death.*" 
But  one  who  is  insured  against  "accident  through  any  ex- 
ternal means"  by  a  corporation  created  originally  only  for 
the  purpose  of  insuring  travelers,  but  subsequently  author- 
ized by  statute  to  extend  its  plan  and  do  a  general  accident  in- 
surance business  upon  a  majority  vote  of  its  stockholders  ac- 
cepting the  additional  power,  is  entitled  to  assume  that  the 
necessary  steps  have  been  taken  to  accept  the  power  which 
the  ojSicers  assume  to  have  and  which  they  exercised  when  they 
issued  the  contract  in  question.  The  making  of  the  contract 
involved  was  a  representation,  as  was  its  continuance  in  that 
line  of  business,  that  a  meeting  had  been  regularly  held  and 
that  the  majority  of  the  stockholders  had  accepted  the  otfered 
power  necessary  to  make  the  contract,  and  the  insurer  is  es- 
topped to  show  the  contrary.** 

Illustrations  of  Rule. 

A  statute  empowering  married  women  to  insure  their  hus- 
bands' lives  does  not  authorize  an  agreement  whereby  the 
members  of  a  society  composed  of  married  women  agree  that 
in  event  of  the  death  of  the  husband  of  either  of  them  each 
will  pay  an  assessment  toward  a  fund  to  be  paid  to  the 
widow.*^     A  mutual  life  insurance  company  cannot  lawfully 

"Rochester  Ins.  Co.  v.  Martin,  13  Minn.  59;  O'Neil  v.  Pleasant 
Prairie  Mut.  Fire  Ins.  Co.,  71  Wis.  621,  38  N.  W.  345. 

"  Miller  v.  American  Mut.  Ace.  Ins.  Co.,  92  Tenn.  167,  20  h.  R.  A. 
775. 

^  Bruner  v.  Thiesner,  12  Mo.  App.  289. 


§  28  CORPORATE    ^O^VERS  —  ULTRA    YIRES    CONTRACTS.  41 

■contract  to  insure  a  particular  person  on  a  different  plan  or 
basis  than  other  members,  nor  to  insure  one  who  is  not  a 
member.'^''  If  the  articles  of  incorporation  do  not  provide 
for  the  pajTiient  of  policies  except  upon  the  death  of  the  in- 
sured, the  issuing  of  a  policy  payable  upon  the  occurrence 
of  total  disability  of  the  insured  is  unauthorized.®'^  A  mu- 
tual insurance  company  organized  under  a  statute  providing 
for  the  formation  of  corporations  for  the  purpose  of  mutual 
insurance  against  loss  or  damage  by  fire,  hail,  lightning,  or 
storms  and  prohibiting  the  insuring  of  any  property  other 
than  detached  dwellings  and  their  contents,  farm  buildings, 
and  their  contents  and  live  stock  and  hay  or  grain  in  the  bin 
or  stack,  has  no  power  or  authority  to  insure  the  standing  or 
growing  grain  of  one  of  its  members  against  losses  by  hail.®^ 
A  mutual  assessment  life  insurance  company  cannot  legally 
contract  to  pay  the  accrued  death  losses  of  another  company 
out  of  funds  which  it  has  collected  from  its  own  members;®^ 
nor  bind  itself  by  an  agreement  to  issue  to  the  members  of  a 
reinsured  company  a  form  of  certificate  which  it  cannot  issue 
to  its  own  members ;  '^°  has  no  right  to  receive  accessions  to  its 
funds  from  sources  not  authorized  by  its  charter  nor  to  adopt 
any  other  means  or  plans  for  making  payment  of  its  policies 
than  those  provided  for  in  its  charter  ;'^^  and  when  an  insur- 

"Clevenger  v.  Mutual  Life  Ins.  Co.,  2  Dak.  114;  Alvord  v.  Barker, 
107  Iowa,  143,  77  N.  W.  368;  Corey  v.  Sherman,  96  Iowa,  114,  32  L. 
R.  A.  490,  64  N.  W.  828;  State  v.  Manufacturers'  Mut.  Fire  Ass'n,  29 
Ohio  Law  J.  160,  24  L.  R.  A.  252.  As  to  membership  in  mutuals,  see 
note  22  L.  R.  A.  490. 

"  Preferred  Masonic  Mut.  Life  Ins.  Co.  v.  Giddings,  112  Mich.  401, 
70  N.  W.  1026. 

"^Delaware  Farmers'  Mut.  Fire  Ins.  Co.  v.  Wagner,  56  Minn.  240. 

'^  Twiss  V.  Guaranty  Life  Ass'n,  87  Iowa,  733,  55  N.  W.  8. 

'"Deshong  v.  Iowa  Life  &  Endowment  Ass'n,  92  Iowa,  163,  60 
N.  W.  505. 

"Kennan  v.  Rundle,  81  Wis.  212,  51  N.  W.  426.  See,  also,  Grayson 
V.  Willoughby,  78  Iowa,  83,  4  L.  R.  A.  365. 


42  THE    PAETIES   TO   THE   CONTRACT.  §  28 

ance  company  is  created  to  give  financial  aid  and  benefit  to 
the  "widows,  orphans  and  heirs  or  devisees  of  deceased  mem- 
bers" it  is  ultra  vires  for  it  to  contract  for  "endowment  in- 
surance" payable  to  a  member  on  his  arriving  at  a  certain 
age.'^^  But  a  rule  of  an  insurer  not  to  issue  policies  on  the 
property  of  minors  does  not  affect  the  validity  of  a  policy 
issued  to  a  minor  who  had  no  knowledge  of  the  rule;'^^  and 
it  is  liable  on  a  note  given  in  compromise  of  a  loss  even  though 
it  had  no  authority  to  insure  the  risk.'^^ 

Estoppel  of  Insurer  to  Plead  Ultra  Vires. 

The  best  rule  on  this  subject  is  that  a  contract  made  by  a 
corporation  beyond  the  scope  of  its  powers,  express  or  im- 
plied, cannot  be  enforced  or  rendered  enforcible  by  the  ap- 
plication of  the  doctrine  of  estoppel;  but  the  courts,  while 
refusing  to  maintain  an  action  on  the  contract,  will  strive  to 
do  justice  to  the  parties  by  permitting  money  parted  with  on 
the  faith  of  the  unlawful  contract  (if  the  contract  be  neither 
malum  prohibitum  or  malum  in  se)  to  be  recovered  back,  or 
compensation  to  be  made  for  it ;  in  other  words,  while  it  can- 
not be  enforced  as  a  contract,  the  one  repudiating  it  may  be 
compelled  to  account  for  whatever  consideration  he  may  have 
received  on  account  of  the  contract.'^^ 

"Rockhold  V.  Canton  Masonic  Mut.  Benev.  Soc,  129  111.  440,  2  L. 
R.  A.  420.  A  policy  on  the  life  of  a  person  more  than  sixty  years 
old,  issued  by  a  mutual  life  association  which  has  no  authority  to 
insure  the  life  of  a  person  over  sixty  years  old,  is  ultra  vires  and 
void.    King  v.  Gleason,  6  Kan.  App.  141,  51  Pac.  301. 

"  Johnson  v.  Scottish  Union  &  Nat.  Ins.  Co.,  93  Wis.  223,  67  N.  W. 
416. 

"  Farmers'  Mut.  Ins.  Co.  v.  Meese,  49  Neb.  861,  69  N.  W,  113. 

'^  Central  Transportation  Co.  v.  Pullman's  Palace  Car  Co.,  139 
U.  S.  24;  Luthe  v.  Farmers'  Mut.  Fire  Ins.  Co.,  55  Wis.  543,  13  N.  W. 
490;  Pullman's  Palace  Car  Co.  v.  Central  Transportation  Co.,  171 
U.  S.  128;   Twiss  v.  Guaranty  Life  Ass'n,  87  Iowa,  733,  55  N.  W.  8; 


§  28         CORPORATE    POWERS  —  ULTRA   VIRES    CONTRACTS.  43 

The  application  of  a  rule  of  law  is  ofttimes  more  difficult 
than  the  determination  of  the  rule  itself.     The  question  re- 
mains, what  insurance  contracts  are  so  clearly  ultra  vires 
as  to  be  governed  by  this  rule.     In  connexion  with  what  has 
been  said  about  the  limitations  of  the  powers  of  insurers  to 
accept  risks,  it  must  always  be  borne  in  mind  that  there  is 
a  clear  distinction  between  the  usurpation  of  a  power  which 
has  not  been  conferred  upon  and  is  therefore  denied  to  a  cor- 
poration and  therefore  is  clearly  ultra  vires,  and  irregulari- 
ties in  the  use  or  execution  of  a  power  which  is  possessed,  i.  e, 
the  difference  between  attempted  use  of  a  power  it  has  not, 
and  the  abuse  of  a  power  it  has.     The  first  is  ultra  vires; 
^  the  second  is  intra  vires.     To  illustrate — if  the  statute  under 
which  an  insurer  is  created  confers  upon  it  the  power  to  insure 
the  lives  of  persons  between  certain  ages,  or  forbids  it  to 
insure  the  lives  of  persons  under  or  over  specified  ages,  it 
will  not  be  competent  for  the  insurer  to  make  valid  insurance 
upon  any  life  in  violation  of  the  statute.     And  a  contract 
insuring  lives  under  or  over  the  specified  ages  would  be  ultra 
vires,  incapable  of  ratification,  and  beyond  the  reach  of  the 
doctrine  of  estoppel.     And  so  if  the  restriction  be  contained 
in  the  articles  of  incorporation  of  the  insurer,  for  they,  with 
the  statute,  constitute  its  organic  law.     But  where  the  limita- 
tion is  contained  only  in  the  by-laws  of  the  insurer,  an  in- 
surance contrary  to  their  provisions  is  not  strictly  speaking 
ultra  vires,  but  only  a  violation  of  one  of  the  rules  adopted 
by  the  insurer  for  the  exercise  of  its  general  powers,  and  these 
rules,  being  for  the  self-government  and  protection  of  the  in- 
surer, may  be  waived  by  it.     And  if  the  insurer  with  know- 
ledge that  an  insured  Avas  received  outside  of  the  age  limit 

Greenville  C.  &  W.  Co.  v.  Planters'  C.  &  W.  Co.,  70  Miss.  669;  State 
V.  Monitor  Fire  Ass'n,  42  Ohio  St.  555;  Taylor,  Priv.  Corp.  §  279; 
post,  "Reinsurance." 


44:  THE   PARTIES   TO   THE    CONTRACT.  §  28 

ilxed  bj  its  by-laws  but  witbin  tbe  limit  fixed  by  its  articles  of 
incorporation  still  retains  tbe  consideration,  and  makes  no 
offer  to  cancel  tbe  contract,  it  will  be  estopped  to  set  up  tbe 
matter  of  age  as  a  defense  to  a  suit  on  tbe  policy. '^^  Tbere 
are  some  cases  to  tbe  contrary ;  '^^  but  it  is  submitted  tbat  tbey 
are  eitber  based  upon  a  misconception  of  tbe  doctrines  of 
ultra  vires  and  estoppel  as  applied  to  tbe  insurance  business, 
or  are  tbe  results  of  an  inclination  to  overlook  tbe  funda- 
mental principles  of  law  wben  tbeir  application  would  work 
apparent  bardsbip  in  a  particular  case.  Tbat  tbis  motive 
influenced  tbe  decision  in  at  least  one  case,  is  practically  con- 
fessed in  tbe  opinion.'^^  It  will  be  observed  tbat  tbe  rule 
adopted  by  tbe  supreme  court  of  tbe  United  States,  and  wbich 
is  bere  advocated,  reserves  to  tbe  party  wbo  bas  parted  witb 
bis  money  or  property,  tbe  rigbt  to  relief  and  just  com- 
pensation in  a  proper  action. 

'"Morrison  v.  Wisconsin  Odd  Fellows'  Mut.  L.  Ins.  Co.,  59  Wis. 
162,  18  N.  W.  13;  Wiberg  v,  Minnesota  Scandinavian  Relief  Ass'n, 
73  Minn.  303;  Gray  v.  National  Ben.  Ass'n,  111  Ind.  531;  McCoy  v. 
Northwestern  Mut.  Relief  Ass'n,  92  Wis.  577,  66  N.  W.  697;  Alvord 
v.  Barker,  107  Iowa,  143,  77  N.  W.  868;  Corey  v.  Sherman,  96  Iowa, 
114,  22  L.  R.  A.  490;  State  v.  Manufacturers'  Mut.  Fire  Ass'n,  29 
Ohio  Law  J.  160.  24  L.  R.  A.  252. 

"Denver  Fire  Ins.  Co.  v.  McClelland,  9  Colo.  11;  Matt  v.  Roman 
Catholic  Mut.  Protective  Soc,  70  Iowa,  455. 

"  Seymour  v.  Chicago  Guaranty  Fund  Lif o  Soc,  54  Minn.  147.  In 
this  case  the  court  said:  "The  rule  may  not  be  strictly  logical,  but  it 
prevents  a  great  deal  of  injustice."  See,  also,  Webster  v.  Buffalo 
Ins.  Co.,  7  Fed.  399;  Post  v.  Aetna  Ins.  Co.,  43  Barb.  (N.  Y.)  351; 
Hartford  Fire  Ins.  Co.  v.  Wilcox,  57  111.  180;  Walker  v.  Metropolitan 
Ins.  Co.,  56  Me.  371;  Putnam  v.  Home  Ins.  Co.,  123  Mass.  324;  Love 
V.  Clune.  24  Colo.  227,  50  Pac.  34. 


CHAPTER  III. 

THE   CONTRACT— FORM. 

§  29.  Oral  Contract. 
30-33.  Making  and  Enforcement. 

34,  The  Binding  Slip. 

35.  Merger  of  Oral  Contract. 
36-39.  The  Policy. 

Oral  Contract. 

§  29.  In  the  absence  of  any  statutory  provision  to  the  con- 
trary, a  parol  contract  to  insure  is  valid. 

At  common  law  a  promise  for  a  valuable  consideration  to 
give  temporary  insurance  or  to  make  a  policy  of  insurance 
w  fuiuro  which  would  relate  back  to  the  date  of  agreement 
Avas  no  more  required  to  be  in  writing  than  a  promise  to  ex- 
ecute and  deliver  a  bond,  or  a  bill  of  exchange  or  a  promis- 
sory note.  In  the  earlier  decisions  in  the  United  States 
there  seems  to  have  been  some  doubt  and  contrariety  of  opin- 
ion ;  but  whatever  doubts  may  formerly  have  been  entertained 
as  to  the  validity  of  parol  contracts  of  insurance  made  by  in- 
surance corporations  authorized  by  their  charters  to  make 
insurance  by  issuing  policies,  it  is  now  settled  that  they  are 
valid.  It  is  equally  well  settled  that  parol  contracts  of  such 
companies  to  effect  an  insurance  by  issuing  policies  are  valid, 
and  will  be  enforced  by  compelling  specific  performance  by 
the  company,  or  in  an  action  for  the  breach  of  the  agreement; 
in  either  of  which  a  recovery  for  the  loss  of  the  property 
agreed  to  be  insured  may  be  awarded  the  plaintiff.^     To 

^  Ellis  V.  Albany  City  Fire  Ins.  Co..  50  N.  Y.  402;  Franklin  Fire 
Ins.  Co.  V.  Colt.  20  Wall.  (U.  S.)  560;  McCabe  v.  Aetna  Ins.  Co.,  9 
N.  D.  19,  81  N.  W.  427;  Newark  Machine  Co.  v.  Kenton  Ins.  Co.,  50 


46  THE    CONTRACT  —  FORM.  §  29 

make  a  binding  verbal  contract  for  insurance,  tbere  must  be 
a  meeting  of  minds  between  the  parties  npon  all  the  essentials, 
so  that  it  is  then  and  there  a  contract  complete  in  all  its  de- 
tails ;  or  if  the  delivery  of  a  policy  be  contemplated,  so  as  to 
leave  nothing  thereafter  to  be  done  but  to  execute  and  deliver 
it  according  to  the  oral  agreement.  There  must  be  an  ap- 
plication, though  not  necessarily  in  writing.  The  terms  and 
the  subject  matter,  the  premium,  the  amount  and  duration  of 
the  risk,  the  perils  or  contingency  to  be  insured  against  must 
all  be  determined.  If  the  application  be  made  to  an  agent 
representing  several  companies,  the  particular  company  or 
companies  to  carry  the  risk  must  be  designated,  with  the 
amount  each  is  to  carry,  and  each  must  by  its  agent,  or  other- 
wise, agree  to  assume  the  liability  upon  the  terms  and  con- 
ditions proposed  or  acceded  to  by  the  applicant.  Until  all 
this  is  done  there  can  be  no  binding  contract.  The  prepay- 
ment of  the  premium  is  not  necessary  if  it  be  understood  that 
credit  is  to  be  given,  but  a  promise  to  pay  is  essential.  The 
insurance  does  not  attach  until  the  contract  has  been  con- 
summated so  that,  if  the  consideration  has  not  been  paid,  the 
insurer  may  maintain  an  action  for  it.  As  in  other  cases  of 
oral  contracts,  the  terms  of  the  agreement  and  the  assent  of 
the  parties  to  them  may  be  inferred  from  their  acts  and  the 
attending  circumstances  as  well  as  by  the  words  they  have 

Ohio  St.  549.  22  L.  R.  A.  768;  Mathers  v.  Union  Mut.  Ace.  Ass'n,  78 
Wis.  588,  11  L.  R.  A.  83;  Michigan  Pipe  Co.  v.  Michigan  F.  &  M.  Ins. 
Co.,  92  Mich.  482,  20  L.  R.  A.  277;  Insurance  Co.  of  North  America 
V.  Bird,  175  111.  42,  51  N.  E.  686;  Sanford  v.  Orient  Ins.  Co.,  174  Mass. 
416,  49  Cent.  Law  J.  467;  Emery  v.  Boston  Marine  Ins.  Co.,  138  Mass, 
398;  Relief  Fire  Ins.  Co.  v.  Shaw,  94  U.  S.  574;  Sanborn  v.  Fireman's 
Ins.  Co.,  16  Gray  (Mass.),  448;  Putnam  v.  Home  Ins.  Co.,  123  Mass. 
324;  Hicks  v.  British  America  Assur.  Co.,  162  N.  Y.  284,  48  L.  R.  A. 
424;  Cleveland  Oil  Co.  v.  Norwich  Ins.  Soc.  34  Or.  228. 


§  29  ORAL    CONTRACT.  4? 

employed.^     This  is  true   of  mutual   as  well  as  of   stock 
companies.^ 

1.  Charter  Provisions. 

Provisions  in  the  charter  of  an  insurance  company  respect- 
ing the  execution  of  policies  should  be  considered  as  merely 
enabling  in  their  character,  and  not  as  restrictive  of  the  power 
to  make  contracts  in  any  suitable  and  convenient  mode  not 
specifically  prohibited.  It  has  been  held  that  a  charter  au- 
thorizing the  president  and  directors  of  a  company  to  make 
insurance  against  fire,  and  for  that  purpose  to  execute  such 
"contracts,  bargains,  agreements,  policies  and  other  instru- 
ments" as  may  be  necessary,  and  declaring  that  every  such 
contract,  bargain,  agreement  and  policy  shall  be  in  writing 

'Cases  supra.  And  see  Taylor  v.  Phoenix  Ins.  Co.,  47  Wis.  365, 
2  N.  W.  559,  3  N.  W.  584;  King  v.  Cox,  63  Ark.  204,  37  S.  W.  877; 
Sproul  V.  "Western  Assur.  Co.,  33  Or.  98,  54  Pac.  180;  Sater  v.  Henry 
County  Farmers'  Ins.  Co.,  92  Iowa,  579,  61  N.  W.  209;  Home  Ins.  Co. 
V.  Adler,  71  Ala.  516;  Haskin  v.  Agricultural  Fire  Ins.  Co.,  78  Va. 
700;  Equitable  Life  Assur.  Soc.  v.  McElroy,  49  U.  S.  App.  548,  83  Fed. 
631;  Angell  v.  Hartford  Fire  Ins.  Co.,  59  N.  Y.  171;  Sanborn  v.  Fire- 
man's Ins.  Co.,  16  Gray  (Mass.),  448;  Tyler  v.  New  Amsterdam  Fire 
Ins.  Co.,  4  Rob.  (N.  Y.)  151;  Emery  v.  Boston  Marine  Ins.  Co.,  138 
Mass.  398;  Milwaukee  Mechanics'  Ins.  Co.  v.  Graham,  181  111.  158. 
In  Fames  v.  Home  Ins.  Co.,  94  U.  S.  629,  it  is  said:  "It  is  sufficient  if 
one  party  proposes  to  be  insured,  and  the  other  party  agrees  to  in- 
sure, and  the  subject,  the  period,  the  amount,  and  the  rate  of  insur- 
ance is  ascertained  or  understood,  and  the  premium  paid  if  de- 
manded. It  will  be  presumed  that  they  contemplate  such  form  of 
policy  containing  such  conditions  and  limitations  as  are  usual  in 
such  cases,  or  have  been  used  before  between  the  parties."  Western 
Assur.  Co.  V.  McAlpin,  23  Ind.  App.  220,  55  N.  E.  119;  Firemen's  Ins. 
Co.  V.  Kuessner,  164  111.  275;  Fidelity  &  C.  Co.  v.  Ballard  &  B.  Co. 
(Ky.),  48  S.  W.  1074;  Cooke  v.  Aetna  Ins,  Co.,  7  Daly  (N.  Y.),  555. 
When  risk  begins,  see  post,  note  56. 

=  Commercial  Mut.  M.  Ins.  Co.  v.  Union  Mut.  Ins.  Co.,  19  How. 
(U.  S.)  318;  Van  Loan  v.  Farmers'  Mut.  F.  Ins.  Ass'n,  90  N.  Y.  280; 
Emery  v.  Boston  Marine  Ins.  Co.,  138  Mass.  398;  Davidson  v.  Old 
People's  Mut.  Ben.  Soc,  39  Minn.  303. 


48  THE    CONTEACT  —  FOEM.  §  2{> 

or  in  print  and  under  tlie  seal  of  tlie  corporation,  and  properly 
signed  and  attested,  restricts  tlie  power  of  the  company  to 
make  a  valid  and  binding  contract  of  insurance  in  any  other 
manner.*  But  such  provisions  refer  only  to  executed  con- 
tracts or  policies  of  insurance,  and  do  not  interfere  with  the 
right  of  an  authorized  agent  to  make  agreements  and  parol 
promises  for  the  issuance  of  a  policy,  and  as  to  tlie  terms  on 
which  a  policy  should  be  issued,^©  that  a  court  would  compel 
the  company  to  execute  the  contract  specifically,  or  where  a 
loss  has  occurred  enter  a  decree  directly  for  the  amount  of  the 
insurance  recoverable  under  the  policy  which  the  insurer 
ought  to  have  executed.  Unless  prohibited  by  statute  or 
other  positive  regulation  there  is  no  authority  in  courts  to  Re- 
fuse to  enforce  any  lawful  agreement  which  parties  have 
made,  if  sufficiently  proved  by  oral  testimony.  The  law  dis- 
tinguishes between  the  preliminary  contract  to  make  insur- 
ance or  issue  a  policy,  and  the  executed  contract  or  policy.^ 

*  Constant  v.  Allegheny  Ins.  Co.,  3  Wall.  Jr.  316,  Fed.  Cas.  No. 
3,136;  Lindauer  v.  Delaware  Mut.  S.  Ins.  Co.,  13  Ark.  461. 

"New  England  F.  &  M.  Ins.  Co.  v.  Robinson,  25  Ind.  536;  Roger 
Williams  Ins.  Co.  v.  Carrington,  43  Mich.  252;  Firemen's  Ins.  Co.  v. 
Kuessner,  164  111.  275;  Dayton  Ins.  Co.  v.  Kelly,  24  Ohio  St.  345;  Re- 
lief Ins.  Co.  V.  Shaw,  94  U.  S.  574;  Franklin  Fire  Ins.  Co.  v.  Taylor, 
52  Miss.  441;  London  Life  Ins.  Co.  v.  Wright,  5  Can.  Sup.  Ct.  466; 
Security  F.  Ins.  Co.  v.  Kentucky  M.  &  F.  Ins.  Co.,  7  Bush  (Ky.),  81; 
Baile  v.  St.  Joseph  F,  &  M.  Ins.  Co.,  73  Mo.  371.  Compare  Henning 
V.  United  States  Ins.  Co.,  47  Mo.  425. 

A  by-law  of  a  company  which  provides  that,  "in  case  of  the  absence, 
inability  or  death  of  the  president,  policies  and  other  papers  shall  be 
signed  by  two  directors,"  relates  only  to  the  formal  execution  of  pa- 
pers which  require  signing,  and  does  not  exclude  the  making  of  oral 
contracts  of  insurance  by  any  officer  who  may  have  authority,  or  be 
held  out  as  having  authority,  to  make  such  contracts.  Emery  v. 
Boston  Marine  Ins.  Co.,  138  Mass.  398;  Sanborn  v.  Fireman's  Ins.  Co., 
16  Gray  (Mass.),  454;  Commercial  Mut.  M.  Ins.  Co.  v.  Union  Mut. 
Ins.  Co.,  19  How.  (U.  S.)  321;  Franklin  Fire  Ins.  Co.  v.  Colt,  20  Wall. 
(U.  S.)  560;  Eames  v.  Home  Ins.  Co.,  94  U.  S.  621;  Walker  T.  Metro- 


§  29  OEAL    CO^'TKACT.  49 

2.  Statutory  Provisions. 

It  is  fundamental  that  the  courts  of  a  state  will  not  en- 
force any  contract  made  in  direct  violation  of  the  laws  of  that 
state  and  that  a  party  cannot  enforce  in  any  court  a  contract 
positively  forbidden  by  the  lex  loci  contractu.  So  where  the 
statute  of  a  state  provides  that  a  contract  of  insurance  must 
be  in  writing,  a  parol  contract  is  not  binding  nor  of  any  effect 
whatsoever ;  ^  and  any  alterations  of  a  policy  must  be  in  writ- 
ing;''' and  a  parol  agreement  for  renewal  is  void.^  Such 
statutes  in  their  application  to  insurance  contracts  are  anal- 
ogous in  their  operation  to  the  operation  of  the  statute  of 
frauds  in  its  relation  to  other  contracts.  Delivery  is  not 
necessary,  if  in  other  respects  the  contract  is  consummated. 
If  an  informal  written  contract  be  relied  upon  it  must  be 
shown  to  contain  all  the  essentials  of  the  written  contract  and 
be  definite  and  certain  respecting  them.®  But  such  statutes 
being  in  derogation  of  the  common  law  which  concedes  to 
every  one  the  right  to  make  such  contracts  without  the  for- 

politan  Ins.  Co.,  56  Me.  371;  City  of  Davenport  v.  Peoria  M.  &  F.  Ins. 
Co.,  17  Iowa,  276. 

"Roberts  v.  Germania  Fire  Ins.  Co.,  71  Ga.  478;  Simonton  v.  Liver- 
pool, L.  &  G.  Ins.  Co.,  51  Ga.  76;  Clark  v.  Brand,  62  Ga.  23;  Henning 
V.  United  States  Ins.  Co.,  47  Mo.  425.  Compare  Baile  v.  St.  Joseph 
F.  &  M.  Ins.  Co.,  73  Mo.  371.  Stamp  laws  do  not  affect  the  validity  of 
oral  contracts.  At  most,  they  throw  doubt  upon  the  admissibility  in 
evidence  of  written  contracts  not  properly  stamped.  And-  state 
courts  are  not  within  the  provisions  of  the  Federal  statute  for  rais- 
ing revenue  to  meet  war  expenditures,  that  no  instrument  not 
stamped  according  to  the  requirements  of  that  statute  shall  be  re- 
ceived in  evidence  in  any  court.  Carpenter  v.  Snelling,  97  Mass.  452; 
Green  v.  Holway,  101  Mass.  243;  Cooley,  Const.  Lim.  (6th  Ed.)  592; 
Wingert  v.  Zeigler.  91  Md.  318,  51  L.  R.  A.  316;  Knox  v.  Rossi 
(Nev.),  48  L.  R.  A.  305,  notes,  57  Pac.  179,  and  notes  in  46  L.  R.  A. 
454, 

'  Simonton  v.  Liverpool,  L.  &  G.  Ins.  Co.,  51  Ga.  76. 

'  Roberts  v.  Germania  Fire  Ins.  Co.,  71  Ga.  478. 

•  Clark  V.  Brand.  62  Ga.  23. 

KERR,  INS.— 4 


50  THE    CONTEACT FORM.  §  30 

mality  of  the  evidence  of  a  writing,  are  strictly  construed 
and  their  scope  will  not  be  enlarged  by  imj^lication  or  intend- 
ment. Thus  a  statute  which  requires  the  conditions  of  in- 
surance to  be  stated  in  the  body  of  the  policy  and  forbids  the 
consideration  of  the  application  of  the  insured  or  the  by-laws 
of  the  company  as  a  part  of  the  contract  unless  incorporated 
in  full  into  the  policy,  is  held  to  be  for  the  benefit  and  pro- 
tection of  the  insured,  to  apply  only  to  written  contracts  of 
insurance,  and  not  to  prohibit  or  in  any  way  affect  oral  insur- 
ances.^'' A  general  statute  requiring  insurance  contracts  to 
be  in  writing  is  to  be  construed  in  connection  with  and  is 
modified  by  a  provision  in  another  statute  relating  to  corpora- 
tions as  a  class,  and  giving  to  them  the  right  to  make  oral  con- 
tracts.-^-^  The  fact  that  the  legislature  of  a  state  has  pre- 
scribed a  standard  policy  to  which  all  written  contracts  of  in- 
surance must  conform,  does  not  restrict  the  right  of  an  insurer 
to  agree  to  issue  a  policy  and  to  orally  insure  property  against 
damage  by  fire  until  such  policy  shall  be  executed  and  de- 
livered ;  but  the  parties  will  be  conclusively  presumed  to  have 
contemplated  the  form  of  policy  required  by  law,  and  the 
terms  and  conditions  of  such  a  policy  will  be  applicable  in  case 
of  fire  and  damage  to  the  property  insured  before  delivery  of 
the  policy.-'^ 

Same  —  Making  and  Enforcement, 

§  30.  Any  insurance  agent  authorized  to  solicit  insurance, 
fix  rates,  execute  and  deliver  policies  and  collect  preniium.s 

"Relief  Fire  Ins.  Co.  v.  Shaw,  94  U.  S.  574;  Commercial  Mut.  M. 
Ins.  Co.  V.  Union  Mut.  Ins.  Co.,  19  How.  (U.  S.)  318;  Franklin  Fire 
Ins.  Co.  V.  Colt.  20  Wall.  (U.  S.)   560. 

"Baile  v.  St.  Joseph  F.  &  M.  Ins.  Co.,  73  Mo.  371.  distinguishing 
Henning  v.  United  States  Ins.  Co.,  47  Mo.  425,  where  the  statute  last 
referred  to  was  overlooked. 

"  Hicks  V.  British  American  Assur.  Co..  162  N.  Y.  284,  48  L.  R.  A. 
424.    See  Arrott  v.  Walker,  118  Pa.  St.  249. 


I 


§§  31-33  MAKING  AND  ENFORCEMENT.  61 

has  power  to  make  an  oral  contract  for  temporary  new  insur- 
ance and  for  a  renewal  of  existing  contracts. 

§31.  The  contracting  parties  are  presumed  to  contemplate 
the  issuance  of  a  policy  with  usual  and  customary  conditions 
and  stipulations. 

§  32.  An  oral  contract  to  issue  a  policy  will  be  enforced  in 
equity. 

§  33.  An  agent  who  fails  to  insure  or  procure  insurance  ac- 
cording to  his  contract  is  liable  to  the  promisee  for  all  damages 
resulting  through  his  breach  of  contract.  In  so  far  as  he  con- 
tracted to  and  had  power  to  bind  his  principal,  the  latter  is 
also  bound  to  make  good  such  damages. 

What  Agents  can  Make  Oral  Contracts  of  Insurance. 

In  order  that  an  oral  contract  to  protect  the  insured  between 
the  taking  of  the  risk  and  the  issuance  of  the  policy  be  binding, 
it  must  be  clearly  established  that  it  was  made  and  that  the 
agent  who  made  it  had  power  to  bind  the  company  insuring. 
If  an  agent  is  empowered  to  represent  a  fire  insurance  com- 
pan.y  to  solicit  insurance,  to  receive  premiums  and  to  issue 
and  deliver  policies  all  on  its  behalf,  then  he  will,  in  favor  of 
third  persons  dealing  with  him  in  good  faith,  have  authority 
to  bind  that  insurer  by  parol  contracts  for  insurance  as  well 
as  by  the  execution  and  delivery  of  policies ;  and  if  there  be 
any  restriction  on  his  power  in  this  respect,  it  will  only  affect 
those  to  whom  notice  of  such  restriction  has  been  legally 
brought  or  given.^^  It  is  within  the  power  of  such  an  agent 
to  orally  agree  that  existing  insurance  shall  be  kept  alive,  and 
lliat  policies  about  to  expire  shall  be  renewed  even  without 
prepayment  of  the  premiums. ^^     Such  power  is  not  vested  in 

"Post,  c.  8,  "Agents;"  Parsons  v.  Queen  Ins.  Co.,  29  Up.  Can. 
C.  P.  188;  Angell  v.  Hartford  Fire  Ins.  Co.,  59  N.  Y.  171;  Patter- 
son V.  Benjamin  Franltlin  Ins.  Co.,  *81  Pa.  St.  454;  Commer- 
cial Mut.  M.  Ins.  Co.  V.  Union  Mut.  Ins.  Co.,  19  How.  (U.  S.)  318. 
This  rule  embraces  statutory  agencies.  Mathers  v.  Union  Mut.  Ace. 
Ass'n,  78  Wis.  588,  11  L.  R.  A.  83. 

I'-Van  Loan  v.  Farmers'  Mut.  Fire  Ins.  Ass'n,  90  N.  Y.  280;  McCabe 


52  THE   OKAL   CONTRACT.  §  33 

a  soliciting  agent  authorized  only  to  receive  applications 
which  he  would  forward  to  the  company  for  its  approval  or 
rejection. ^^  One  dealing  with  an  agent  will  not  be  heard 
to  assert  in  him  power  beyond  the  known  limitations  of  hi& 
authority.  ^^  The  burden  is  on  the  party  attempting  to  estab- 
lish such  a  contract  to  establish  it  in  all  its  necessary  details 
by  a  preponderance  of  evidence.  ^'^ 

Not  Within  Statute  of  Frauds. 

Such  a  contract  is  not  within  the  statute  of  frauds  when  the 
insurance  is  to  commence  within  the  year,  since  the  agree- 
ment depends  on  a  contingency  that  may  happen  within  that 
time,  and  may  by  its  terms  be  fully  performed  and  ended  be- 
fore the  expiration  of  that  time.^^ 

Proof  of  Contract. 

While  an  oral  contract  of  insuiJance  may  be  made  and  is 
enforcible,  yet  it  will  be  presumed,  from  the  custom  of-iu- 

V.  Aetna  Ins.  Co.,  9  N.  D.  19,  81  N.  "W.  426;  Cohen  v.  Continental 
Fire  Ins.  Co.,  67  Tex.  325,  3  S.  W.  296.  Tliis  is  held  even  though  the 
agent  be  not  specially  authorized  to  bind  his  company  by  a  parol 
agreement  for  renewal,  McCabe  v.  Aetna  Ins.  Co.,  supra;  or  if  he  b'3 
only  a  statutory  agent,  McCabe  v.  Aetna  Ins.  Co.,  supra;  Mathers  v. 
Union  Mut.  Ace.  Ass'n,  78  Wis.  588,  11  L.  R.  A.  83;  or  although  it  be 
stipulated  on  the  face  of  the  existing  policy  that  it  shall  not  be  re- 
newed in  that  manner.  Cases  supra;  Cohen  v.  Continental  Ins.  Co., 
supra;  Knickerbocker  Life  Ins.  Co.  v.  Norton,  96  U.  S.  234;  Chicago 
Life  Ins.  Co.  v.  Warner,  80  111.  410;  Helme  v.  Philadelphia  Life  Ins. 
Co.,  61  Pa.  St.  107;  Bowman  v.  Agricultural  Ins.  Co.,  59  N.  Y.  521; 
Westchester  Fire  Ins.  Co.  v.  Earle,  33  Mich.  143;  Trustees  of  First 
Baptist  Church  v.  Brooklyn  Fire  Ins.  Co.,  19  N.  Y.  305;  King  v. 
Hekla  Fire  Ins.  Co..  58  Wis.  508,  17  N.  W.  297. 

"Morse  v.  St.  Paul  F.  &  M.  Ins.  Co.,  21  Minn,  407.  See  Fidelity 
&  C.  Co.  V.  Ballard  &  B.  Co.  (Ky.),  48  S.  W.  1074. 

"  More  V.  N.  Y.  Bowery  F.  Ins.  Co.,  130  N.  Y.  537. 

"McCabe  v.  Aetna  Ins.  Co.,  9  N.  D.  19,  81  N.  W.  426;  Dinning  v. 
Phcenix  Ins.  Co..  68  111.  414. 

"Commercial  Fire  Ins.  Co.  v.  Morris,  105  Ala.  298;  King  v.  Cox,. 


§  33  MAKING    AND    ENFORCEMENT.  63 

surance  companies  to  contract  by  written  policies,  tliat  nego- 
tiations were  not  intended  to  be  final,  and  that  there  was  no 
intention  to  complete  the  contract  until  the  delivery  of  the 
policy.  The  proof  that  an  oral  contract  of  insurance  was 
made  must  be  full  and  clear.  Not  only  must  it  appear  that 
all  the  essentials,  terms,  conditions  and  stipulations  were 
agreed  upon,  but  it  must  be  shown  that  it  was  the  understand- 
ing and  intention  of  the  parties  that  there  should  be  an  oral 
contract  which  would  for  a  specified,  or  reasonable  time,  or 
until  the  issuance  of  a  policy,  protect  the  insured,  and  this  in- 
tent and  understanding  must  be  plainly  inferable  from  the 
negotiations  and  surrounding  circumstances.-'^  The  prom- 
ise by  an  agent  of  several  insurance  companies,  upon  the  re- 
ceipt of  a  premium,  to  issue  a  policy  of  insurance  at  a  future 
day,  and  his  statement  that  the  property  would  be  insured 
in  the  meantime,  do  not  constitute  an  oral  contract  of  insur- 
^ance  binding  upon  an  insurer  who  afterwards  assumes  the 
risk,  but  are  at  most  an  oral  contract  of  the  agent  on  his  own 
behalf.^"  If  the  evidence  shows  that  the  only  form  of  con- 
tract contemplated  by  the  parties  was  -by  a  policy  issued  upon 
a  written  application,  and  there  is  no  evidence  of  any  inten- 

63  Ark.  204,  37  S.  W.  877;  Wiebeler  v.  Milwaukee  Mechanics'  Mut. 
Ins.  Co.,  30  Minn.  464;  Phoenix  Ins.  Co.  v,  Spiere,  87  Ky.  286;  John 
R.  Davis  Lumber  Co.  v.  Scottish  U.  &  N.  Ins.  Co.,  94  Wis.  472,  69 
N.  W.  156. 

"•  Equitable  Life  Assur.  Soc.  v.  McElroy,  49  U.  S,  App.  548,  83  Fed. 
631;  De  Grove  v.  Metropolitan  Ins.  Co.,  61  N,  Y.  594;  Delaware  State 
F.  &  M.  Ins.  Co.  v.  Shaw,  54  Md.  546;  Merchants'  Mut.  Ins.  Co.  v. 
Lyman,  15  Wall.  (U.  S.)  664;  Myers  v.  Liverpool  &  L.  &  G.  Ins.  Co., 
121  Mass.  338;  Heiman  v.  Phoenix  Mut.  Life  Ins.  Co.,  17  Minn,  153 
(Gil.  127);  Sandford  v.  Trust  Fire  Ins.  Co.,  11  Paige  (N.  Y.),  547; 
Wainer  v.  Milford  Mut.  Fire  Ins.  Co.,  153  Mass.  335,  11  L.  R.  A.  598; 
Haskin  v.  Agricultural  Fire  Ins.  Co.,  78  Va.  700. 

="'Kleis  V.  Niagara  Fire  Ins.  Co.,  117  Mich.  469,  76  N.  W.  155;  Mich- 
igan Pipe  Co.  V.  Michigan  F.  &  M.  Ins.  Co.,  92  Mich.  482,  20  L.  R.  A. 
277. 


54  THE    OKAL    CONTRACT.  §  33. 

tion  to  make  a  contract  in  any  other  form,  there  can  be  no 
recovery  upon  the  negotiations  as  an  oral  contract.  ^^  An 
oral  contract  of  insurance  does  not  arise  from  negotiations  be- 
tween an  applicant  for  insurance  and  an  agent,  where  the 
applicant  subsequently  signs  an  application  in  which  he 
agrees  that  the  basis  of  the  contract  between  him  and  the 
company  should  be  the  application  and  the  premium  paid  by 
him,  that  the  application  should  not  be  binding  on  the  com- 
pany and  that  the  policy  should  not  be  in  force  until  actually 
issued.  ^^ 

The  Conditions  of  an  Oral  Contract. 

Upon  an  oral  contract  of  insurance,  where  nothing  is  said 
about  conditions,  if  a  policy  is  to  be  issued,  the  parties  are 
presumed  to  intend  that  it  shall  contain  the  conditions  usually 
inserted  in  policies  of  insurance  in  like  cases.  And  these 
same  conditions  will  govern  the  rights  of  the  parties  if  no 
policy  be  issued,  as  where  a  fire  occurs  immediately  and  be- 
fore a  policy  could  have  been  executed.  The  question  is  one 
of  intent  to  be  inferred  from  the  circumstances  surroundinc: 
the  negotiations  and  the  relations  and  previous  dealings  of 
the  parties  construed  in  the  light  of  those  negotiations.  Thus 
proof  of  former  insurance  which  has  expired,  or  which  it  is 
intended  to  renew  or  replace,  is  proper,  for  the  former  insur- 
ance might  form  in  part  the  basis  of  the  negotiations  which 
might  seem  to  include  without  specific  mention  some  of  the 
essentials  of  the  new  contract.  And  in  connexion  with  these, 
it  is  proper  to  receive  evidence  of  the  "understanding"  of  the 

=^  Markey  v.  Mutual  Ben.  Life  Ins.  Co.,  118  Mass.  178. 

"Fowler  v.  Preferred  Ace.  Ins.  Co.,  100  Ga.  330,  27  Ins.  Law  J. 
168,  28  S.  E.  398;  Easley  y.  New  Zealand  Ins.  Co.  (Idaho),  27  Ins. 
Law  J.  289. 


g  33  MAKING    AND    ENFORCEMENT.  55 

parties  as  to  whether  the  contract  was  completed,  and  as  to  its 
terms.  ^"^ 

A  parol  contract  by  a  duly  authorized  agent  to  insure  a 
dwelling-house  in  a  certain  sum,  takes  effect  immediately  al- 
though no  time  is  mentioned. ^^  And  if  it  be  understood  by 
the  parties  that  it  shall  continue  in  force  for  an  indefinite 
period  until  there  shall  be  some  further  communication  be- 
tween the  parties  regarding  a  written  policy,  it  will  continue 
in  force  in  the  absence  of  a  notice  by  either  to  the  other,  even 
after  lapse  of  the  time  reasonably  necessary  for  the  ascertain- 
ment of  the  facts  required  for  the  determination  of  the  matter 
as  to  the  written  policy. ^^  An  oral  agreement  by  an  insur- 
ance agent  upon  application  for  insurance  that  in  considera- 
tion of  the  necessary  delay  in  procuring  the  I>olicy,  the  in- 
surance shall  begin  from  the  date  of  the  application,  is  a 
valid  contract  upon  which  a  recovery  may  be  had  in  case  of 
loss  before  the  issuance  of  the  policy,  and  is  not  a  mere  agree- 
ment for  a  contract ;  ^^  and  an  agreement  that  the  agent  fix  the 
amount  of  indemnity  as  he  sees  fit  and  proper,  is  binding 
upon  the  company  where  he  does  in  fact  fix  it  as  sho^^^l  by  a 
memorandum  made  by  liim,  and  the  fact  that  the  assured  un- 
derstood that  the  term  of  insurance  was  one  year  while  the 

'^Ganser  v.  Fireman's  Fund  Ins.  Co.,  38  Minn.  74;  Home  Ins.  Co. 
V.  Adler,  71  Ala.  516;  Lipman  v.  Niagara  Fire  Ins.  Co.,  121  N.  Y.  454, 
8  L.  R.  A.  719;  Fames  v.  Home  Ins.  Co.,  94  U.  S.  629;  Karelsen  v. 
Sun  Fire  Office,  122  N.  Y.  545;  Newark  Machine  Co.  v.  Kenton  Ins. 
Co.,  50  Ohio  St.  549,  22  L.  R.  A.  768;  Salisbury  v.  Hekla  Fire  Ins. 
Co.,  32  Minn.  460;  Stehlich  v.  Milwaukee  Mechanics'  Ins.  Co.,  58 
N.  W.  379,  87  Wis.  322.  So  in  a  mutual  company,  Van  Loan  v.  Farm- 
ers' Mut.  F.  Ins.  Ass'n,  90  N.  Y.  280.  The  conditions  of  an  ordinary 
policy  are  not  available  to  an  insurer  in  an  action  for  breach  of  con- 
tract when  it  denies  the  making  of  the  contract.  Post,  note  40. 

"  Potter  V.  Phoenix  Ins.  Co.,  63  Fed.  382. 

"  Baker  v.  Commercial  Union  Assur.  Co.,  162  Mass.  358. 

=»  Hardwick  v.  State  Ins.  Co.,  20  Or.  547. 


56  THE    OEAL    CONTKACT.  §  33 

agent  understood  it  to  be  three  years,  does  not  render  the 
contract  incomplete  so  as  to  prevent  a  recovery  for  loss  oc- 
curring within  the  first  year  where  the  premium  is  to  he  the 
same  in  either  case.^'^  The  rights  of  one  whose  property  is 
destroyed  after  an  oral  contract  to  insure  it  hut  before  a  pol- 
icy therefor  is  issued,  are  subject  to  the  provisions  of  the 
standard  policy  prescribed  by  the  law,  and  he  can  recover  only 
by  compliance  with  the  conditions  required  by  such  a  standard 
policy  including  that  as  to  furnishing  proofs  within  a  speci- 
fied time.^^  When  a  written  contract  is  executed  it  super- 
sedes all  oral  agreements  previously  had  and  made  concern- 
ing matters  governed  by  the  written  contract.  ^^ 

Specific  Performance  of  an  Oral  Agreement  to  Issue  a  Policy. 

It  is  well  established  law  that  upon  proper  proof  that  an 
oral  contract  has  been  made  to  do  something,  the  consumma- 
tion of  which  involves  the  execution  of  a  written  instrument 
which  is  afterwards  refused  to  be  made,  a  court  of  equity  will 
compel  the  execution  of  the  written  contract  which  was  agreed 
upon.  But  in  any  such  case  the  proof  must  be  clear,  satisfac- 
tory and  convincing.  The  burden  rests  upon  the  one  assert- 
ing the  right  to  the  written  contract  to  establish  his  claim, 
and  to  show  that  an  agreement  to  execute  the  written  contract 
was  in  fact  entered  into  and  that  nothing  essential  to  a  com- 
plete agreement  was  left  open  to  future  determination.  This 
agreement  must  be  mutual  and  bilateral,  capable  of  enforce- 

"  Craft  V.  Hanover  Fire  Ins.  Co.,  40  W.  Va.  508,  21  S.  E.  854, 
=«  Hicks  v.  British  American  Assur.  Co.,  162  N.  Y.  284,  48  L.  R.  A. 
424;  post,  c.  13.  "Notice  and  Proofs  of  Loss." 

^  Union  Mut.  Life  Ins.  Co.  v.  Mowry,  96  U.  S.  544;  Merchants'  Mut. 
Ins.  Co.  V.  Lyman,  15  Wall.  (U.  S.)  664;  Thompson  v.  Knickerbocker 
Life  Ins.  Co.,  104  U.  S.  252;  Nebraska  &  I.  Ins.  Co.  v.  Seivers,  27  Neb. 
541,  43  N.  W.  351;  Fowler  v.  Metropolitan  Life  Ins.  Co..  116  N.  Y. 
389;  Smith  v.  National  Life  Ins.  Co.,  103  Pa.  St.  177;  Kleis  v.  Ni- 
agara Fire  Ins.  Co.,  117  Mich.  469.  76  N.  W.  155;  post,  §  35. 


§  33  MAKING    AND    ENFORCEMENT. 


57 


ment  by  either  party,  and  so  clear  and  specific  in  all  material 
terms  and  details  as  to  leave  no  reasonable  doubt  as  to  its 
meaning.  These  requirements  being  fulfilled  a  court  of 
equity  will  coerce  the  execution  of  the  written  contract  to 
which  a  suitor  shows  himself  entitled.  So  a  bill  for  the  spe- 
cific performance  of  an  oral  contract  to  issue  a  policy  can 
be  maintained;  and  a  cause  of  action  in  equity  for  specific 
performance  of  a  contract  to  issue  a  policy  may  be  joined  with 
a  cause  of  action  upon  the  agreement  to  insure  and  the  policy 
as  decreed' by  the  court  where  a  loss  occurs  before  the  issuance 
<of  the  policy.^^ 

To  entitle  one  to  the  specific  performance  of  a  verbal  agree- 
ment to  insure  or  to  issue  a  policy,  he  must  prove  an  oral  con- 
tract possessing  all  the  essentials  of  a  written  contract  of 
insurance,  viz. — the  subject  matter,  the  risk  insured  against, 
the  amount  of  insurance,  the  rate  of  premium,  the  duration  of 
the  risks  and  the  identity  of  the  parties.  The  terms  of  the 
agreement  and  the  understanding  and  intent  of  the  parties 
may  be  inferred  from  the  relations  of  the  parties  to  each 
other,  their  previous  business  dealings,  and  all  facts  and  cir- 
cumstances attending  the  transaction.  Where  nothing  is 
stipulated  as  to  the  terms  or  nature  of  the  policy  to  be  issued, 
the  parties  will  be  presumed  to  have  contemplated  the  policy 
ordinarily  issued  by  the  insurer  to  cover  such  risks  as  the  one 
in  question.     If  no  premium  is  agreed  upon  the  ordinary  rate 

^  Idaho  Forwarding;  Co.  v.  Fireman's  Fund  Ins.  Co.,  8  Utah,  41, 
17  L.  R.  A.  586;  Hebert  v.  Mutual  Life  Ins.  Co.,  8  Sawy.  198,  12  Fed. 
807;  Preferred  Ace.  Ins.  Co.  v.  Stone,  61  Kan.  48,  58  Pac.  986;  Din- 
ning V.  Phoenix  Ins.  Co.,  68  111.  414;  Gerrish  v.  German  Ins.  Co.,  55 
N.  H.  355;  Commercial  Mut.  M.  Ins,  Co.  v.  Union  Mut.  Ins.  Co.,  Id 
How.  (U.  S.)  318;  Phcenix  Ins.  Co.  v.  Ryland.  69  Md.  437,  16  Atl.  109, 
1  L.  R.  A.  548;  Campbell  v.  American  Fire  Ins.  Co.,  73  Wis.  100,  40 
N.  W.  661. 


58  THE   ORAL   CONTRACT.  §  33 

will  govern.^  ^  If  the  legislature  lias  prescribed  a  form  of 
policy  to  be  issued,  that  will  be  the  policy  to  which  the  in- 
sured is  entitled,  and  his  rights  are  subject  to  all  its  terms- 
and  conditions  whether  a  lops  occur  before  or  after  the  policy 
be  delivered.^ ^  When  the  agent  represents  several  insurance- 
companies,  the  companies  assuming  the  risks  must  be  desig- 
nated in  some  way,  and  the  amount  each  is  to  carry.^^  The 
right  of  one  to  recover  here  depends  upon  the  existence  of 
insurance.  There  is  another  right  arising  from  an  unexe- 
cuted contract  to  insure,  which  will  next  be  discussed. 

Damages  for  Failure  to  Execute  Agreement  to  Insure  or  Pro- 
cure Insurance. 

There  is  this  difference  between  a  contract  of  insurance  in 
praesenti  and  a  contract  to  hereafter  insure,  or  procure  in- 
surance, viz. :  the  one  is  a  completed  contract  of  insurance^ 
while  the  other  is  an  unexecuted  agreement  to  make  a  complete- 
contract  in  futuro.  In  other  words,  as  related  to  a  loss  and 
fire  insurance  in  the  present  connexion,  the  first  would  be  the 
basis  of  a  claim  for  insurance  on  account  of  the  loss;  the 
second  would  be  the  basis  for  a  claim  that  insurance  had  been 
promised  but  not  furnished,  thereby  causing  the  property 
owner  to  lose  the  benefit  of  insurance  for  which  he  had  con- 
tracted. An  agreement  to  make  a  contract  at  a  future  day 
is  not  the  equivalent  of  the  one  to  be  made,  or  of  a  present 
contract,  though  all  the  terms  to  be  put  in  the  latter  are- 
agreed  upon.  If  one  of  the  parties  to  the  first  agreement 
refuses  to  bind  himself  when  the  time  comes,  the  court  may^ 
as  we  have  just  seen,  compel  a  specific  performance  of  it 

"^Ante,  notes  1,  2;  Home  Ins.  Co.  v.  Adler,  71  Ala.  516,  77  Ala. 
242. 

^'  Hicks  V.  British  American  Assur.  Co.,  162  N.  Y.  284,  48  L.  R.  A, 
424. 

*-"  Notes  supra. 


§  33  MAKING    AND    ENFORCEMENT,  59 

if  from  the  facts  proven  it  would  be  equitable  to  do  so ;  and 
if  performance  be  decreed,  a  judgment  may  be  entered  in  the 
same  case  for  the  amount  found  to  be  due  the  plaintiff  on 
the  contract,  if  any  amount  be  then  due  him  by  its  terms ;  or 
an  action  may  be  instituted  on  it  if  either  party  refuses  to 
comply  Avitli  it.  But  in  an  action  upon  a  contract  in  prae- 
senti  the  plaintiff  must  allege  and  prove  a  contract  definite 
and  completed  upon  the  given  date,  for  that  is  the  very  gist  of 
his  claim.  Thus  if  A,  being  the  authorized  agent  of  an  in- 
surance company,  agreed  upon  June  1st,  1900,  to  insure  B 
for  one  year  from  and  after  that  date  against  loss  through  fire, 
by  a  contract  in  praesenti,  the  insurer  would  be  liable  for  a 
loss  occurring  upon  June  2nd.  And  this  would  be  so  whether 
or  not  a  policy  were  delivered  before  the  fire.  But  if  A  only 
agreed  to  procure  insurance  for  B,  or  to  insure  him  as  soon 
as  he  could  execute  and  deliver  a  policy,  the  agreement  would 
be  promissory,  and  no  insurance  would  be  effected  until  the 
insurance  had  been  procured  and  a  policy  executed.  And 
so  if  in  the  first  case  A  were  the  agent  of  several  insurers,  the 
contract  would  not  be  completed  until  the  company  assuming 
the  risk  had  been  selected.^ ^ 

Whether  or  not  certain  negotiations  constitute  a  completed 
contract  of  insurance,  or  an  agreement  to  insure  in  the  future, 
or  either,  must  be  determined  by  the  application  of  well 
known  principles  of  the  general  law  governing  the  making  of 
contracts,  '  If  these  negotiations  constitute  a  contract  the  in- 
sured is  thereby  protected  according  to  the  terms  of  the  con- 
tract ;  if  they  constitute  only  an  agreement  to  procure  insur- 
ance, or  to  insure  in  the  future,  and  this  agreement  is  not 

^*  John  R.  Davis  Lumber  Co.  v,  Scottish  U.  &  N.  Ins.  Co.,  94  Wis. 
472,  69  N.  W.  156;  Ellis  v.  Albany  City  Fire  Ins.  Co.,  50  N.  Y.  402; 
Idaho  Forwarding  Co.  v.  Fireman's  Fund  Ins.  Co.,  8  Utah,  41,  17  L. 
R.  A.  580. 


60  THE   ORAL   CONTRACT.  §  33 

performed,  the  promisee  lias  his  remedy  against  the  promisor 
for  breach  of  the  contract  which  was  actually  made.  An  agent 
of  an  insurance  company  who  is  held  out  by  it  as  having  au- 
thority to  negotiate  contracts  of  insurance  for  it  can  make 
a  preliminary  contract,  (a)  to  issue  a  contract  in  futuro,  or 
(b)  to  renew  and  keep  alive  existing  contracts,  binding  upon 
his  company ;  and  for  breach  of  such  a  contract  to  insure  or 
renew  the  company  will  be'  liable  upon  the  happening  of  the 
contingency  or  event  to  be  insured  against,  to  the  same  extent 
as  if  the  insurance  promised  were  in  force.^^  But  it  must 
appear  that  the  agent  had  authority  to  bind  the  company 
sought  to  be  held;-"^^  and  that  all  the  terms  of  the  contract 
were  agreed  upon,  either  exj)ressly  or  impliedly,  by  and  with 
the  insurer  in  question.^ '^  In  the  case  of  an  oral  contract  of 
insurance,  when  a  loss  occurs,  the  proper  remedy  of  the  in- 
sured is  by  an  action  upon  the  contract ;  in  the  case  of  an  oral 
contract  for  insurance,  when  a  loss  occurs,"  the  insured  may 
usually  sue  either  for  damages  for  breach  of  the  contract  to  in- 
sure, or  he  may  ask  for  specific  performance  of  the  contract 
and  then  sue  upon  the  policy.  The  amount  of  damages  re- 
coverable in  both  cases  is  the  same,  viz. :  the  amount  of  the 
loss  to  the  extent  of  the  insurance  bargained  for.^^     There  is, 

^''McCabe  v.  Aetna  Ins.  Co.,  9  N.  D.  19,  81  N.  W.  428;  Sanford  v. 
Orient  Ins.  Co.,  174  Mass.  416,  49  Cent.  Law  J.  467.  See  ante,  §  30, 
"Proof  of  Contract."  Walker  v.  Farmers'  Ins.  Co.,  51  Iowa,  680,  2 
N.  W.  583;  Fish  v.  Cottenet,  44  N.  Y.  538;  Manchester  v.  Guardian 
Assur.  Co..  151  N.  Y.  88.  45  N.  E.  281, 

^o  Stewart  v.  Helvetia  S.  F.  Ins.  Co.,  102  Cal.  218. 

'•Putnam  v.  Home  Ins.  Co.,  123  Mass.  324;  Myers  v.  Liverpool  & 
L.  &  G.  Ins.  Co.,  121  Mass.  338;  Sargent  v.  National  Fire  Ins.  Co., 
86  N.  Y.  626;  O'Reilly  v.  London  Assur.  Corp.,  101  N.  Y.  575; 
Newark  Machine  Co.  v.  Kenton  Ins.  Co.,  50  Ohio  St.  549,  22  L.  R.  A. 
768. 

»*  Campbell  v.  American  Fire  Ins.  Co.,  73  Wis.  100,  40  N.  W.  661; 
Fidelity  &  C.  Co.  v.  Ballard  &  B.  Co.  (Ky.),  48  S.  W.  1074;  Baile  v. 
St.  Joseph  F.  &  M.  Ins.  Co.,  73  Mo.  371. 


I  33  MAKING    AND    ENFORCEMENT.  61 

however,  a  material  difference  in  tlie  form  of  these  actions, 
and  the  rights  and  liabilities  of  the  parties  litigant  are  not  the 
same  in  each.  In  an  action  for  specific  performance,  and 
upon  the  policy,  the  plaintiff  is  bound  by  all  the  terms  and 
conditions  of  the  policy  contemplated  by  the  preliminary  con- 
tract and  decreed  by  the  court,  and  he  can  only  recover  after 
complying  with  the  conditions  of  such  policy,  e.  g.  including 
those  as  to  furnishing  proofs  of  loss  within  a  specified  time  ;''^^ 
whereas  in  an  action  for  breach  of  a  contract  to  insure,  it  is 
no  defense  that  the  policy  if  issued  would  have  contained  a 
condition  requiring  proofs  of  loss.'*'^ 

As  already  seen,  neither  of  these  actions  will  lie  against 
an  insurer  until  a  contract  of  one  kind  or  the  other  is  shown 
to  have  been. made  by  it.^^  The  president  of  a  bank,  who  is 
also  agent  for  an  insurance  company,  cannot  bind  the  com- 
pany by  his  undertaking  on  its  behalf  to  issue  a  policy  on  the 
property  of  the  bank ;  nor  can  the  receiver  of  an  insolvent  bind 
a  company  he  represents  by  undertaking  to  renew  insurance 
of  that  company  on  property  held  by  him  in  his  official  capac- 
ity ;  ^-  nor  will  an  action  lie  against  the  agent  of  an  insurance 
company  on  account  of  the  breach  of  his  contract  with  a 
property  owner  to  keep  the  policies  of  the  owner  in  that 
company  continuously  renewed  and  to  keep  all  the  property 
insured  for  a  number  of  years  in  the  same  company,  since 
the  fulfillment  of  the  contract  might  compel  the  agent  to 

«» Hicks  v.  British  American  Assur.  Co.,  162  N.  Y.  284,  48  L.  R.  A. 
424. 

« Eureka  Ins.  Co.  v.  Robinson,  56  Pa.  St.  267;  post,  §  46;  Tayloe 
V.  Merchants'  Fire  Ins.  Co.,  9  How.  (U.  S,")  390;  Campbell  v.  Ameri- 
can Fire  Ins.  Co.,  73  Wis.  100,  40  N.  W.  661;  Nebraska  &  I.  Ins,  Co. 
V.  Seivers,  27  Neb.  541,  43  N.  W.  351. 

"Ante,  §  17. 

"  Post,  c  8,  "Agents." 


62  THE    ORAL    CONTEACT.  §  34 

assume  improper  risks  and  interfere  with  the  discharge  of 
his  duty  to  the  insurer. "^'^ 

Any  person,  whether  an  insurance  agent  or  not,  who  under- 
takes to  procure  or  place  insurance  uj)on  si^ccified  property, 
is  under  obligation  to  act  promptly  and  to  select  responsible 
companies.  For  breach  of  his  undertaking,  he  becomes  liable 
in  case  of  a  loss  to  indemnify  the  party  who  should  have  been 
insured  to  the  extent  of  the  insurance  promised.  If  apj)li- 
cation  for  insurance  be  made  to  an  agent  who  represents 
several  companies,  no  company  assumes  any  liability  until  it 
be  selected  as  an  insurer  and  the  terms  of  the  contract  are 
agreed  upon.  But  if  such  agent,  when  the  application  is 
made  to  him,  agrees  to  insure  the  property  from  a  given  date 
and  to  issue  a  policy  thereon,  he  thereby  assumes  the  risk 
j^ersonally,  and  becomes  liable,  in  case  a  loss  occurs  before 
a  policy  is  executed,  to  pay  as  much  of  the  loss  as  would  have 
been  covered  by  the  policy,  provided  the  same  had  been  is- 
sued.'*^ 

The  Binding  Slip. 

§  34.  A  binding  slip  is  an  incomplete  writing  evidencing  an 
insurance. 

The  term  "binding  slip,"  in  insurance  parlance,  is  used  to 
describe  an  informal  writing  executed  on  behalf  of  an  insurer 
to  an  applicant  for  insurance  at  the  time  the  application  is 
made  as  evidence  of  the  fact  that  the  application  has  been 
accepted  with  or  without  qualification  or  condition.  It  varies 
as  to  definiteness  and  detail.  It  usually  contains  a  receipt 
for  the  premium,    (if  paid),   and  a  further  memorandum 

*^  Ramspeck  v.  Pattillo.  104  Ga.  772,  42  L.  R.  A.  197. 

"Campbell  v.  American  Fire  Ins.  Co.,  73  Wis.  100,  40  N.  W.  661; 
Lindsay  v.  Pettigrew,  5  S.  D.  500,  59  N.  W.  726;  Stadler  v.  Trever, 
86  Wis.  42,  56  N.  W.  187;  post,  c.  8,  notes  337,  338;  Minneapolis 
Threshing  Machine  Co.  v.  Darnall.  13  S.  D.  279,  83  N.  W.  267. 


§  34  THE    BINDING    SLIP.  03 

sufficient  to  identify  the  parties,  tlie  subject  matter,  and  tlie 
principal  terms  of  the  contract,  together  with  a  statement  that 
it  is  binding  upon  the  insurer  issuing  it  from  the  date  men- 
tioned either  for  a  given  time,  or  until  a  policy  be  issued,  or 
until  the  application  be  finally  accepted  or  rejected.  It  is 
not  a  mere  agreement  to  insure,  but  a  present  insurance.  In 
so  far  as  it  is  complete,  definite,  and  certain,  it  constitutes 
the  contract  of  the  parties  for  the  time  being,  and  until  it  is 
superseded  by  a  new  contract,  or  the  execution  and  delivery  of 
fi  policy,  or  until  it  expires  by  the  termination  of  the  period 
during  which  it  was  to  be  in  effect  or  by  mutual  consent.  In 
so  far  as  it  is  incomplete,  indefinite,  and  uncertain,  it  must  be 
construed  with  reference  to  the  facts  and  circumstances  sur- 
rounding its  making,  the  situation  of  the  subject  matter, 
and  the  negotiations  and  relations  of  the  parties.  Though 
none  of  the  conditions  found  in  ordinary  insurance  policies 
be  mentioned,  the  rights  and  liabilities  of  the  parties  arc 
the  same  as  though  the  binding  slip  had  stated  that  the 
present  insurance  was  imder  the  terms  contained  in  the  policy 
regularly  issued  by  the  company,  or  the  terms  of  a  standard 
policy  if  one  be  prescribed.  And  the  strict  fulfillment  of  these 
conditions  can  be  demanded  of  the  insured  by  the  insurer 
even  though  no  policy  be  delivered. ^'^ 

*'Lipman  v.  Niagara  Fire  Ins.  Co.,  121  N.  Y.  454,  8  L.  R.  A.  719; 
Karlesen  v.  Sun  Fire  Office,  122  N.  Y.  545;  Hicks  v.  British  America 
Assur.  Co.,  162  N.  Y.  284,  48  L.  R.  A.  424;  Cole  v.  Union  Cent.  Life 
Ins.  Co.  (Wash.),  47  L.  R.  A.  204;  Scammell  v.  China  Mut.  Ins.  Co., 
164  Mass.  341;  Patterson  v.  Royal  Ins.  Co.  14  Grant's  Ch.  (Up.  Can.) 
169;  Kennedy  v.  New  York  Life  Ins.  Co.,  10  La.  Ann.  809;  Shaw  v. 
Republic  Life  Ins.  Co.,  67  Barb.  (N.  Y.)  586;  Barr  v.  Insurance  Co. 
of  North  America,  61  Ind.  488;  Scurry  v.  Cotton  States  Life  Ins.  Co.. 
51  Ga.  624;  Hubbard  v.  Hartford  Fire  Ins.  Co.,  33  Iowa,  325;  Marks 
V.  Hope  Mut.  Life  Ins.  Co.,  117  Mass.  528;  Neville  v.  Merchants'  &  M. 
Mut.  Ins.  Co.,  17  Ohio,  192;  Putnam  v.  Home  Ins.  Co.,  123"  Mass. 
324.     See  ante,  §  29,  "Oral  Contract." 


6i  THE    COXTKACT  —  FORM,  §§  35-3& 

Merger  of  Oral  Contract. 

§  35.  Preliminary  arrangements  are  merged  into  a  subse- 
quently executed  written  contract. 

All  previous  verbal  agreements,  and  all  informal  or  incom- 
plete written  agreements  evidenced  by  binding  slips,  are 
merged  into  and  superseded  by  a  complete  written  contract 
of  insurance  subsequently  made  and  accepted  by  the  parties ; 
and,  in  the  absence  of  fraud  or  mistake,  this  will  be  conclu- 
sively presumed  to  contain  the  entire  engagements  of  the 
parties  with  all  the  terms  and  conditions  contemplated  by 
them,  and  to  express  the  full  measure  of  the  rights  and  liabili- 
ties of  each.'*^     This  final  written  contract  of  insurance  is 

called  a  policy. 

The  Policy. 

§  36.  A  policy  is  a  written  contract  of  insurance. 

§  37.  Its  essentials  are  those  of  an  oral  contract. 

§  38.  The  parties  may  agree  upon  and  insert  in  a  policy  any 
stipulations  or  conditions  which  are  not  forbidden  by  either 
public  policy  or  positive  law. 

§  39.  There  are  many  different  kinds  of  policies,  as  — 

(a)  Wager  policies,  which  are  of  a  gambling  nature 

and  illegal; 

(b)  Interest  policies,  which  protect  an  insurable  in- 

terest of  the  one  insured; 

(c)  Open  policies,  in  which  the  amount  of  indemnity 

to  be  paid  is  not  fixed  till  a  loss  occurs  or  the 
event  insured  against  happens; 

(d)  Valued  policies,  in  which  the  amount  to  be  paid 

in  case  of  total  loss  is  stipulated  and  fixed  in  ad- 
vance. In  this  class  life  and  accident  policies 
are  often  included; 

(e)  Running,  blanket  and  floating  policies,  which  are 

used  when  the  subject  matter  and  insurable  in- 
surable interest  are  variable  and  fluctuating ; 

(f)  Standard  policies,  which  are  prescribed  by  stat- 

utes in  different  states  to  insure  an  ujaiformity  of 
contract  within  each  jurisdiction. 

^'Ante,  note  29. 


§39 


THE   POLICY. 


65 


General  Statement. 

When  an  insurer  and  an  insured  have  reduced  their  con- 
tract of  insurance  to  writing,  that  writing  or  written  contract 
is  called  a  policy  of  insurance,  or  simply  a  policy.  The  use 
of  the  term  "policy"  imports  a  written  contract  of  insurance, 
and  to  say  that  one  is  protected  by  a  policy  means  that  he  is  a 
party  insured,  and  holds  a  written  contract  of  insurance  to 
which  that  name  is  ordinarily  given.  It  supersedes  all  pre- 
liminary negotiations  concerning  the  risk  which  it  covers,  for 
they  become,  and  are,  merged  into  it.  It  is  the  usual  evidence 
of  a  contract  of  insurance ;  but  its  execution  is  not  necessary  to 
enable  the  assured  to  maintain  an  action  upon  a  contract  of 
present  insurance  made  by  parol  or  by  binding  slip.  If 
issued,  it  is  the  best  evidence  of  what  the  contract  was ;  and, 
unless  fraud  or  mistake  be  proven,  parol  evidence  will  not 
be  admissible  to  contradict  it.  But  when  no  policy  is  issued, 
the  contract  may  be  proven  by  any  competent  evidence.'*^ 

Terms  and  Conditions  of  Policy. 

The  parties  can  insert  in  the  policy  such  terms  and  con- 
ditions and  stipulations  as  they  may  agree  upon,  provided 
always  that  these  must  not  be  contrary  to  public  policy  or  vio- 
lative of  the  substantive  law.  Many  states  have  undertaken 
to  regulate  the  form  and  contents  of  the  policy  by  statute. 
In  case  of  conflict  between  the  provisions  of  the  policy  and 

"Morrison  v.  Insurance  Co.  of  North  America,  64  N.  H.  137;  Mc- 
Cullouch  V.  Eagle  Ins.  Co.,  1  Pick.  (Mass.)  278;  Kennebec  Co.  v. 
Augusta  I.  &  B.  Co.,  6  Gray  (Mass.),  204;  Sperry  v.  Springfield  F. 
&  M.  Ins.  Co.,  2G  Fed.  234;  Union  Mut.  Life  Ins.  Co.  v.  Mowry,  96 
U.  S.  544;  Gerrish  v.  German  Ins.  Co.,  55  N.  H.  355.  The  policy 
does  not  necessarily  contain  the  whole  contract.  A  statute  upon 
the  subject  is  part  of  the  contract.  Cayon  v.  Dwelling  House  Ins. 
Co.,  68  Wis.  510;  Emery  v.  Piscataqua  F.  &  M.  Ins.  Co.,  52  Me.  322. 

KERH,  INS.— 5 


6Q  THE    CONTRACT  —  FOKM.  §  39 

those  of  tlie  statute,  the  former  must  give  way  to  the  latter.'*^ 
The  insurer  is  held  to  a  knowledge  of  all  the  conditions  of 
his  policy,  and  the  fact  that  he  has  neither  seen  it  nor  read  it 
is  immaterial  unless  caused  by  the  fraud  or  fault  of  the  in- 
surer. ^^  These  questions  are  dealt  with  at  greater  length 
elsewhere.^** 

The  Contents  of  the  Policy  —  Essentials. 

We  have  already  seen  that  certain  terms  must  be  agreed 
upon  prior  to  the  consummation  of  any  contract  of  insurance, 
and  that  these  are  essentials  of  the  contract.^  ^  Though  the 
form  of  the  policy  is  immaterial,  except  where  prescribed  by 
statute,  it  usually  contains  a  statement  and  description  of 
these  essentials,  either  in  itself  or  by  reference  to  the  applica- 
tion or  other  papers,  and  in  addition  thereto  certain  condi- 
tions, stipulations,  provisions,  and  ofttimes  warranties,  in- 
tended to  regulate  and  fix  the  rights  and  liabilities  of  the 
parties  inter  se  with  greater  definiteness  and  precision. 
Wherein  a  policy  is  lacking  in  a  statement  of  the  essentials 
it  may  sometimes  be  aided  by  extrinsic  evidence  provided 
the  contract  be  complete  within  the  rules  before  stated.  Or  if 
anything  material  or  essential  having  been  agreed  upon  is 
omitted  or  misstated  through  mutual  mistake  or  inadvertence, 
a  court  of  equity  will,  upon  a  proper  showing,  grant  appro- 
priate relief.^ ^  But  if  the  contract  itself,  taken  as  a  whole, 
be  incomplete  and  lacking  in  any  one  of  these  essentials,  so 

**  Queen  Ins.  Co.  v.  Leslie,  47  Ohio  St.  409,  9  L.  R.  A.  48;  Jeffries 
V.  Economical  Mut.  Life  Ins.  Co.,  22  Wall.  (U.  S,)47;  Oshkosli  Gas 
Light  Co.  V.  Germania  Fire  Ins.  Co.,  71  Wis.  454. 

^'Wilkins  v.  State  Ins.  Co.,  43  Minn.  177;  Cleaver  v.  Traders'  Ins. 
Co.,  71  Mich.  414;  Morrison  v.  North  America  Ins.  Co.,  69  Tex.  353. 

""Post,  "Conditions  and  Stipulations." 

"Ante.  §  17. 

"Post,  Reformation,  Specific  Performance;  Thompson  v.  Phenix 
Ins.  Co.,  136  U.  S.  287. 


I 


§  39  THE   POLICY.  67 

that  what  is  wanting  cannot  be  supplied,  or  is  not  properly 
inferable,  either  from  the  writings  of  the  parties,  or  their  oral 
agreement,  or  from  their  negotiations  considered  and  con- 
strued in  the  light  of  their  previous  dealings  (if  any),  and 
their  relations  to  the  subject  matter  and  the  risk,  and  all 
surrounding  facts  and  circumstances,  or  from  all  these  taken 
together,  then  the  lack  is  fatal  and  the  contract  is  not  binding 
nor  enforcible.^^  It  is  not  always  necessary  that  the  name  of 
the  insured  be  stated  in  the  policy  if  his  identity  be  sufficiently 
established;^^  or  that  the  nature  and  extent  of  the  interest 
be  set  out  if  it  is  not  disputed.^^  If  no  time  is  specified  in  the 
contract,  and  the  circumstances  do  not  compel  a  contrary  in- 
ference, the  risk  will  be  deemed  to  have  commenced  at  the 
date  of  the  contract.^ ^ 

Kinds  of  Policies. 

A  Wager  Policy  is  one  in  which  the  insured  has  no  insur- 
able interest  in  the  subject  matter  of  the  contract,  but  only  an 
interest  in  its  loss  or  destruction.  Such  policies  are  void  as 
being  purely  speculative  and  gaming  in  their  nature  and 
against  public  policy.^'^ 

"Ante,  notes  1.  2.  30-33. 

"Weed  V.  London  &  L.  Fire  Ins.  Co.,  116  N.  Y.  106;  Lee  v.  Massa- 
chusetts F.  &  M.  Ins.  Co.,  6  Mass.  215;  Home  Ins.  Co.  v.  Baltimore 
Warehouse  Co..  93  U.  S.  527. 

"Thompson  v.  Phenix  Ins.  Co.,  136  U.  S.  287;  Van  Natta  v.  Mut- 
ual Security  Ins.  Co.,  2  Sandf.  (N.  Y.)  490;  Steel  v.  Phenix  Ins.  Co. 
(C.  C.  A.),  51  Fed.  715,  154  U.  S.  518;  Baker  v.  State  Ins.  Co.,  31  Or. 
41,  48  Pac.  699,  27  Ins.  Law  J.  86  (faulty  description). 

■>*  Union  Ins.  Co.  v.  American  Fire  Ins.  Co.,  107  Cal.  327.  28  L. 
R.  A.  692;  Philadelphia  L.  Ins.  Co.  v.  American  L.  &  H.  Ins.  Co.,  23 
Pa.  St.  65;  Lee  v.  Massachusetts  F.  &  M.  Ins.  Co.,  6  Mass.  215;  Pot- 
ter V.  Phenix  Ins.  Co.,  63  Fed.  382  (in  oral  contract  it  begins  at 
once). 

"Connecticut  Mut.  Life  Ins.  Co.  v.  Schaefer,  94  U.  S.  457.  As  to 
what  constitutes  an  insurable  interest,  see  post,  ch.  IX. 


68  THE    CONTRACT  —  FORM.  §  3^ 

An  Interest  Policy  is  one  in  which  the  insured  has  an 
actual,  insurable  interest  in  the  subject  matter,  so  that,  but 
for  the  indemnity  and  compensation  contracted  for,  he  would 
be,  or  be  liable  to  become,  pecuniarily  damaged  by  the  happen- 
ing of  the  contingency  insured  against.^^ 

An  Open  Policy  is  one  in  which  the  sum  to  be  paid  is  not 
fixed  absolutely,  but  is  left  open  for  determination  by  the 
parties  when  a  loss  occurs.  This  determination  of  the  extent 
of  the  loss,  and  of  the  amount  for  which  the  insurer  is  liable, 
if  at  all,  is  called  the  adjustment  of  the  loss.  This  form  of 
policy  is  also  used  where  the  insurance  is  upon  a  class  of 
property  rather  than  specific  articles,  or  where  the  risk  changes 
as  to  location  and  quantity,  or  is  variable  ;^^  or  merchandise 
in  store  where  the  stock  is  fluctuating  both  in  amount  and 
value  ;^^  or  a  dwelling  house  where  the  insurance  is  for  a 
fixed  sura,  and  the  obligation  is  to  pay  "all  loss  and  damage"^ 
within  the  sum  named.^^ 

A  Valued  Policy  is  one  in  which  the  interest  of  the  insured 
in  the  subject  matter  and  the  amount  of  indemnity  which  he 
is  to  receive  in  case  of  total  loss,  is  agreed  upon  by  the  parties 
in  advance  and  stipulated  in  the  policy.  In  the  case  of  an 
open  policy  the  insured  must  prove  his  insurable  interest  and 
the  value  of  the  property,  but  under  a  valued  policy  the  sum 
fixed  is  conclusive  except  in  case  of  fraud  or  gross  overvalu- 

■^^  Sawyer  v.  Dodge  County  Mut.  Ins.  Co.,  37  Wis.  539;  Williams  v. 
Smith,  2  Caines  (N.  Y.),  130. 

^"Williams  v.  Continental  Ins.  Co.,  24  Fed.  767;  Snowden  v. 
Giiion,  101  N.  Y.  458;  Snell  v.  Delaware  Ins.  Co.,  4  Dall.  430,  Fed. 
Cas.  No.  13,137. 

•^Strohn  v.  Hartford  Fire  Ins.  Co.,  37  Wis.  625;  May,  Ins.  §  30; 
Watson  V.  Swann,  11  C.  B.  (N.  S.)  756;  Home  Ins.  Co.  v.  Baltimore 
Warehouse  Co.,  93  U.  S.  541;  Hoffman  v.  Aetna  Fire  Ins.  Co.,  Z2 
N.  Y.  405. 

"Farmers'  Ins.  Co.  v.  Butler,  38  Ohio  St.  128. 


I 


I  39  THE    POLICY.  C9 

ation.^2  -pijig  valuation  binds  both  parties  and  limits  the 
right  of  recovery  by  the  insured.®^  An  excessive  overvalua- 
tion is  presumptive  evidence  of  fraud.  Where  an  ovmer  of 
property  about  to  be  insured,  knowingly,  and  with  intent  to 
deceive  the  insurer,  overvalues  such  property,  and  the  insurer 
relying  upon  his  valuation  enters  into  the  contract,  the  con- 
tract is  voidable  by  the  insurer  if  it  acts  promptly  upon  its 
discovery  of  the  fraud.  If  the  knowledge  does  not  come  to 
it  until  after  the  loss,  it  may  then  take  advantage  of  it.^^  If 
the  statements  of  the  insured  in  his  application  are  made 
warranties  his  estimate  of  value  must  be  fair  and  reasonable. 
A  false  Avarranty  will  be  fatal  ;^^  otherwise  with  an  honest 
expression  of  opinion  which  overvalues  the  property  ;^^  espe- 

'-Alsop  V.  Commercial  Ins.  Co.,  1  Sumn.  451,  Fed,  Gas.  No.  262; 
Universal  Mut.  Fire  Ins.  Co.  v.  Weiss,  106  Pa.  St.  20;  Cushman  v. 
Northwestern  Ins.  Co.,  34  Me.  487;  Lycoming  Ins.  Co.  v.  Mitchell, 
48  Pa.  St.  367;  Borden  v.  Hingham  Mut.  Fire  Ins.  Co.,  18  Pick. 
(Mass.)  523;  Lewis  v.  Rucker,  2  Burrows,  1171;  McKim  v.  Phoenix 
Ins.  Co.,  2  Wash.  C.  C.  94,  Fed.  Cas.  No.  8,862.  An  open  policy  pro- 
viding that  the  goods  insured  are  "valued  at  as  indorsed"  means 
that  the  property  is  valued  at  the  sum  stated  as  its  value,  and  not 
at  the  sum  stated  as  the  amount  of  insurance.  The  policy  remains 
open  if  no  valuation  is  indorsed.  Snowden  v.  Guion,  101  N.  Y.  458; 
Chisholm  v.  National  Capitol  Life  Ins.  Co.,  52  Mo.  215;  Connecti- 
cut Mut.  Life  Ins.  Co.  v.  Schaefer,  94  U.  S.  457;  Bevin  v.  Connecti- 
cut Mut.  Life  Ins.  Co.,  23  Conn.  244;  Briggs  v.  McCullough,  36  Cal. 
542. 

"^Holmes  v.  Charlestown  Mut.  Fire  Ins.  Co.,  10  Mete.  (Mass.) 
211;  Luce  v.  Dorchester  Mut.  Fire  Ins.  Co.,  105  Mass.  297. 

"Nassauer  v.  Susquehanna  Mut.  Fire  Ins.  Co.,  109  Pa.  St.  507; 
Whittle  v.  Farmville  Ins.  Co.,  3  Hughes,  421,  Fed.  Cas.  No.  17,603; 
Hersey  v.  Merrimac  Co.  Mut.  Fire  Ins.  Co.,  27  N.  H.  149;  Gerhauser 
V.  North  British  &  Mercantile  Ins.  Co.,  7  Nev.  174;  Sturm  v.  Great 
Western  Ins.  Co.,  40  How.  Pr.  (N.  Y.)   423. 

«^Sun  Fire  Office  v.  Wich,  6  Colo.  App.  103,  39  Pac.  587;  School 
Dist.  No.  4  V.  State  Ins.  Co.,  61  Mo.  App.  597;  Carson  v.  Jersey  City 
Ins.  Co..  43  N.  J.  Law,  300. 

""First  Nat.  Bank  cf  Kansas  City  v.  Hartford  Fire  Ins.  Co.,  95 
U.  S.  673. 


70  THE    CONTRACT  —  FORM.  §  39 

cially  where  it  lias  been  examined  and  appraised  hy  the  agent 
of  the  insurer.^ ^  But  a  condition  in  the  policy  avoiding  it 
for  overvaluation  includes  any  substantial  overvaluation 
whether  made  in  good  or  bad  faith.^^ 

It  is  sometimes  difficult  to  determine  whether  a  policy 
be  valued  or  open,  or  partly  valued  and  partly  open.®^ 

Running,  Blanket  and  Floating  policies  are  often  issued 
to  cover  risks  where  the  amount  of  insurance  required  varies 
from  time  to  time,  or  where  the  location  of  the  subject  of  the 
risk,  or  the  identity  of  the  subject  itseK,  or  the  insurable  inter- 
est of  the  insured  therein  is  fluctuating,  as  in  the  case  of 
factors  and  warehousemenJ** 

The  Standard  Policy. 

Very  many  states  have  passed  laws  prescribing  the  exact 
form  of  insurance  policy  to  be  used  within  their  confines,  and 
forbidding  the  use  of  any  other  form  than  the  one  prescribed. 
There  is  no  question  as  to  the  validity  and  constitutionality  of 
such  regulation  of  the  insurancebusiness,at  least  so  far  as  con- 
ducted by  foreign  corporations  ;'^^  but  as  to  the  power  of  a  leg- 

"  Hubbard  v.  North  British  &  Mercantile  Ins.  Co.,  57  Mo.  App.  I. 

^  Boutelle  v.  Westchester  Fire  Ins.  Co.,  51  Vt.  4;  Lycoming  Fire 
Ins.  Co.  V.  Rubin,  79  111.  402;  Sun  Fire  Office  v.  Wich,  6  Colo.  App. 
103,  39  Pac.  587;  School  Dist.  No.  4  v.  State  Ins.  Co.,  61  Mo.  App.  597. 

^'Cushman  v.  Northwestern  Ins.  Co.,  34  Me.  487;  Harris  v.  Eagle 
Fire  Co.,  5  Johns.  (N.  Y.)  368;  Phoenix  Ins.  Co.  v.  McLoon,  100 
Mass.  475;  Post  v.  Hampshire  Mut.  Fire  Ins.  Co.,  12  Mete.  (Mass.) 
555;  Brown  v.  Quincy  Mut.  Fire  Ins.  Co.,  105  Mass.  396;  Lycoming 
Ins.  Co.  V.  IMitchell,  48  Pa.  St.  367;  Riley  v.  Hartford  Ins.  Co.,  2 
Conn.  368;  Snowden  v.  Guion,  101  N.  Y.  458.  Standard  fire  policies 
are  usually  valued.  See  post,  "Valued  Policy  Law;  Total  Loss; 
Arbitration."  45  Cent.  Law  J.  373. 

^''Home  Ins.  Co.  v.  Baltimore  Warehouse  Co.,  93  U.  S.  527;  Hoff- 
man V.  Aetna  Fire  Ins.  Co.,  32  N.  Y.  405. 

"53  Cent.  Law  J.  106;  Orient  Ins.  Co.  v.  Daggs,  172  U.  S.  557,  19 
Sup.  Ct.  281;    O'Neil  v.  American  Fire  Ins.  Co.,  166  Pa.  St.  72,  2(5 


§39 


THE   POLICY. 


71 


islature  to  so  restrict  the  right  of  the  individual  insurer  there 
is  much  doubt.'^^  A  legislature  desiring  to  provide  a  uniform 
policy  of  fire  insurance  to  be  made  and  issued  by  all  companies 
taking  such  risks,  so  that  none  other  than  the  standard  policy 
can  be  lawfully  issued  or  delivered  within  the  state,  must  itself 
provide  definitely  and  clearly  what  the  policy  shall  contain ; 
so  that  the  enactment  is  a  law  complete  in  all  its  terms  and 
conditions  at  the  time  of  its  passage,  and  nothing  must  be  left 
to  the  judgment  or  discretion  of  an  appointee  of  the  legisla- 
ture ;  so  that,  in  form  and  substance,  it  is  a  law  in  all  its  de- 
tails in  praesenti,  but  which  may  be  left  to  take  effect  in 
futuro,  if  necessary,  upon  the  ascertainment  of  any  prescribed 
fact  or  event.  So  an  act  providing  for  a  standard  policy  can- 
not constitutionally  delegate  to  an  insurance  commissioner 
the  preparation  of  the  form  of  the  policy  without  fixing  its 
terms  and  conditions.'^^  Standard  policies  are  ostensibly  in- 
tended to  insure  fair  and  honest  dealings  between  insurer 
and  insured  and  to  protect  the  latter  from  the  consequences  of 
contracts  which  he  might  otherwise  make.  The  beneficent 
results,  however,  are  more  fanciful  than  real,  and  certain  it 
is  that  both  parties  have  been  deprived  of  mutual  advantages 
by  the  abridgment  of  their  natural  rights  to  contract. 

Statutory  or  standard  policies  are  usually  valued  as  to 
buildings.     They  do  not  present  the  alternative  of  wager 

L.  R.  A.  715;  Anderson  v.  Manchester  Fire  Assur.  Co.,  59  Minn.  182, 
28  L.  R.  A.  609;  Bowling  v.  Lancashire  Ins.  Co.,  92  Wis.  63,  31  L.  R. 
A.  112;  Hicks  v.  British  America  Assur.  Co.,  162  N.  Y.  284,  48  L. 
R.  A.  424;  Business  Men's  League  v.  Waddill,  143  Mo.  495,  40  L.  R. 
A.  501. 

'"  Ante,  c.  2,  notes  24,  25. 

"Anderson  v.  Manchester  Fire  Assur.  Co.,  59  Minn.  182,  28  L. 
R.  A.  609;  O'Neil  v.  American  Fire  Ins,  Co.,  166  Pa.  St.  72,  26  L. 
R.  A.  715;  Bowling  v.  Lancashire  Ins.  Co.,  92  Wis.  63,  31  Ij.  R.  A. 
112. 


72  THE    CONTKACT  —  FORM.  §  39 

policies  to  indemnity  policies.  It  is  true  that,  prima  facie, 
they  raise  a  conclusive  presumption  as  to  the  value  of  the 
property  insured.  But  the  change  is  only  one  kind  of  indem- 
nity policy  to  another  from  the  optional  open  or  valued  policy 
to  the  compulsory  valued  policy.  '^It  makes  no  contract  for 
the  parties.  In  this  it  permits  absolute  freedom.  It  leaves 
them  to  fix  the  valuation  of  the  property  upon  such  prudence 
and  inquiry  as  they  choose.  It  only  ascribes  estoppel  after 
this  is  done ;  estoppel,  it  must  be  obser^'ed,  to  the  acts  of  the 
parties,  and  only  to  their  acts,  in  open  and  honest  dealing. 
Its  presumptions  cannot  be  urged  against  fraud," '^*  and  in 
some  instances  it  permits  the  subsequent  depreciation  of  the 
property  to  be  shov^Ti.'^^  All  contracts  are  entered  into  in 
contemplation  of  the  law  of  the  place,  which  becomes  part 
of  each  contract  and  prevails  over  conflicting  or  opposing  terms 
of  the  contract.'^^  The  provisions  of  a  standard  policy  issued 
under  an  unconstitutional  statute  will  be  construed  as  those 
of  a  voluntary  contract  of  the  parties,  and  not  as  the  require- 
ments of  a  valid  statute  which  can  be  waived  only  in  the 
prescribed  manner. '^''^ 

'^  Orient  Ins.  Co.  v.  Daggs,  172  U.  S.  557,  19  Sup,  Ct.  281.  See  45 
Cent.  Law  J.  373. 

"Rev.  St.  Mo.  c.  89,  art.  4,  §  5897. 

"Ante,  note  48;  post,  §  55. 

"  Hicks  V.  British  America  Assur.  Co.,  162  N.  Y.  284,  48  L.  R.  A. 
424;  Griffith  v.  New  York  Life  Ins.  Co.,  101  Cal.  627,  40  Am.  St. 
Rep.  96.  Compare  German  Ins.  Co.  v.  Eddy,  36  Neb.  461,  19  L.  R. 
A.  707;  Quinlan  v.  Providence  W.  Ins.  Co.,  133  N.  Y.  365;  Harris  v. 
Phoenix  Ins.  Co.,  85  Iowa,  238,  52  N.  W.  128.  The  provisions  of  the 
Wisconsin  statute  creating  a  standard  policy  do  not  apply  to  town- 
ship mutual  insurance  companies.  Worachek  v.  New  Denmark  Mut. 
H.  F.  Ins.  Co.,  102  Wis.  88,  78  N.  W.  165. 


CHAPTER  IV. 

THE  CONTRACT  (Confinwed)— MAKING. 

§  40-46.  Consummation  of  Contract. 

47.  Delivery  of  Policy. 

48.  Duration  of  Contract. 

49.  Renewal  of  Contract. 

50.  Revival  of  Policy. 
51-52.  Application. 

Coi^SUMMATION"   OF   CONTRACT. 

§  40.  An  insurance  contract  is  completed  when  the  proposals 
of  the  one  party  have  been  unqualifiedly  and  unconditionally 
accepted  by  the  other  party,  and  the  acceptance  has  been  sig- 
nified by  some  proper  act. 

§  41.  The  essential  elements  of  the  contract  must  be  agreed 
upon. 

§  42.  An  application  for  insurance  alone  is  a  mere  ofiTer  to 
make  a  contract  upon  the  terms  specified,  and  forms  no  part 
of  a  contract  until  it  has  been  unconditionally  accepted. 

§  43.  If  negotiations  are  carried  on  by  mail,  the  contract  is 
complete  when  the  offer  of  the  one  party  has  been  uncondi- 
tionally accepted  by  the  other  and  a  letter  of  acceptance  has 
been  duly  mailed. 

§  44.  Policies  of  insurance  must  be  executed  by  duly  author- 
ized agents  of  the  insurer.  Provisions  requiring  them  to  be 
countersigned  are  not  of  the  essence  of  the  contract  and  may 
be  waived. 

45.  Neither  prepayment  of  the  premium  nor  delivery  of  a 
policy  are  necessarily  essential  to  the  completion  of  the  con- 
tract, unless  made  conditions  precedent  to  its  consummation 
by  agreement  of  the  contracting  parties. 

§  46.  Whether  either  or  both  are  such  conditions  precedent 
may  be  either 

(a)  A  question  of  law,  or 

(b)  A  question  of  fact,  or 

(c)  A  mixed  question  of  law  and  fact,  depending  al- 

ways on  the  circumstances  of  each  case. 


74  THE    CONTRACT MAKING.  §  40 

The  answer  to  an  inqnirj  as  to  whether  or  not  certain  nego- 
tiations and  transactions  between  an  applicant  for  insurance 
and  an  insurer  looking  towards  the  insuring  of  the  former  by 
the  latter  constitute  a  perfect  or  complete  contract  of  insur- 
ance, involves  no  more  than  the  application  of  the  well  known 
principles  of  law  governing  the  completion  and  consummation 
of  other  contracts  to  the  facts  of  the  given  case.  To  the 
making  of  any  binding  and  enforcible  contract  there  must  be 
at  least  two  parties  capable  in  law  of  contracting  in  the  prem- 
ises. There  must  be  a  distinct  proposition  made  by  one 
party  and  an  unconditional  acceptance  of  it  by  the  other. 
This  offer  and  acceptance  must  be  communicated  in  some 
proper  manner  so  that  there  is  a  distinct  meeting  of  the  minds 
of  the  contracting  parties,  and  the  object  which  the  contract 
proposes  to  effect  must  be  legal.  There  must  be  a  mutuality 
of  obligation.  The  offer  and  acceptance  and  their  communica- 
tion may  be  expressed  or  implied,  verbal  or  written,  by  acts 
or  conduct,  or  Avriting,  or  words,  or  by  all  together,  except  in 
cases  where  special  forms  or  requirements  are  demanded  by 
the  lex  loci  contractus. 

Concerning  a  contract  of  insurance,  we  have  seen  that  there 
are  certain  imperative  essentials;  that,  subject  to  some  few 
exceptions,  the  contract  may  be  oral  or  in  writing;  that 
statutory  regulations  of  the  form  and  substance  of  the  con- 
tract are  valid ;  that  the  legislature  of  a  state  can  restrict  the 
making  of  such  a  contract  within  that  state  to  corporations 
which  have  complied  with  certain  prescribed  requirements 
(at  least  as  far  as  insuring  corporations  are  concerned)  ;  and 
that  only  certain  risks  can  be  legally  assumed  by  insurers. 

Applying  this,  then,  to  the  consummation  of  a  contract  of 
insurance,  we  find  that,-  primarily,  the  establishment  of  the 
contract  requires  proof  that  its  essential  elements  have  been 
determined  and  agreed  upon  in  legal  form  by  two  parties  who 


§  40  CONSUMMATION    OF    CONTRACT.  75 

are  autliorized  by  tlie  law  of  tlie  place  of  the  contract  to 
undertake  the  obligations  which  they  have  assumed.  Both 
parties  must  be  bound — the  one  to  insure,  the  other  to  pay 
the  premium.  All  the  necessary  elements  must  be  agreed 
upon,  either  expressly,  or  impliedly ;  and  if  anything  is  left 
open  and  undetermined  so  that  the  minds  of  the  parties  have 
not  met  upon  any  essential  point,  no  contract  exists,  and  there 
is  no  liability  on  the  part  of  the  insurer  to  pay  the  loss,  nor  on 
the  part  of  the  insured  to  pay  the  premium ;  as  where  the  rate 
of  premium  is  left  undetermined,  or  the  time  when  the  policy 
will  attach,  or  the  apportionment  of  the  risk  has  not  been 
made,  or  the  insured  retains  control  over  the  premium  note 
or  any  papers,  the  delivery  of  which  is  a  condition  precedent. 
And  further,  each  party  must  have  done  all  that  was  under- 
stood and  agreed  would  be  done  before  the  risk  would  attach. 
When  all  this  has  been  done,  when  all  the  essentials  have  been 
agreed  upon,  wdien  the  insurer  has  agreed  to  insure  upon  the 
exact  terms  proposed  by  the  applicant,  when  nothing  remains 
to  be  done  by  either  as  a  condition  precedent,  then  the  contract 
is  perfect  and  complete,  and  goes  into  effect  immediately  or  at 
a  stipulated  date  in  the  future.  Until  tlien  it  is  only  an 
executory  agreement  to  make  a  contract.  The  relation  of 
insurer  and  insured  is  established  at  the  moment  when  the 
former  has  a  cause  of  action  against  the  latter  for  the  initial 
premium,  if  this  has  not  been  paid,  and  when  the  latter  is 
entitled  to  a  delivery  of  his  policy,  if  it  has  not  been  de- 
livered.^ 

'  Mattoon  Mfg.  Co.  v.  Oshkosh  Mut.  Fire  Ins.  Co.,  69  Wis.  564,  35- 
N.  W.  12;  Lingenfelter  v.  Phoenix' Ins.  Co.,  19  Mo.  App.  252;  Ander- 
son V.  Continental  Ins.  Co.,  105  N.  Y.  666,  106  N.  Y.  661;  Ellis  v. 
Albany  City  Fire  Ins.  Co.,  50  N.  Y.  402;  Hubbard  v.  Hartford  Fire 
Ins.  Co.,  33  Iowa,  325;  Baldwin  v.  Chouteau  Ins.  Co.,  56  Mo.  151; 
Tayloe  v.  Merchants'  Fire  Ins.  Co.,  9  How.  (U.  S.)  390;  Massasoit 
Steam  Mills  Co.  v.  Western  Assur,  Co.,   125  Mass.  110;   Taylor  v. 


76  THE   CONTEACT — MAKING.  §40 

It  is  competent  for  the  parties  to  make  an  oral  contract  of 
insurance  in  praese^iti  to  be  followed  by  the  execution  and 
d  eh  very  of  a  policy  into  which  all  previous  negotiations  will 
be  merged,  and  which,  when  executed  and  delivered,  will  be 
the  best  evidence  of  tha  contract ;  but  in  view  of  the  general 
custom  of  issuing  policies  upon  all  risks  assumed,  the  proof  of 
an  oral  contract  for  insurance  prior  to  the  issuance  of  a 
policy  must  be  clear.  If  there  has  been  no  payment  of  the 
premium,  or  delivery  of  the  policy,  the  contract  is  prima  facie 
incomplete ;  and  one  claiming  under  such  a  policy  must  show 
an  understanding  and  agreement  of  the  parties  that  it  should 
become  operative  notwithstanding  these  facts.^  Prepayment 
of  the  premium  is  not  necessary,  if  the  amount  be  fixed  and 
credit  be  given  by  the  insurer.^ 

State  Ins.  Co.,  107  Iowa,  275,  77  N.  W.  1032;  Mathers  v.  Union  Mut. 
Ace.  Ass'n,  78  Wis.  588,  11  L.  R.  A.  83;  Michigan  Pipe  Co.  v.  Michi- 
gan F.  &  M.  Ins.  Co.,  92  Mich.  482,  20  L.  R.  A.  277;  Johnson  v.  Con- 
necticut Fire  Ins.  Co.,  84  Ky.  470;  Hamblet  v.  City  Ins.  Co.,  36  Fed, 
118;  New  Yorlt  Life  Ins.  Co.  v.  Babcoclc,  104  Ga.  67,  30  S.  E.  273,  42 
L.  R.  A.  88;  Hebert  v.  Mutual  Life  Ins.  Co.,  12  Fed.  807;  Diboll  v. 
Aetna  Life  Ins.  Co.,  32  La.  Ann.  179. 

=^  Wainer  v.  Milford  Mut.  Fire  Ins.  Co.,  153  Mass.  335,  11  L.  R.  A. 
598;  Myers  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  121  Mass.  338;  Supreme 
Lodge  of  Protection  v.  Grace,  60  Tex.  569;  Heiman  v.  Phoenix  Mut. 
Life  Ins.  Co.,  17  Minn.  153  (Gil.  127);  Michigan  Pipe  Co.  v.  Michi- 
gan F.  &  M.  Ins.  Co.,  92  Mich.  482,  20  L.  R.  A.  277;  Hughes  v.  Mer- 
cantile Mut.  Ins.  Co.,  55  N.  Y.  265;  Mattoon  Mfg.  Co.  v.  Oshkosh 
Mut.  Fire  Ins.  Co.,  69  Wis.  564,  35  N.  W.  12;  Travis  v.  Peabody  Ins. 
Co.,  28  W.  Va.  583;  Goddard  v.  Monitor  Mut.  Fire  Ins.  Co.,  108 
Mass.  57.     Ante,  p.  53. 

'  See  post,  note  7,  and  c.  X,  "Premium." 

Examples  of  incomplete  contracts:  People's  Ins.  Co.  v.  Paddon,  8 
111.  App.  447.  Negotiations  incomplete,  Todd  v.  Piedmont  &  A.  Life 
Ins.  Co.,  34  La.  Ann.  63;  Armstrong  v.  State  Ins.  Co.,  61  Iowa,  212. 
Policy  not  delivered  nor  premium  paid,  Schaffer  v.  Mutual  Fire  Ins. 
Co.,  89  Pa.  St.  296;  Wainer  v.  Milford  Mut.  Fire  Ins.  Co.,  153  Mass. 
335,  11  L.  R.  A.  598;  St.  Louis  Mut.  Life  Ins.  Co.  v.  Kennedy,  6  Bush 
(Ky.),  450;   Myers  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  121  Mass.  338. 


§  40  CONSL'MMATION    OF   CONTRACT.  77 

The  Fixing  of  the  Terms  of  the  Contract. 

There  must  be  a  meeting  of  the  minds  of  the  contracting 
parties  and  an  agreement,  either  express  or  implied,  between 
them  as  to  all  the  essential  elements  of  the  contract.  Not 
merely  the  verbal  and  written  negotiations  are  to  be  con- 
sidered, but  also  the  relations  of  the  parties  to  each  other 
and  to  the  subject  matter,  their  previous  business  transactions, 
the  established  custom  and  usage  of  the  place,  and  all  sur- 
rounding facts  and  circumstances.  Thus,  where  application 
for  insurance  upon  merchandise  in  a  storehouse  is  made  to  a 
company  authorized  to  insure  only  against  fire  and  marine 
risks,  it  can  properly  be  inferred  that  the  protection  sought 
is  against  fire;^  and  if  the  subject  be  an  unfinished  vessel  and 
the  hazard  contemplated  by  fire  alone,  the  contract  must  be 
regarded  as  one  of  fire  insurance.^  It  is  sufficient  if  one  party 
proposes  to  be  insured,  and  the  other  party  agrees  to  insure, 
and  the  essentials  are  ascertained  or  understood,  and  the  prc- 
]nium  paid  if  demanded.  It  Avill  be  presumed  that  they  con- 
template such  form  of  policy  with  such  conditions  and  limita- 
tions as  are  usual  in  such  cases,  or  as  have  been  used  before 
between  the  parties.^  A  contract  is  not  incomplete  merely 
because  the  premium  has  not  been  fixed  nor  paid,  or  the  time 

Insurance  not  apportioned,  Kimball  v.  Lion  Ins.  Co.,  17  Fed.  625. 
Offer  and  acceptance  not  identical,  Stockton  v.  Firemen's  Ins.  Co., 
33  La.  Ann.  577.  Mutual  offer  not  accepted,  Alabama  Gold  Life  Ins. 
Co.  V.  Mayes,  61  Ala.  163.  Mutual  company  application  not  accepted 
by  proper  officers,  Haden  v.  Farmers'  &  Mechanics'  Fire  Ass'n,  80 
Va.  683.  Attempted  contract  by  unauthorized  agent,  solicitor,  Ham- 
bkton  V.  Home  Ins.  Co.,  6  Biss.  91,  Fed.  Cas.  No.  5,972;  Morse  v. 
St.  Paul  F.  &  M.  Ins.  Co..  21  Minn.  407. 

*  Baile  v.  St.  Joseph  F.  &  M.  Ins.  Co.,  73  Mo.  371. 

'  Eureka  Ins.  Co.  v.  Robinson.  56  Pa.  St.  256. 

"Fames  v.  Home  Ins.  Co.,  94  U.  S.  621;  Hebert  v.  Mutual  Life  Ins. 
Co.,  8  Sawy.  198;  12  Fed.  807;  Hicks  v.  British  America  Assur.  Co., 
162  N.  Y.  284,  48  L.  R.  A.  424. 


78  THE   CONTKAOT— MAKING.  §  40 

for  wliicli  the  insurance  is  to  run  has  not  he.en  expressly 
agreed  upon  where  there  is  a  well  understood  rate  on  that 
cla? 3  of  risks,  and  where  the  usual  term  is  one  year,  and  where 
an  intention  to  give  credit  can  be  inferred.  Where  tliere  have 
been  previous  relations  between  the  parties  an  application  is 
presumed  to  have  been  made  with  reference  to  such  relations, 
and  in  the  absence  of  an  express  contract  or  circumstances 
indicating  a  contrary  intent,  the  parties  will  be  held  to  have 
contemplated  the  issuance  of  the  same  contract  as  had  been 
previously  issued,  for  a  similar  amount  and  period,  at  the 
regular  rate  of  premium,  and  that  the  usual  course  of  busi- 
ness as  to  giving  credit  for  the  premium  would  still  con- 
tinue.'^ 

The  Effect  of  Making  an  Application. 

The  making  of  an  application  is  not,  strictly  speaking,  es- 
sential to  the  making  of  an  insurance  contract.  The  offer 
may  come  primarily  from  tlie  insurer.  If  an  application  is 
made  its  form  and  substance  are  matters  for  the  determination 
of  the  parties.  In  any  event  an  application  is  a  mere  offer 
to  make  a  contract.  When  the  party  to  whom  it  is  made 
signifies  his  acceptance  of  it  to  the  proposer  (and  not  before) 
the  minds  of  the  parties  meet  and  the  contract  is  made.     This 

^Michigan  Pipe  Co.  v.  Michigan  F.  &  M.  Ins.  Co.,  92  Mich.  482,  20 
L.  R.  A.  277;  Boice  v.  Thames  &  M.  Marine  Ins.  Co.,  38  Hun 
(N.  Y.),  246;  Milwaukee  Mechanics'  Ins.  Co.  v.  Graham,  181  111. 
158;  Train  v.  Holland  Purchase  Ins.  Co.,  62  N.  Y.  598;  Winne  v. 
Niagara  Fire  Ins.  Co.,  91  N.  Y.  185;  Michigan  Pipe  Co.  v.  North 
British  &  M.  Ins.  Co.,  97  Mich.  493,  56  N.  W.  849.  In  Cooke  v.  Aetna 
Ins.  Co.,  7  Daly  (N.  Y.),  555,  it  was  held  that  the  contract  in  prse- 
senti  might  be  complete  although  the  rate  of  premium  was  to  be 
established  by  the  insurer  after  investigation,  and  that  the  insured 
could  recover  for  a  loss  occurring  before  he  was  notified  of  the 
amount  of  the  premium. 


I  40  CONSCMMATIOX  OF  CONTKACT.  79 

acceptance  must  be  signified  by  some  act;^  and  mnst  be  by 
some  one  authorized  to  act  on  behalf  of  and  bind  the  ac- 
ceptor.^ Agents  have  only  such  powers  as  their  principal 
gives  to  them  or  holds  them  out  to  possess.  An  agent  author- 
ized only  to  solicit  insurance  has  no  authority  to  bind  his 
principal  by  contracting  for  insurance  on  its  behalf.  ^°  An 
application  may  be  accepted  conditionally,  as  where  it  stipu- 
lates that  the  contract  shall  be  completed  only  by  the  delivery 
of  a  policy  properly  countersigned,  in  which  event  there  is  no 
contract  unless  the  policy  be  countersigned  and  delivered  ;^^ 
or  for  a  limited  time,  pending  investigation,  when  the  insur- 
ance will  terminate  at  the  expiration  of  the  given  period 
unless  a  policy  issue  ;^^  or  it  may  state  in  terms  that  no  lia- 
bility shall  attach  until  the  application  is  accepted  and  a 
policy  delivered  ;^^  or  until  approval  by  certain  designated 
officers  or  agents  of  the  insurer,  in  which  case  the  insurer  is 
not  liable  for  a  loss  occurring  before  the  stipulated  approval 
has  been  given.''^  Where  a  written  application  is  made  for 
insurance  the  contract  is  not,  as  a  general  rule,  completed 

"Allen  V.  Massachusetts  Mut.  Ace.  Ass'n.  1G7  Mass.  18,  44  N.  E. 
1053;  Covenant  Mut.  Ben.  Ass'n  v.  Conway,  10  111.  App.  348;  Hel- 
man  v.  Phoenix  Mut.  Life  Ins.  Co.,  17  Minn.  153  (Gil.  127). 

•Post,  c.  8,  "Agents." 

^°  Morse  v.  St.  Paul  F.  &  M.  Ins.  Co.,  21  Minn.  407;  Fleming  v. 
Hartford  Fire  Ins.  Co.,  42  Wis.  616;  Rowland  v.  Springfield  F.  & 
M.  Ins.  Co.,  18  111.  App.  601. 

"McCully's  Adm'r  v.  Phoenix  Mut.  Life  Ins.  Co.,  18  W.  Va.  782; 
Moyes  v.  Phoenix  Mut.  Life  Ins.  Co..  1  Mo.  App.  584. 

"  Barr  v.  Insurance  Co.  of  North  America,  61  Ind.  488. 

"Chamberlain  v.  Prudential  Ins.  Co.  (Wis.),  85  N.  W.  128. 

"Pickett  V.  German  Fire  Ins.  Co.,  39  Kan.  697;  Atkinson  v. 
Hawkeye  Ins.  Co.,  71  Iowa,  340,  32  N.  W.  371;  New  York  Life  Ins. 
Co.  V.  Babcock,  104  Ga.  67,  42  L.  R.  A.  90;  Alabama  Gold  Life  Ins. 
Co,  V.  Mayes,  61  Ala.  163. 


80  THE   CONTKACT — MAKING.  §40 

until  the  aj^plication  lias  been  forwarded  to,  approved  and 
accepted  by  those  who  have  power  to  issue  the  policy.  ^'^ 

The  receipt  of  an  application  for  insurance  accompanied 
by  a  premium  note  at  the  home  office  of  an  insurer  to  which 
"they  have  been  forwarded  by  a  soliciting  agent  does  not  make 
a  contract  of  insurance.  The  delivery  of  the  note  and  appli- 
cation is  in  the  nature  of  a  proposition  for  insurance  whicli 
requires  the  assent  of  the  insurer  to  constitute  a  contract. 
And  mere  delay  in  acting  upon  the  application  is  not  the 
equivalent  of  an  acceptance  ;^*^  even  though  the  agent  has 
assured  the  applicant  that  the  insurance  was  in  effect  from  the 
signing  of  the  application,  since  it  is  not  the  duty  nor  within 
the  power  of  such  an  agent  to  construe  the  application  and  note 
nor  to  declare  their  legal  effect. ^''^     And  an  insurer  upori 

"Home  Forum  Ben.  Order  v.  Jones,  5  Okla.  598,  50  Pac.  165; 
Armstrong  v.  State  Ins.  Co.,  61  Iowa,  212. 

"Connecticut  Mut.  Life  Ins.  Co.  v.  Rudolph,  45  Tex.  454;  Missel- 
horn  V.  Mutual  Reserve  Fund  Life  Ass'n.  30  Fed.  545;  Kohen  v. 
Mutual  Reserve  Life  Fund  Ass'n,  28  Fed.  705;  Haskin  v.  Agricult- 
ural Fire  Ins.  Co.,  78  Va.  700;  New  York  Mut.  Ins.  Co.  v.  Johnson, 
23  Pa.  St.  74;  Easley  v.  New  Zealand  Ins.  Co.  (Idaho),  27  Ins.  Law  J. 
289;  Fowler  v.  Preferred  Ace.  Ins.  Co.,  100  Ga.  330,  27  Ins.  Law  J. 
168,  28  S.  E.  398;  More  v.  New  York  Bowery  Fire  Ins.  Co.,  130 
N.  Y.  537;  Royal  Ins.  Co.  v.  Beatty,  119  Pa.  St.  6;  Winnesheik  Ins. 
Co.  v.  Holzgrafe,  53  111.  516;  Harp  v.  Grangers'  Mut.  Fire  Ins.  Co., 
49  Md.  307;  Heiman  v.  Phoenix  Mut.  Life  Ins.  Co.,  17  Minn.  153  (Gil. 
127) ;  Alabama  Gold  Life  Ins.  Co.  v.  Mayes,  61  Ala.  163;  Otterbein  v. 
Iowa  State  Ins.  Co.,  57  Iowa,  274;  Covenant  Mut.  Ben.  Ass'n  v.  Con- 
way, 10  111.  App.  348. 

"Dryer  v.  Security  Fire  Ins.  Co.,  94  Iowa,  471,  62  N.  W.  799; 
Wlnchell  v.  Iowa  State  Ins.  Co.,  103  Iowa,  189,  72  N.  W.  504;  Fowler 
V.  Preferred  Ace.  Ins.  Co.,  100  Ga.  330,  27  Ins.  Law  J.  -168,  28  S.  E. 
338;  Easly  v.  New  Zealand  Ins.  Co.,  27  Ins.  Law  J.  289;  Fleming  v. 
Hartford  Fire  Ins.  Co.,  42  Wis.  616.  The  company  may  under  some 
circumstances  be  liable  for  the  failure  of  an  agent  to  seasonably 
forward  an  application.  Walker  v.  Farmers'  Ins.  Co.,  51  Iowa,  680, 
2  N.  W.  583;  Fish  v.  Cottenet,  44  N.  Y.  538. 


§  40  CONSUMilATION    OF   CONTKACT.  81 

learning  of  a  loss  may  reject  an  application  ^v]lic]l  it  liad 
previously  intended  to  accept  where  such  intention  has  not 
been  communicated  to  the  applicant,  and  the  application 
stij)ulates  that  its  receipt  and  acceptance  by  the  insurer  must 
precede  the  consummation  of  the  contract.  ^^ 

It  has  been  suggested  that  where  the  premium  note  is 
negotiable  and  the  insurer  upon  receiving  an  application  and 
note,  remains  silent,  it  may,  under  some  circumstances,  be 
held  to  have  approved  the  application;^^  but  such  a  holding- 
would  amount  to  the  courts  making  contracts  for  the  parties 
instead  of  construing  contracts  which  the  parties  have  made 
for  themselves.  The  applicant  and  insured  are  equally  inter- 
ested in  making  the  contract  and  it  as  much  the  duty  of  the 
latter  to  inquire  whether  his  proposal  had  been  accepted  as  it 
is  the  duty  of  the  former  to  give  the  information.  2° 

Mutual  Companies. 

In  determining  Avhether  one  has  been  received  into  the 
membership  of  and  insured  by  a  mutual  insurance  company, 
much  depends  upon  the  proAdsions  of  its  charter,  constitution 
and  by-laws.  Where  it  is  required,  as  a  condition  precedent, 
that  parties  seeking  to  become  members  shall  sign  an  applica- 
tion which  4s  to  form  the  basis  of  the  contract,  a  failure  to 
sign  the  application  is  evidence  that  a  contract  has  not  been 
made.^^  The  charter  provisions  must  be  complied  with.  By- 
laws enacted  for  the  use  and  benefit  of  the  company  may  be 
waived  by  it.     In  case  of  conflict  the  former  control. ^^     The 

"Allen  V.  Massachusetts  Mut.  Ace.  Ass'n,  167  Mass.  18,  44  N.  E. 
1053. 

"Atkinson  v.  Hawkeye  Ins.  Co.,  71  Iowa,  340,  32  N.  W.  371;  Pre- 
ferred Ace.  Ins.  Co.  V.  Stone,  61  Kan.  48,  58  Pae.  986. 

^"Wlnchell  v.  Iowa  State  Ins.  Co.,  103  Iowa,  189,  72  N.  W.  504. 

"  Supreme  Lodge  of  Protection  v.  Grace,  60  Tex.  569. 

"  Davidson  v.  Old  People's  Mut.  Ben.  Soc,  39  Minn.  303,  1  L.  R.  A. 
482;   ante,  "Ultra  Vires;"  Bishop  v.  Grand  Lodge,  43  Hun  (N.  Y.), 

KERR.  INS.— 6 


82  THE   CONTRACT  —  MAKING.  §  40 

delivery  of  a  certificate  is  not  always  essentiaP^^  unless  spe- 
cifically required.  ^^ 

The  Acceptance  of  the  Offer  and  the  Mutual  Assent. 

A  contract  is  not  complete  until  the  offer  of  one  party  hag 
been  unqualifiedly  and  unconditionally  accepted  by  the  other. 
An  application  for  insurance  being  a  mere  proposal  may 
be  withdrawn  at  any  time  before  it  is  accepted,  and  the  ap- 
plicant is  not  bound  to  accept  a  policy  subsequently  tendered. 
If  upon  receipt  of  an  application  the  insurer  rejects  it,  or 
accepts  it  with  qualification,  or  makes  a  counter  proposition, 
there  is  no  contract.  The  old  application  as  qualified  or  the 
new  offer  is  then  for  the  consideration  of  the  applicant.  The 
parties  must  agree  upon  the  same  identical  terms.  Until 
then  the  mutual  assent,  the  meeting  of  the  minds  of  the  parties, 
which  are  vital  to  the  existence  of  the  contract,  and  without 
w^hich  there  can  be  no  contract,  are  wanting.  The  obligation 
must  be  correlative.  If  there  is  none  on  the  one  side  there 
is  none  on  the  other,^'*     And  this  assent  must  be  signified  by 

472;  Belleville  Mut.  Ins.  Co.  v.  Van  Winkle,  12  N.  J.  Eq.  333; 
Taylor  v.  Grand  Lodge  A.  0.  U.  W,,  29  N,  Y,  Supp.  773, 

="•  Lorscher  v.  Supreme  Lodge  K.  H.,  72  Mich.  316,  2  L.  R.  A.  206. 

^  Home  Forum  Ben.  Order  v.  Jones,  5  Okla.  598,  50  Pac.  165.  See, 
also.  Van  ^  Slyke  v.  Trempealeau  County  Farmers'  Mut.  Fire  Ins. 
Co.,  48  Wis.  683;  Connecticut  Mut.  Life  Ins.  Co.  v.  Rudolph,  45  Tex. 
454;  Somers  v.  Kansas  Protective  Union.  42  Kan.  619;  Dodd  v. 
Gloucester  Mut.  Fishing  Ins.  Co.,  120  Mass.  468;  Cranberry  Mut. 
Fire  Ins.  Co.  v.  Hawk  (N.  J,),  14  Atl.  745;  Burlington  V.  R.  D.  v. 
White,  41  Neb.  547;  Eilenberger  v.  Protective  Mut.  Fire  Ins.  Co.,  89 
Pa.  St.  464;  Union  Mut.  Ins.  Co.  v.  Wilkinson,  13  Wall.  (U.  S.)  222; 
Gay  v.  Farmers'  Mut.  Ins.  Co.,  51  Mich.  245. 

"Mutual  Life  Ins.  Co.  v.  Young's  Adm'r,  23  Wall.  (U.  S.)  85; 
Hamilton  v.  Lycoming  Mut.  Ins.  Co.,  5  Pa.  St.  339;  Globe  Mut.  Life 
Ins.  Co,  V,  Snell,  19  Hun  (N,  Y,),  560;  Eliason  v,  Henshaw,  4  Wheat. 
(U,  S,)  225;  Stockton  v.  Firemen's  Ins.  Co.,  33  La.  Ann.  577;  Har- 
nickell  v.  New  York  Life   Ins.  Co,,  111  N.  Y.  390;    Wilson  v.  New 


§  40  CONSUMMATION"  OF  CONTKACT.  83 

some  act.  A  mere  mental  attitude  is  not  enoiigli.  Thus  an 
insurer  which  has  conchided  to  accept  an  application  hut  has 
not  communicated  such  intention,  may  suhsequentlj  refuse  to 
accept  the  risk.^^  An  insurance  contract  is  not  completed 
by  the  insurer  consenting  to  a  proposed  change  in  a  policy 
tendered  when  no  notice  of  the  acceptance  is  given  tx>  the  in- 
sured ;^^  nor  by  the  signing  of  an  application  and  the  exe- 
cution and  tender  of  a  policy  to  the  applicant  who  thereupon 
refuses  to  accept  it  and  pay  the  premium.^^  Even  where 
the  parties  supposed  they  had  agreed,  and  it  turned  out  that 
there  was  a  misunderstanding  as  to  a  material  point,  the 
requisite  mutual  assent  as  to  that  point  being  wanting,  it  was 
held  that  neither  was  bound. ^^  The  law  involved  is  expressed 
by  the  phrase  "it  takes  two  to  make  a  bargain."  ^^  The  time 
during  which  an  offer  is  to  be  accepted  may  be  fixed  by  its 
own  terms,  or  may  be  open,  in  which  event  the  offer  lapses 
after  the  expiration  of  a  reasonable  time. 

Hampshire  Fire  Ins.  Co.,  140  Mass.  210;  American  S.  B.  Ins.  Co.  v. 
Wilder,  39  Minn.  350;  Diboll  v.  Aetna  Life  Ins.  Co.,  32  La.  Ann.  179; 
Sheldon  v.  Hekla  Fire  Ins.  Co.,  65  Wis.  436. 

"See  post,  §  51;  Rogers  v.  Charter  Oak  Life  Ins.  Co.,  41  Conn. 
97;  Sheldon  v.  Atlantic  F.  &  M.  Ins.  Co.,  26  N.  Y.  460,  84  Am.  Dec. 
213;  Myers  v.  Keystone  Mut.  Life  Ins.  Co.,  27  Pa.  St.  268;  Bennett 
V.  City  Ins.  Co.,  115  Mass.  241.  Compare  Keim  v.  Home  Mut.  F.  & 
M.  Ins.  Co..  42  Mo.  38,  97  Am.  Dec.  291. 

=»  Equitable  Life  Assur.  Soc.  v.  McElroy,  49  U.  S.  App.  548,  83  Fed. 
631. 

"Hogben  v.  Metropolitan  Life  Ins.  Co.,  69  Conn.  503;  Schwartz  v. 
Germania  Life  Ins.  Co.,  21  Minn.  215;  Equitable  Life  Assur.  Soc.  v. 
McElroy,  49  U.  S.  App.  548,  83  Fed.  631. 

=«  Baldwin  v.  Mildeberger,  2  Hall  (N.  Y.),  196;  Goddard  v.  Monitor 
Mut.  Fire  Ins.  Co.,  108  Mass.  57;  Coles  v.  Bowne,  10  Paige  (N.  Y.), 
526;  Calverley  v.  Williams,  1  Ves.  Jr.  210;  Crane  v.  Partland,  9  Mich. 
493. 

'^  Mutual  Life  Ins.  Co.  v.  Young's  Adm'r,  23  Wall.  (U.  S.)  85. 


84:  THE   CONTRACT  —  MAKING.  §  4Q 

Correspondence  —  Negotiations  by  Mail. 

When  negotiations  concerning  any  business  transaction  are 
carried  on  by  persons  at  a  distance  from  eacb  other,  either  by 
letter  or  by  messenger,  or  by  telegraph,  an  undelivered  offer 
is  ineffectual  for  any  purpose.  The  offer  may  be  revoked  if 
overtaken  before  delivered  and  accepted.  But  an  attempted 
revocation  after  delivery  and  acceptance  of  the  offer  is  too  late. 
The  acceptance  may  be  transmitted  by  the  same  instrumen- 
tality which  conveyed  the  offer,  or  by  any  other  appropriate 
method  of  communication.  It  must  be  evidenced  by  some 
act  indicating  an  intention  to  make  the  contract  upon  the 
identical  terms  proposed,  and  communicated  or  put  in  a  way 
to  be  communicated  to  the  party  making  the  offer.  A  mailed 
offer  by  an  insurance  company,  prescribing  the  terms  upon 
which  it  will  assume  a  risk,  is  deemed-  a  valid  undertaking 
on  its  part  that  it  will  be  boimd,  according  to  the  terms  ten- 
dered, if  an  answer  is  transmitted  in  due  course  of  mail,  ac- 
cepting them.  Upon  the  acceptance  of  the  terms  proposed 
transmitted  by  due  course  of  mail  to  the  company,  the  con- 
tract becomes  complete,  and  the  insurer  is  liable  for  a  loss 
occurring  after  the  letter  of  acceptance  has  been  mailed  but 
before  it  was  received.  The  party  to  whom  the  proposal  is 
made  has  a  reasonable  time  in  which  to  accept  or  reject  it, 
except  where  by  its  terms  the  offer  lapses  within  a  specified 
time.^" 

'"Eames  v.  Home  Ins.  Co.,  94  U.  S.  621;  Thayer  v.  Middlesex  Mut. 
Fire  Ins.  Co.,  10  Pick.  (Mass.)  326;  Hallock  v.  Commercial  Ins.  Co., 

26  N.  J.  Law,  268;  Tayloe  v.  Merchants'  Fire  Ins.  Co.,  9  How.  (U.  S.) 
390;  State  Mut.  Fire  Ins.  Ass'n  v.  Brinkley  Stave  &  Heading  Co.,  61 
Ark.  1,  29  L.  R.  A.  712;  Schultz  v.  Phenix  Ins.  Co.,  77  Fed.  375 
(negotiations  by  telegraph);  Myers  v.  Keystone  Mut.  Life  Ins.  Co., 

27  Pa.  St.  268;  Sandfcrd  v.  Trust  Fire  Ins.  Co.,  11  Paige  (N.  Y.), 
547;  Wallingford  v.  Home  Mut.  F.  &  M.  Ins.  Co.,  30  Mo.  46;  Dailey 
V.  Preferred  Masonic  Mut.  Ace.  Ass'n,  102  Mich.  289,  57  N.  W.  184; 


§  40  CONSUMMATION  OF  CONTRACT.  85 

The  Execution  of  the  Policy  —  Countersigning. 

A  policy,  to  be  binding  upon  an  insurer,  must  be  executed 
by  duly  authorized  officers  or  agents  and  in  the  manner  pro- 
vided by  the  organic  law  of  the  corporation.  A  seal  is  not 
necessary  unless  the  insurer  can  only  bind  itself  by  sealed 
written  contracts.  If  a  delivered  policy  is  defectively  ex- 
ecuted, its  proper  execution  will  be  compelled  if  that  be 
necessary  to  carry  out  the  intention  of  the  parties  and  to 
establish  the  contractual  relations  upon  which  they  have 
agreed.  This  can  be  done  in  an  action  for  specific  perform- 
ance of  the  oral  agreement,  or  by  a  suit  to  reform  the  policy, 
according  to  the  given  circumstances,  and  in  either  of  these 
proceedings  the  courts  will  grant  appropriate  equitable  relief, 
and  at  the  same  time,  if  a  loss  has  occurred,  will  enforce  the 
contract  as  perfected.''^  ^ 

Policies  frequently  provide  that  they  shall  not  be  valid  or 
binding  upon  the  insurer  unless  signed  by  designated  officers 
and  countersigned  by  the  agent  through  whom  they  are  issued. 
There  can  be  no  doubt  of  the  right  of  any  insurance  company 
to  thus  create  conditions  precedent  to  the  validity  of  its  poli- 
cies and  to  their  assumption  of  a  risk  through  the  issuance 
of  a  policy;  and  as  an  insured  is  conclusively  presumed  to 
know  the  contents  and  conditions  of  a  policy  imder  which  he 
claims,  he  is  held  to  have  notice  thereof  and  of  any  limitations 
they  make  upon  the  powers  of  agents.  It  is  accordingly  held 
that  a  recital  in  the  policy  itself  that  it  shall  not  be  in  force 
until  countersigned  by  an  authorized  agent  renders  the  policy 

Yonge  V.  Equitable  Life  Assur.  Soc,  30  Fed.  902;   Hartford  S.  B.  I. 
&  Ins.  Co.  V.  Lasher  Stocking  Co.,  66  Vt.  439. 

="Ante,  pp.  51-60,  §§  32,  33,  "Specific  Performance,"  notes  30--33; 
post,  "Reformation;"  Hamilton  v.  Lycoming  Mut.  Ins.  Co.,  5 
Pa.  St.  344;  Mitchell  v.  Union  Life  Ins.  Co.,  45  Me.  104;  Herron  v. 
Peoria  M.  &  F.  Ins.  Co.,  28  111.  235. 


86  THE   CONTRACT — MAKING.  §40 

incomplete  and  invalid  till  so  countersigned.^^  But  such 
a  stipulation  does  not  prevent  an  authorized  agent  from 
making  a  valid  agreement  to  execute  and  deliver  a  policy  in  the 
usual  form.^^  It  seems  that  countersigning  may  sometimes 
be  waived  by  an  agent  if  an  intention  to  issue  the  policy  as 
a  complete  contract  without  such  countersigiiing  be  shown;  ^^ 
but  mere  possession  of  a  policy  stating  on  its  face  that  it  is 
not  to  take  effect  until  signed  by  the  agent,  and  which  is  not 
so  countersigned,  is  no  evidence  that  the  policy  was  ever  de- 
livered with  such  intention ;  ^^^  and  the  power  of  an  agent  to 
waive  such  a  provision  is  not  beyond  question.^^ 

The  Premium. 

The  premium  is  the  consideration  moving  to  the  insurer 
for  its  assumption  of  a  risk.  A  contract  of  insurance  is  not 
complete  until  the  amount  of  the  premium  is  agreed  upon. 
It  is  not  necessarily  payable  in  advance.     In  the  absence  of 

^^Hardie  v.  St.  Louis  Mut.  Life  Ins.  Co.,  26  La.  Ann.  242;  Noyes 
V.  Phoenix  Mut.  Life  Ins.  Co.,  1  Mo.  App.  584;  Badger  v.  American 
Popular  Life  Ins.  Co.,  103  Mass.  244;  McCully's  Adm'r  v.  Plioenix 
Mut.  Life  Ins.  Co.,  18  W.  Va.  782;  Confederation  Life  Ass'n  v. 
O'Donnell,  10  Can.  Sup.  Ct.  92;  Peoria  M.  &  F.  Ins.  Co.  v.  Walser,  22 
Ind.  73;  Security  Ins.  Co.  v.  Fay,  22  Mich.  467,  7  Am.  Rep.  670;  Wil- 
kins  V.  State  Ins.  Co.,  43  Minn.  177;  Grady  v.  American  Cent.  Ins. 
Co.,  60  Mo.  116. 

''Ante,  §§  29,  30. 

"Myers  v.  Keystone  Mut.  Life  Ins.  Co.,  27  Pa.  St.  268;  Kautreuer 
V.  Penn  Mut.  Life  Ins.  Co.,  5  Mo.  App.  581;  Union  Ins.  Co.  v.  Smart, 
60  N.  H.  458;  Hibemia  Ins.  Co.  v.  O'Connor,  29  Mich.  241;  Norton 
V.  Phoenix  Mut.  Life  Ins.  Co.,  36  Conn.  503;  German  Fire  Ins.  Co. 
V.  Laggart,  47  Kan.  663. 

"*  Prall  V.  Mutual  Protection  Life  Assur.  Soc,  5  Daly  (N.  Y.)» 
298;  Badger  v.  American  Popular  Life  Ins.  Co.,  103  Mass.  244. 

''Wilkins  v.  State  Ins.  Co.,  43  Minn.  177.  And  see  Security  Ins. 
Co.  V.  Fay,  22  Mich.  467;  Lynn  v.  Burgoyne,  13  B.  Mon.  (Ky.)  400; 
Confederation  Life  Ass'n  v.  O'Donnell,  10  Can.  Sup.  Ct.  92;  Mc- 
Cully's Adm'r  v.  Phoenix  Mut.  Life  Ins.  Co.,  18  W.  Va.  782. 


A 


§  47  DELIVERY   OF    POLICY.  87 

any  agreement  concerning  the  time  of  payment  of  tlie  pre- 
mium and  where  no  custom  or  usage  to  the  contrary  is  shown, 
the  presumption  is  that  the  attaching  of  the  risk  and  the  pay- 
ment of  the  premium  were  intended  to  be  coincident.^* 

Same  —  Delivery  of  Policy. 

§  47.  Delivery  may  be  actual  or  constructive,  absolute  or 
conditional.  A  policy  becomes  a  binding  con- 
tract — 

(a)  When  executed  pursuant  to  an  agreement  where- 

by an  insurer  accepts  a  risk,  and 

(b)  The  execution  is  intended  as  the  final  evidence  of 

an  acceptance  of  the  risk,  and 

(c)  Nothing  further  is  required  to  be  done  by  the  in- 

sured to  signify  his  adoption  of  it. 
The  delivery  is  complete  whenever  it  is  the  intent  of  the  par- 
ties that  the  policy  shall  become  operative. 

Generally.  x\ctual  delivery  of  an  insurance  policy  to  the 
insured  is  not  essential  to  either  its  validity  or  completeness 
as  a  contract  of  insurance  unless  expressly  made  so  by  the 
preliminary  negotiations  of  the  insured  and  the  insurer,  or  by 
the  terms  of  the  policy  itself.  The  policy,  as  such,  comes  into 
existence  at  the  moment  it  is  executed  by  the  insurer.  The 
contract  is,  as  we  have  seen,  complete  when  the  proposals  of  the 
one  party  have  been  accepted  by  the  other,  and  the  acceptance 
has  been  signified  by  some  proper  act.  The  proposal  and  ac- 
ceptance may  be  oral,  or  written,  or  partly  oral  and  partly 
written.  Taken  together  they  may  constitute  a  contract  of 
insurance  in  praesenti  to  be  evidenced  by  the  execution  and  de- 
livery of  a  policy  in  fidiiro;  or  they  may  amount  to  no  more 
than  an  agreement  of  the  insurer  to  assume  the  risk  as  soon  as 
a  policy  is  executed  and  before  it  is  delivered ;  or  they  may 
constitute  an  executory  contract  to  insure  upon  the  delivery 

'•  Post,  §  48,  c.  6,  10. 


88  THE   CONTRACT  —  MAKING.  §  47 

to  and  acceptance  of  tlie  policy  by  the  insvired.  The  funda- 
mental question  to  be  determined  is,  what  was  the  real  under- 
standing of  the  parties  and  when  did  thej  agree  and  intend 
the  policy  would  go  into  effect.^'^ 

The  burden  is  upon  a  claimant  to  establish  the  assumption 
of  the  risk  before  the  delivery  of  a  policy  by  clear  proof  ;^^ 
whereas  the  possession  of  a  policy  by  an  insured  is  in  itself 
evidence  of  the  completion  of  the  contract.  Where  there  is 
no  oral  contract  of  insurance,  and  no  contract  contemplated 
except  upon  the  delivery  of  the  policy  and  payment  of  the 
premium,  the  relation  of  insurer  and  insured  is  not  established 
until  the  policy  is  delivered  and  the  premium  is  paid.^'"' 
When  there  is  nothing  to  show  the  manual  possession  of  the 
policy  in  such  a  case,  the  contract  is  prima  facie  incomplete 
as  a  contract;  and  the  burden  is  upon  him  who  asserts  it  to 
show  that  the  real  intention  and  understanding  of  the  parties 
was  to  pass  the  legal  title  and  possession  without  delivery 
in  fact,  and  to  account  for  the  circumstance  that  the  policy 
has  not  been  put  into  his  possession,  as  contracts  of  that  kind 
usually  are  when  completely  executed,  or  in  other  words  to 
show  constructive  possession.  But  this  only  goes  to  the  ques- 
tion  of   evidence.     Constructive   delivery   and   constructive 

"Chamberlain  v.  Prudential  Ins.  Co.  (Wis.),  85  N.  W.  128;  New 
York  Life  Ins.  Co.  v.  Babcock,  104  Ga.  67,  42  L.  R.  A.  88;  Newark  Ma- 
chine Co.  V.  Kenton  Ins.  Co.,  50  Ohio  St.  549,  22  L.  R.  A.  768;  Yonge 
V.  Equitable  Life  Assur.  See,  30  Fed.  902;  Lorscher  v.  Supreme 
Lodge  K.  H.,  72  Mich.  316,  2  L.  R.  A.  206;  Bishop  v.  Grand  Lodge, 
112  N.  Y.  627;  Mut.  Life  Ins.  Co.  v.  Young's  Adm'r,  23  Wall.  (U.  S.) 
85;  Hubbard  v.  Hartford  Fire  Ins.  Co.,  33  Iowa,  325;  Franklin  Ins. 
Co.  V.  Colt,  20  Wall.  (U.  S.)  560;  Piedmont  &  A.  Life  Ins.  Co.  v. 
Ewing,  92  U.  S.  377;  Home  Forum  Ben.  Order  v.  Jones,  5  Okla.  598, 
50  Pac.  165. 

^Ante,  c.  Ill,  note  19. 

="  Wainer  v.  Milford  Mut.  Fire  Ins.  Co.,  153  Mass.  335,  11  L.  R.  A. 
598;  Myers  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  121  Mass.  338. 


§  47  DELIVEKT    OF    POLICY.  89 

possession,  if  proved,  are  sufficient.  A  delivery  may  be 
"actual,  that  is  by  doing  something  and  saying  nothing,  or 
verbal,  that  is  by  saying  something  and  doing  nothing,  or  it 
may  be  by  both.  But  it  must  be  by  something  answering  to 
one  or  the  other  or  both  of  tliese,"  and  with  an  intent  to  give 
effect  to  the  policy.'*'^ 

When  an  application  has  been  made,  approved,  and  ac- 
cepted, and  a  policy  prepared  and  executed,  and  a  notice  of 
such  execution  given  to  the  insured,  as,  for  example,  by  mailing- 
it  to  him,  the  contract  of  insurance  is  complete,  and  the  appli- 
cant is  entitled  to  the  policy.  Then  the  offer  of  the  one  has  been 
accepted  by  the  other,  the  minds  of  the  parties  have  met,  and 
nothing  further  is  needed  to  secure  to  the  applicant  the  in- 
demnity for  which  he  applied  and  which  the  insurer  has 
consented  to  furnish  him.  An  actual  execution  and  a  substi- 
tuted delivery  of  the  policy  has  been  effected.  A  physical 
transmission  of  the  policy  would  not  enlarge — except  so  far 
as  the  matter  of  proof  !s  concerned — nor  does  its  absence 
diminish,  his  rights. ^^ 

Actual  Delivery. 

Where  actual  delivery  is  by  the  terms  of  the  contract  a  con- 
dition precedent  to  the  attaching  of  the  risk,  the  liability  does 

^''Markey  v.  Mutual  Ben.  Life  Ins.  Co.,  103  Mass.  92;  Phoenix 
Assur.  Co.  V.  McAuthor,  116  Ala.  659,  22  So.  900;  Heiman  v.  Phrenix 
Mut.  Life  Ins.  Co.,  17  Minn.  153  (Gil.  127) ;  Morrison  v.  North  Amer- 
ican Ins.  Co.,  64  N.  H.  137;  Merchants'  Ins.  Co.  v.  Union  Ins.  Co.,  162 
111.  173,  and  cases  supra. 

*"  Sheldon  v.  Connecticut  Mut.  Life  Ins.  Co.,  25  Conn.  207;  Shat- 
tuck  V.  Mutual  Life  Ins.  Co.,  4  Cliff.  598,  Fed.  Cas.  No.  12,715: 
Lorscher  v.  Supreme  Lodge  K.  H.,  72  Mich.  316,  2  L.  R.  A.  206; 
Bishop  V.  Grand  Lodge,  112  N.  Y.  627;  Tayloe  v.  Merchants'  Fiie 
Ins.  Co.,  9  How.  (U.  S.)  390;  Dailey  v.  Preferred  Masonic  Mut.  Ace. 
Ass'n,  102  Mich.  289.  57  N.  W.  184.  26  L.  R.  A.  171;  Tennant  v. 
Travellers'  Ins.  Co.,  31  Fed.  322. 


90  THE   CO^'TKACT — MAKING.  §47 

not  attach  until  tlie  condition  is  met.  The  executory  contract 
to  issue  and  deliver  a  policy  may  still  exist  and  remain  valid 
and  enf orcible ;  but  ihe  policy  as  such  has  not  become  a  con- 
tract until  all  conditions  precedent  created  either  by  the  pre- 
limir  ary  contract  or  by  the  very  terms  of  the  policy  itself  have 
been  fully  complied  ^vi"h  or  effectually  waived.^^  And  the 
delivery  must  be  absolute  and  intended  to  divest  the  insurer  of 
any  right  of  control  over  the  policy  as  well  as  to  convey  to  the 
insured  absolute  dominion  over  it.  The  general  rule  is  that 
where  a  policy  is  to  go  into  effect  only  upon  its  delivery,  it  does 
not  become  effectual  until  it  is  delivered  by  the  insurer  to  the 
insured  or  some  one  acting  on  his  behalf  with  the  mutual 
understanding  that  it  shall  thereupon  take  effect.  Manual 
possession  by  the  assured  is  not  indispensable.^^  But  the 
mutual  understanding  and  intention  is  necessary,  and  the 
transaction  must  be  had  with  the  insured  or  someone  author- 
ized to  act  for  him  in  the  matter.^^ 

Possession  of  a  policy  is  only  presumptive  evidence  of  its 
legal  delivery.     Thus  in  Badger  v.  American  Popular  Life 

*=  Cases  supra;  Kohen  v.  Mutual  Reserve  Fund  Life  Ass'n,  28  Fed, 
705;  Misselhorn  v.  Mutual  Reserve  Fund  Life  Ass'n,  30  Fed.  545; 
McClave  v.  Mutual  Reserve  Fund  Life  Ass'n,  55  N.  J.  Law,  187; 
Harnickell  v.  New  York  Life  Ins.  Co.,  Ill  N.  Y.  390;  Yonge  v.  Equi- 
table Life  Assur.  Soc,  30  Fed.  902;  Myers  v.  Liverpool  &  L.  &  G.  Ins. 
Co.,  121  Mass.  338. 

«  Brown  v.  American  Cent.  Ins.  Co.,  70  Iowa,  390,  30  N.  W.  647; 
New  York  Life  Ins.  Co.  v.  Babcock,  104  Ga.  67,  42  L.  R.  A.  88; 
Schwartz  v.  Germania  Life  Ins.  Co.,  21  Minn.  215;  Morrison  v.  In- 
surance Co.  of  North  America,  64  N.  H.  137;  Tennant  v.  Travellers" 
Ins.  Co.,  31  Fed.  322;  Hodge  v.  Security  Ins.  Co.,  33  Hun  (N.  Y.), 
583;  Stebbins  v.  Lancashire  Ins.  Co.,  60  N.  H.  65;  Hoyt  v.  Mutual 
Ben.  Life  Ins.  Co..  98  Mass.  539. 

"Stebbins  v.  Lancashire  Ins.  Co.,  60  N.  H.  65;  Millville  Mut.  F. 
&  M.  Ins.  Co.  V.  Collerd,  38  N.  J.  Law,  480;  Heiman  v.  Phognix  Mut. 
Life  Ins.  Co.,  17  Minn.  153  (Gil.  127) ;  Hawley  v.  Michigan  Mut.  Life 
Ins.  Co.,  92  Iowa,  593,  61  N.  W.  201;  post,  c.  8,  "Agents." 


§  47  DELIVERY    OF   POLICY.  91 

Co./^  it  ^Yas  held  that  a  policy  of  life  insurance  which  pro- 
vided that  it  should  not  be  in  force  until  countersigned  by 
"A.  B.  agent"  was  invalid  till  so  countersigned,  although  A.  B. 
himself  was  the  assured  and  the  policy  had  been  received  and 
retained  by  him,  there  being  no  evidence  of  waiver. 

Whether  given  occurrences  and  dealings  with  a  policy  are 
sufficient  to  constitute  an  actual  delivery  understood  by  both 
parties  to  pass  the  title  in  a  policy  to  the  insured  is  to  be  de- 
termined as  a  question  of  fact.  In  Markey  v.  Mutual  Bene-' 
fit  Life  Ins.  Co.,^^  the  question  for  determination  was  whether 
there  was  an  actual  or  constructive  delivery  of  the  policy. 
The  facts  were:  The  husband  was  ill.  The  agent  went  to  his 
house,  taking  the  policy  with  him.  He  passed  it  to  the  hus- 
band, saying  he  had  brought  him  his  policy.  The  hus- 
band said  he  was  glad  of  it,  he  had  been  expecting  it  for 
some  days  past.  He  took  it,  read  it  over,  handed  it  to  his 
wife,  saying,  "there  is  your  policy."  She  took  it,  glanced  it 
over,  and  laid  it  upon  the  table.  The  husband  told  the  agent 
"that  he  was  not  well  enough  to  go  out  and  get  the  'money  to 
pay  for  the  policy ;  that  he  had  made  an  arrangement  with  B. 
to  get  the  money  and  pay  it  to  him."  The  agent  said  "he 
would  go  directly  to  B.  and  get  the  money  for  the  policy," 
When  he  started  to  go  the  wife  took  the  policy  from  the  table 
and  passed  it  to  him,  saying,  "If  you  are  going  to  B.  for  the 
money  you  may  need  the  policy,  and  may  as  well  take  it  and 
leave  it  with  him."  He  took  the  policy.  The  wife's  idea  in 
giving  it  to  him  was  that  B.  would  want  to  see  the  amount  he 
was  to  pay.  Upon  learning  the  policy  had  not  been  delivered 
to  B.  insured  tendered  the  premium.     It  was  held  that  the 

"103  Mass.  244;  Prall  v.  Mutual  Life  Protection  Assur.  Soc,  5 
Daly  (N.  Y.),  298;  Davis  v.  Massachusetts  Mut.  Life  Ins.  Co.,  la 
Blatchf.  462.  Fed.  Cas.  No.  3,642. 

*'  103  Mass.  78,  118  Mass.  178. 


92  THE   CONTRACT  —  MAKING.  §47 

evidence  was  insufficient  to  warrant  a  finding  tliat  tlie  policy 
liad  been  delivered  so  as  to  make  it  a  completed  and  binding 
contract. 

Constructive  Delivery. 

A  constrnctive  delivery  may  be  sufficient  if  evidenced  by 
any  act  intended  to  signify  that  tlie  instrument  shall  have 
present  vitality,  as  where  an  application  is  accepted  and  a 
policy  issued  but  never  placed  in  the  possession  of  the  in- 
sured.''^ 

Delivery  to  Insurer's  Agent. 

In  determining  whether  a  policy  was  delivered,  effect  must 
always  be  given  to  the  intention  of  the  parties,  and  what  their 
conduct  shows  they  considered  a  delivery  must  control.  When 
the  terms  of  an  executed  contract  have  been  accepted  by  the  in- 
sured, and  the  parties  have  thereafter  treated  it  as  in  force,  its 
delivery  will  be  regarded  as  complete  although  it  never  passed 
out  of  the  hands  of  the  agent  of  the  insurer.  And  the  delivery 
by  an  insurer  to  its  agent  of  a  policy  to  be  unconditionally  de- 
livered by  him  to  an  insured,  is  in  contemplation  of  laAv  a 
delivery  to  the  insured,  even  though  its  delivery  to  the  appli- 
cant is  by  the  policy  made  essential  to  its  validity. ^^     And  in 

"Fried  v.  Royal  Ins.  Co.,  47  Barb.  (N.  Y.)  127;  Newark  Machine 
Co.  V.  Kenton  Ins.  Co.,  50  Ohio  St.  549,  22  L.  R.  A.  768;  Schwartz  v. 
Germania  Life  Ins.  Co.,  21  Minn.  215;  Sheldon  v.  Connecticut  Mut. 
Life  Ins.  Co.,  25  Conn.  207;  Lorscher  v.  Supreme  Lodge  K.  H.,  72 
Mich.  316,  2  L.  R.  A.  206.  See,  also,  Heiman  v.  Phoenix  Mut.  Life 
Ins.  Co..  17  Minn.  153  (Gil.  127) ;  Union  Cent.  Life  Ins.  Co.  v.  Pauly, 
S  Ind.  App.  85,  35  N.  E.  190. 

^*  Newark  Machine  Co.  v.  Kenton  Ins.  Co..  50  Ohio  St.  549,  22  L. 
R.  A.  768;  New  York  Life  Ins.  Co.  v.  Babcock,  104  Ga.  67,  42  L.  R. 
A.  88;  Mutual  Life  Ins.  Co.  v.  Thomson,  94  Ky.  253;  Kentucky  Mut. 
Ins.  Co.  V.  Jenks,  5  Ind.  96;  Kelly  v.  St.  Louis  Mut.  Life  Ins.  Co., 
3  Mo.  App.  554. 


g  47  .  DELIVERY    OF    POLICY. 


93 


such  case  tlie  agent  cannot  refuse  to  deliver  the  policy  to  the 
assured  upon  tender  of  the  premium  even  though  the  risk 
has  become  undesirable,  as  where  the  risk  is  on  a  life,  and 
before  the  arrival  of  the  policy  the  applicant  has  become 
dangerously  ill.^^  In  Dibble  v.  Northern  Assurance  Co.,^*^ 
the  plaintiff  had  for  several  years  before  the  policy  in  suit 
was  issued,  placed  his  insurance  with  defendant's  agent  with 
authority  to  keep  his  property  insured  in  such  companies  as 
he  (the  agent)  might  select,  and  to  renew  his  policies  when- 
ever necessary.  The  agent  placed  certain  risks  in  the  S. 
company  which  afterwards  directed  their  cancellation. 
These  policies  were  cancelled  by  the  agent  who  thereupon 
placed  the  risks  in  defendant  company,  issued  a  policy  and 
placed  it  in  his  safe  for  plaintiff,  charged  plaintiff  and 
credited  defendant  with  the  premium  and  notified  both.  This 
was  held  a  sufficient  delivery.  And  so  where  the  original 
agreement  between  the  applicant  and  the  agent  vras  that  the 
latter  should  keep  the  policy  when  executed  for  the  use  and 
benefit  of  the  former;  ^^  and  where  the  policy  is  redelivered 
to  the  agent  to  be  kept  by  him  with  other  papers  of  the  in- 
sured ;^2  and  where  after  being  notified  of  the  issuance  of  the 
policy  the  insured  left  it  uncalled  for  in  the  hands  of  the 
agent  ;^^  and  where  a  renewal  receipt  was  retained  by  the 
agent  at  request  of  the  insured.^-*     Where  the  application  stip- 


'°  Schwartz  v.  Germania  Life  Ins.  Co.,  21  Minn.  215;  Porter  v. 
Mutual  Life  Ins.  Co.,  70  Vt.  504,  41  Atl.  970;  Southern  Life  Ins.  Co. 
V.  Kempton,  56  Ga.  339;  Yonge  v.  Equitable  Life  Assur.  Soc,  30  Fed. 
902. 

="70  Mich.  1,  37  N.  W.  704;  Hamm  Realty  Co.  v.  New  Hampshire 
Fire  Ins.  Co.,  80  Minn.  139,  83  N.  W.  41;  post,  notes  78,  79. 

'1  Franklin  Ins.  Co.  v.  Colt,  20  Wall.  (U.  S.)   560. 

'2  Phoenix  Ins.  Co.  v.  Meier.  28  Neb.  124,  44  N.  W.  97. 

='  Phoenix  Assur.  Co.  v.  McAuthor,  116  Ala.  659,  22  So.  903. 

"Tennant  v.  Travellers'  Ins.  Co.,  31  Fed.  322. 


^4  THE   CONTRACT MAKING.  §  47 

nlates  tliat  tlie  agent  of  tlie  company  tvIio  forwards  it  shall 
act  for  both  parties,  delivery  of  the  policy  to  him  perfects  the 
contract.^^  But  the  mere  assumption  of  authority  to  act  on 
behalf  of  the  assured  is  not  enough — the  agent  must  derive 
the  power  from  his  principal.^®  Thus  a  policy  written  and 
intended  as  a  substitute  for  another  policy  in  another  com- 
pany, but  not  deliveied  and  of  which  the  insured  has  no 
laiowledge  until  after  the  property  has  been  destroyed,  is  not 
a  binding  contract.^'^  A  general  insurance  agency,  which 
represents  several  companies  with  authority  to  execute,  issue 
and  cancel  policies  for  them  all  in  proper  cases,  may  also  act 
as  agent  of  an  insured  in  waiving  notice  of  cancellation  of 
policies  issued  by  any  such  companies,  and  in  accepting  for 
the  insured  new  policies  issued  by  itself  in  lieu  of  those  can- 
celed.^* 

Delivery  by  Mail. 

A  contract  is  complete  when  an  application  has  been  ac- 
cepted and  a  policy  execu+ed  and  deposited  in  the  mail,  post- 
age prepaid,  addressed  to  the  applicant,  with  intent  to  have 
it  take  immediate  effect,'^®  and  so  if  it  be  properly  mailed  to 
the  agent  of  the  insurer  for  unconditional  delivery  to  the  in- 
sured.^^     It  is  immaterial  that  the  policy  does  not  reach 

*»  Alabama  Gold  Life  Ins.  Co,  v.  Herron,  56  Miss.  643. 

"  See  post,  c.  8. 

"  Stebbins  v.  Lancashire  Ins.  Co.,  60  N.  H.  65.  See  Dibble  v. 
Northern  Assur.  Co.,  70  Mich.  1,  37  N.  W.  704;  Merchants'  Ins.  Co. 
V.  Union  Ins.  Co..  162  III.  173. 

'^  Hamm  Realty  Co.  v.  New  Hampshire  Firs  Ins.  Co.,  80  Minn.  139, 
83  N.  W.  41. 

"Northampton  Mut.  Ins.  Co.  v.  Tuttle,  40  N.  J.  Law,  476;  Dailey 
V.  Preferred  Masonic  Mut.  Ace.  Ass'n,  102  Mich.  289,  57  N.  W.  184, 
26  L.  R,  A.  171;  Yonge  v.  Equitable  Life  Assur.  Soc,  30  Fed.  902. 

'"Kentucky  Mut.  Ins.  Co.  v.  Jenks,  5  Ind.  96;  Porter  v.  Mutual  Life 
Ins.  Co.,  70  Vt.  504,  41  Atl.  970;  ante,  note  4S. 


I  47  DELIVERY    OF    POLICY, 


95 


either  tlie  Insured,*'^  or  the  agent,^^  ^in  rjfter  a  loss  has 
occurred,  or  that  the  policy  provides  that  it  shall  not  be  in 
force  until  its  delivery  to  the  applicant  "during  his  life  and 
good  health."  *^2 

Stipulations  in  Application  or  Policy  Eequiring  Delivery. 

A  stipulation  or  condition  in  either  an  application  or  a 
policy  that  the  contract  shall  not  take  effect  until  a  policy  is 
actually  delivered  to  the  applicant  creates  a  valid  condition 
precedent  to  the  consummation  of  the  contract,  and  the  condi- 
tion must  be  either  performed  or  vraived  before  the  policy 
becomes  operative.^^  A  waiver  takes  place  when  the  policy 
is  delivered  by  the  insurer  itself  ^^  or  through  an  agent  with 
authority  to  bind  it  by  such  an  act.^^ 

Conditional  Delivery. 

A  policy  may  be  delivered  conditionally,  in  which  case 
liability  does  not  attach  until  the  condition  has  been  met  or 
performed.  An  absolute  and  unconditional  delivery  does  not 
occur  until  there  is  a  transfer  of  the  legal  possession  of  the 
policy  to  the  insured  or  to  some  person  acting  for  him  with 

*'  Dailey  v.  Preferred  Masonic  Mut.  Ace.  Ass'n,  102  Midi.  289,  57 
N.  W.  184.  26  L.  R.  A.  171. 

"-  Kentucky  Mut.  Ins.  Co.  v.  Jenks.  25  Ind.  96. 

"'  Mutual  Reserve  Fund  Life  Ass'n  v.  Farmer,  65  Ark.  581,  47  S.  "W. 
850. 

"See  ante,  note  42;  Chamberlain  v.  Prudential  Ins.  Co.  (Wis.), 
85  N.  W.  128;  Schaffer  v.  Mutual  Fire  Ins.  Co.,  89  Pa.  St. 
296;  Badger  v.  American  Popular  Life  Ins.  Co.,  103  Mass.  244;  Or- 
mond  V.  Fidelity  Life  Ass'n,  96  N.  C.  158;  McCully's  Adm'r  v. 
Phoenix  Mut.  Life  Ins.  Co..  18  W..  Va.  782. 

•°  Mutual  Reserve  Fund  Life  Ass'n  v.  Farmer,  65  Ark.  581,  47 
S.  W.  850;  Dailey  v.  Preferred  Masonic  Mut.  Ace.  Ass'n,  102  Mich. 
289,  57  N.  W.  184,  26  L.  R.  A.  171. 

""Post,  c.  8,  "Agents;"  post,  c.  18,  "Waiver  and  Estoppel;"  Con- 
necticut Ind.  Ass'n  v.  Grogan's  Adm'r  (Ky.),  52  S.  W.  959. 


96  THE    CONTRACT — MAKING.  §47 

tlie  intent  to  give  effect  to  the  policy  as  a  completed  contract. 
Thns  the  exliibition  of  a  policy  to  an  applicant,  or  his  tem- 
porary possession  of  the  same  while  reading  it,  followed  by 
its  return  to  the  agent  constitute  only  a  conditional  delivery  ;^^ 
and  likewise  the  delivery  of  a  policy  upon  the  agreement  that 
it  was  issued  only  as  a  substitute  for  a  previous  policy  which 
Avas  to  be  surrendered,  and  wdiich  never  was  surrendered  but 
enforced  and  paid;^^  and  where  the  absolute  delivery  is  de- 
pendent upon  the  approval  of  an  agent's  act  by  the  insurer 
itself  ;^^  and  where  a  policy  different  from  the  one  requested 
by  an  applicant  is  handed  to  him  with  a  request  that  he  return 
it  if  he  did  not  wish  to  comply  with  its  terms  and  pay  the 
premiums  )'^^  and  wliere  the  attaching  of  the  risk  is  contingent 
upon  the  premium  being  paid  or  some  other  event. ''^^  And 
parol  evidence  is  admissible  to  prove  that  a  policy,  which  is 
in  form  a  complete  contract,  and  of  which  there  has  been  a 
manual  transmission,  was  not  intended  to  and  did  not  become 
a  binding  contract  until  the  occurrence  or  performance  of 
some  condition  precedent  resting  in  parol."^^ 

Delivery  Obtained  by  Fraud. 

An  insured  cannot  recover  upon  a  policy  which  he  has  ob- 
tained through  fraud,  or  misrepresentation,  or  concealment 

"Heiman  v.  Phoenix  Mut.  Life  Ins.  Co.,  17  Minn.  153  (Gil.  127); 
Markey  v.  Mutual  Ben.  Life  Ins.  Co.,  118  Mass.  178,  126  Mass.  158. 

""  Faunce  v.  State  Mut.  Life  Assur.  Co.,  101  Mass.  279. 

"'Nutting  V.  Minnesota  Fire  Ins.  Co.,  98  Wis.  26,  73  N.  W.  432. 

'"Myers  v.  Keystone  Mut.  Life  Ins.  Co.,  27  Pa.  St.  268. 

"^Harnickell  v.  New  York  Life  Ins.  Co.,  Ill  N.  Y.  390;  Ware  v. 
Allen,  128  U.  S.  590;  Mutual  Life  Ins.  Co.  v.  Young's  Adm'r,  23  Wall. 
(U.  S.)  85;  Brown  v.  American  Cent.  Ins.  Co.,  70  Iowa,  390,  30  N.  W. 
647. 

"-Nutting  V.  Minnesota  Fire  Ins.  Co.,  98  Wis.  26,  73  N.  W.  432; 
Shields  v.  Equitable  Life  Assur.  Soc,  121  Mich.  690,  80  N.  W.  793; 
Faunce  v.  State  Mut.  Life  Assur.  Co.,  101  Mass.  279. 


§  47  DELIVERY    OF   POLICY.  97 

of  facts  material  to  the  risk  and  which  he  ought  to  have  com- 
municated to  the  insurer. "^^ 

Loss  After  Agreement  is  Made  but  Before  Policy  is  Delivered. 

Since  an  oral  contract  of  insurance  is  valid  and  enforcible, 
it  follows  that  an  oral  agreement  to  insure  m  praesenti, 
though  contemplating  the  future  execution  and  delivery  of  a 
policy,  protects  the  insured,  and  furnishes  him  the  stipulated 
indemnity  against  loss  or  damage  occurring  before  the  delivery 
of  the  policy.  The  remedy  of  the  insured  in  such  a  case  is 
either  by  an  action  at  law  upon  the  oral  contract  of  insurance, 
or  by  a  proceeding  in  equity  to  compel  the  execution  of  the 
contract,  and  to  recover  upon  it  as  thus  executed,  or  by  an 
action  for  breach  of  contract  to  insure,  according  to  the  cir- 
cumstances.'^^ Whether  there  was  an  oral  contract  of  in- 
surance to  become  operative  at  once,  or  simply  an  executory 
contract  for  insurance  to  become  effectual  upon  the  delivery  of 
a  policy,  must  l)e  determined  according  to  the  rules  already 
laid  down.  If  delivery  be  essential,  it  is  completed  when 
the  policy  has  been  executed,  and  the  insurer  intends  it  to 
become  operative,  and  nothing  further  remains  to  be  done  by 
the  insured  to  signify  his  acceptance  of  it.'''^  Until  that 
time  the  insurer  is  not  liable.'^^ 

Where  an  insurer  has  agreed  to  give  written  consent  to  a 
transfer  of  one  of  its  policies  upon  given  conditions  Avhich 
have  been  performed,  and  the  policy  has  been  forwarded  to 
it  for  indorsement,  it  is  bound  by  the  transfer,  and  estopped  to 

"Wales  V.  New  York  Bowery  Fire  Ins.  Co.,  37  Minn.  106;  Pied- 
mont &  A.  Life  Ins.  Co.  v.  Ewing,  92  U.  S.  377;  Cable  v.  United 
States  Life  Ins.  Co.,  Ill  Fed,  19. 

"Ante,  §§  30-33. 

"*  Ante,  p.  88. 

''Allen  V.  Massachusetts  Mut.  Ace.  Ass'n,  167  Mass.  18,  44  N.  E. 
1053;  Lightbody  v.  North  American  Ins.  Co.  23  Wend.  (N.  Y.)  18. 
Compare  Cooke  v.  Aetna  Ins.  Co.,  7  Daly  (N.  Y.),  555. 

KERR,  INS.— 7 


98  THE    CONTKACT MAKING,  §  47 

dispute  its  validity  though  a  loss  occurred  before  the  policy 
has  been  received  or  the  indorsement  made  J '^  When  an  ap- 
plication for  insurance  is  made  to  an  agent  representing  sev- 
eral companies,  the  agent  to  select  the  companies  and  distrib- 
ute the  risks,  a  valid  contract  of  insurance  is  made  with  each 
company  as  soon  as  its  policy  is  signed,  although  the  property 
insured  is  destroyed  by  fire  before  the  policies  are  delivered. 
In  distributing  the  risks  the  agent  is  acting  for  the  insured. '^^ 
But  if  the  agent  under  such  circumstances  is  not  authorized 
by  the  applicant  to  select  the  companies,  no  contractual  rela- 
tion exists  between  the  applicant  and  any  insurer  until  a 
policy  has  been  executed  and  delivered  and  accepted. '^^  In  a 
Missouri  case  it  appeared  that  an  application  was  made  and 
accepted  February  9th  and  the  policy  immediately  made  out, 
but  the  premium  was  not  paid  nor  the  policy  delivered  until 
March  14th.  At  the  time  of  the  delivery  the  property  was  on 
fire,  which  fact  was  known  to  the  insured  but  not  to  the  com- 
pany. It  was  held  that  the  contract  was  completed  on 
February  9th  and  that  the  insured  was  not  bound  to  disclose 
the  conditions  existing  when  he  obtained  the  policy.^''  In 
the  absence  of  an  oral  agreement  for  insurance  the  risk  does 
not  attach  until  delivery  of  the  policy  although  the  pohcy  has 
been  executed  and  the  applicant  has  been  notified  that  it  is 
ready  for  him.^^     An  insurance  company  which  on  September 

"Medearis  v.  Anchor  Mut.  Fire  Ins.  Co..  104  Iowa,  88,  73  N.  W. 
495. 

"  Michigan  Pipe  Co.  v.  Michigan  F.  &  M.  Ins.  Co.,  92  Mich.  482,  20 
L.  R.  A.  277.  Compare  New  York  L.  &  W.  W.  Co.  v.  People's  Fire 
Ins.  Co..  96  Mich.  20.  55  N.  W.  434. 

"">  Kleis  V.  Niagara  Fire  Ins.  Co.,  117  Mich.  469,  76  N.  W.  155. 

*°Keim  v.  Home  Mut.  F.  &  M.  Ins.  Co.,  42  Mo.  38;  Hallock  v.  Com- 
mercial Ins.  Co.,  26  N.  J.  Law,  268. 

"  Wainer  v.  Milford  Mut.  Fire  Ins.  Co.,  153  Mass.  335,  11  L.  R.  A. 
598;  Myers  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  121  Mass.  338. 


§  47  DELIVERY   OF   rOLICY.  99 

loth  acknowledges  the  receipt  from  its  agent,  authorized  to 
issue  policies,  of  an  application  made  on  September  11th  for 
insurance  to  begin  September  12th  and  setting  forth  all  the 
terms  of  the  previous  contract  and  which  directs  the  agent  to 
^vrite  out  a  policy  for  the  desired  amount,  is  liable  for  a  loss 
occurring  September  21st,  although  the  agent  writes  out  the 
policy  for  one  year  commencing  September  22d.^2 

Loss  Before  Any  Contract  is  Made  —  Retroactive  PoUcies. 

Policies  are  sometimes  intended  to  have  a  retroactive  effect. 
No  particular  form  of  words  is  necessary  to  make  a  policy 
retroactive.  It  is  sufficient  if  it  appears  by  the  description  of 
the  risk  and  the  subject  inatter  of  thp  contract  that  the  policy 
was  intended  'O  oo\^er  a  previous  loss,  (^cntracts  of  this 
kind  are  a&  valid  as  those  intended  to  cover  a  subseiquent  loss, 
if  the  in.sured.  as  welj  £>,s  the  insuTor  .are' ignorant  of  the  loss 
at  the  time  the  com^&Qt  is  jnade.  But  if  the  property  has 
been  destroyed  before  the  terms  of  the  contract  have  been 
agreed  upon,  and  the  applicant  knows  this  fact  but  does  not 
communicate  it  to  the  insurer  who  accepts  the  risk  and  issues 
an  antedated  policy  in  ignorance  of  the  loss,  the  policy  is  void 
as  to  and  will  not  cover  the  loss,  although  antedated  as  of  a 
time  prior  to  the  loss.^^     Unless  a  binding  contract  of  in- 

*=  Hartford  Fire  Ins.  Co.  v.  King,  106  Ala.  519,  17  So.  707.  See, 
also,  Dailey  v.  Preferred  Masonic  Mut.  Ace.  Ass'n,  102  Mich.  289,  26 
L.  R.  A.  171;  Mutual  Reserve  Fund  Life  Ass'n  v.  Farmer,  65  Ark. 
581,  47  S.  W.  850;  Angell  v.  Hartford  Fire  Ins.  Co.,  59  N.  Y.  171; 
Cooper  V.  Pacific  Mut.  Life  Ins.  Co.,  7  Nev.  116;  Fried  v.  Royal  Ins. 
Co.,  50  N.  y.  243. 

*»  Wales  V.  New  York  Bowery  Fire  Ins.  Co.,  37  Minn.  106;.  Suther- 
land V.  Pratt,  11  Mees.  &  W.  296;  Haskin  v.  Agricultural  Fire  Ins. 
Co.,  78  Va.  700;  Mercantile  Mut.  Ins.  Co.  v.  Folsom,  18  Wall.  (U.  S.) 
237;  Hallock  v.  Commercial  Ins.  Co.,  26  N.  J.  Law,  268;  Collins  v. 
Phoenix  Ins.  Co.,  14  Hun  (N.  Y.),  534;  Cobb  y.  New  England  Mut. 
M.  Ins.  Co.,  6  Gray  (Mass.),  192. 


100 


THE   CONTKACT  —  MAKING. 


§4S 


surance  lias  been  made  before  a  loss^  it  is  not  witliin  the 
power  of  an  agent  to  ratify  an  imperfect  contract  by  issuing 
a  policy  thereafter.^^  The  acceptance  of  an  application 
for  life  insurance  and  the  execution  of  a  policy  after  the 
death  of  the  applicant  and  "without  knowledge  thereof,  fol- 
lowed by  a  deliveiy  of  the  policy  at  the  place  Yv'here  the  de- 
ceased had  resided,  do  not  constitute  a  valid  contract.^^  And 
a  contract  of  insurance  wholly  made  after  the  death  of  the 
ty  intended  to  be  insured,  the  insurer  being  ignorant  of 
that  fact,  is  void,  although  a  policy  be  issued  and  dated  prior 
to  the  death.^^ 

,    .  DjjEATIOK  '  OS'  CoiNTB^CY.  - 

§  48.  The  intent  of  the  parties  as  to  the  commeno'jment  and 
ending  of  the  contract  and  risk  governs,  if  it  can  be  ascertained 
from  the  contract  and  subject  matter  find  riegotiations. 

The  term  of  the  insurance,  that  is  the  period  during  which 
the  liability  of  the  insurer  continues,  its  inception  and  ending, 
is  one  of  the  essentials  of  the  contract.  It  must  be  fixed  by 
the  contract  itself  or  be  inferable  from  the  negotiations  and 
circumstances  surrounding  the  consummation  of  the  con- 
tract.^'^  It  may  by  stipulation  not  commence  until  a  policy 
is  delivered,  or  countersigned  and  delivered,  or  unless  coun- 
tersigned  and  delivered  before  any  material  change  takes 


"Hartford  Fire  Ins.  Co.  v.  McKenzie,  70  111.  App.  615;  Franklin 
Ins.  Co.  V.  Colt,  20  Wall.  (U.  S.)  560;  Stebbins  v.  Lancashire  Ins. 
Co.,  60  N.  H.  65;  People  v.  Dimick,  41-  Hun  (N.  Y.),  616,  107  N.  Y. 
13;  Blake  v.  Hamburg  Bremen  Fire  Ins.  Co.,  67  Tex.  160. 

^'  Misselhorn  v.  Mutual  Reserve  Fund  Life  Ass'n,  30  Fed.  545.  See 
Mutual  Life  Ins.  Co.  v.  Young's  Adm'r,  23  Wall.  (U.  S.)  85;  Pied- 
mont &  A.  Life  Ins.  Co.  v.  Ewing,  92  U.  S.  377. 

*"  Lefavour  v.  Insurance  Co.,  1  Phil.  (Pa.)  558,  2  Bigelow,  Life  &. 
Ace.  Rep.  158. 

"Ante,  §§  17,  40-46. 


I  48  DURATION    OF    CONTRACT.  101 

place  in  tlie  nature  of  the  risk ;  or  it  may  begin  upon  tlie  date 
of  the  application  and  continue  for  a  fixed  period  unless  the 
application  be  sooner  rejected ;  or  the  policy  when  issued  may 
have  a  retroactive  effect  or  be  dated  prior  to  the  day  of  its 
execution  and  cover  risks  which  have  occurred  prior  to  that 
time.  The  intent  of  the  parties  when  ascertainable  should 
control.  ^^ 

The  supreme  court  of  California  has  laid  doAvn  the  follow- 
ing rules  which  contain  both  a  comprehensive  and  succinct 
statement  of  the  law  on  this  point: 

"(1)  Where  the  exact  time  of  the  commencement  and 
termination  of  the  risk  are  specified  in  the  policy,  or,  if  no 
policy  has  been  written,  in  the  contract,  such  specification  gov- 
erns. 

"(2)  Where  no  time  has  been  expressly  indicated,  the  cir- 
cumstances of  the  case  will  be  considered  for  the  purpose  of 
determining  it. 

"(3)  If  "there  are  no  circumstances  indicating  the  inten- 
tion of  the  parties,  and  no  time  is  specified  in  the  contract, 

*'  See  supra.  And  see  Buse  v.  Mutual  Ben.  Life  Ins.  Co.,  23  N.  Y. 
516;  Bradley  v.  Potomac  Fire  Ins.  Co.,  32  Md.  108;  Whittaker  v. 
Farmers'  Union  Ins.  Co.,  29  Barb.  (N.  Y.)  312;  Hallock  v.  Com- 
mercial ins.  Co.,  26  N.  J.  Law,  268;  Commercial  Ins.  Co.  v.  Hallock, 
27  N.  J.  Law,  645;  Lightbody  v.  North  American  Ins.  Co.,  23  Wend. 
(N.  Y.)  IS;  City  of  Davenport  v.  Peoria  M.  &  F.  Ins.  Co.,  17  Iowa, 
276;  American  Horse  Ins.  Co.  v.  Patterson,  28  Ind.  17;  Atlantic  Ins. 
Co.  V.  Goodall,  35  N.  H.  328;  Isaacs  v.  Royal  Ins.  Co.,  39  Law  J. 
Exch.  189;  Atkins  v.  Sleeper,  7  Allen  (Mass.),  487;  Kentucky  Mut. 
Ins.  Co.  V.  Jenks,  5  Ind.  96;  Perry  v.  Provident  Life  Ins.  &  Inv. 
Co.,  99  Mass.  162;  Sherwood  v.  Agricultural  Ins.  Co.,  73  N.  Y.  447; 
Schroeder  v.  Trade  Ins.  Co.,  109  111.  157;  Grousset  v.  Sea  Ins.  Co., 
24  Wend.  (N.  Y.)  209;  Collins  v.  Phcenix  Ins.  Co.,  14  Hun  (N.  Y.), 
534;  Walker  v.  Protection  Ins.  Co.,  29  Me.  317;  Bradlie  v.  Maryland 
Ins.  Co.,  12  Pet.  (U.  S.)  378;  Krumm  v.  Jefferson  Fire  Ins.  Co.,  40 
Ohio  St.  225. 


102  THE    CONTRACT  —  MAKING.  §  48 

the  risk  will  be  deemed  to  liave  commenced  at  the  date  of  the 
contract. 

"(4)  In  the  case  last  mentioned,  if  before  the  contract  of 
insurance  is  made  the  property  has  ceased  to  exist,  although 
unknown  to  the  parties,  the  risk  never  attaches."  ^^ 

The  charging  of  a  full  year's  premium  for  a  policy  of 
reinsurance  in  which  no  dates  are  fixed  is  indicative  of  an  in- 
tention to  reinsure  from  the  date  of  the  original  policy.^®  A 
policy  which  in  terms  begins  upon  a  date  certain  but  contains 
a  stipulation  that  it  shall  not  be  effectual  until  issued  and  de- 
livered, takes  effect  after  it  is  delivered  from  the  date  stated  in 
its  terms  and  not  from  the  date  of  delivery.®^  Liability  for  only 
a  single  year  is  assunied  by  a  company  which  issues  its  policy 
promising  to  pay  a  given  amount  in  ease  of  the  death  of  the 
insured  before  noon  of  a  date  precisely  one  year  from  the  date 
of  the  policy.^ ^  From  the  use  of  the  phrase  "at  12  o'clock 
noon"  it  will  be  presumed  that  the  hour  of  twelve  o'clock 
sun  time  was  intended,  and  the  customary  use  of  standard 
time  at  the  place  of  the  making  of  the  contract  is  not  alone 
sufficient  to  show  that  by  the  custom  of  the  place  this  phrase 
meant  at  twelve  o'clock  standard  time.^^  A  second  benefit  cer- 
tificate issued  to  one  who  had  received  payment  under  a 
former  certificate  which  had  been  canceled,  will  not  relate 
back  to  the  date  of  the  first  certificate,  even  though  it  purports 
to  be  a  "substitute"  for  the  first  one,  so  as  to  cover  death 
resulting  from  injuries  sustained  while  the  first  certificate 

»» Union  Ins.  Co.  v.  American  Fire  Ins.  Co.,  107  Cal.  327,  28  L.  R. 
A.  692. 

""Philadelphia  Life  Ins.  Co.  v.  American  Life  &  Health  Ins.  Co., 
23  Pa.  St.  65. 

*' Gordon  v.  United  States  Casualty  Co.  (Tenn.),  54  S.  W.  98. 

°-  Rosenplaenter  v.  Provident  Sav.  Life  Assur.  Soc,  91  Fed.  728. 

°'  Jones  V.  German  Ins.  Co.,  110  Iowa,  75,  46  L.  R.  A.  860,  81  N.  W. 
188. 


§  48  DURATION    OF    CONTKACT.  103 

was  in  force,  where  tlie  premium  charged  is  different  and  tho 
new  certificate  provides  that  it  does  not  cover  death  in  con- 
sequence of  a  previous  wound  or  injury.^* 
•    A  contract  of  insurance  is  deemed  to  have  been  made  at 
the  date  of  the  policy  notwithstanding  it  provides  for  an  in- 
surance of  the  property  from  a  time  anterior  to  that  date, 
Avhen  it  appears  by  an  express  provision  of  the  application 
upon  whicih  it  was  issued  that  no  liability  should  attach  until 
the  application  should  be  approved  by  the  insurers,  and  that 
such  approval  was  made  on  the  day  the  policy  was  dated.^^ 
A  policy  dated  and  issued  after  a  loss  and  not  made  to  take 
effect  prior  to  its  issue  will  not  support  a  recovery  for  the 
loss  though  there  be  proof  of  an  earlier  parol  agi-eement  to 
insure ;  but  a  valid  parol  contract  for  a  policy  for  one  year, 
made  in  October,  and  providing  for  the  issuing  of  the  policy 
early  in  November,  will  protect  the  applicant  from  damage 
by  a  fire  occurring  November  19th.     The  remedy  is  by  suit 
to  enforce  the  parol  contract.^^     Where  application  for  in- 
surance was  made  to  an  authorized  agent  upon  the  18th  of 
the  month  and  it  was  agreed  that  the  policy  should  be  issued 
on  that  day,  and  the  x)olicy  was  in  fact  issued  on  that  day 
but  was  not  delivered  nor  the  premium  paid  till  the  2 2d, 
it  was  held  that  the  policy  commenced  to  run  on  the  18th.^''' 
In  Parry  v.  Provident  Life  Ins.  &  Inv.  Co.,^^  a  policy  of  in- 

"Wood  V.  Massachusetts  Mut.  Ace.  Ass'n,  174  Mass.  217,  54  N.  E. 
541. 

"Dayo  V.  Hawkeye  Ins.  Co.,  72  Iowa,  597,  34  N.  W.  435. 

^  Home  Ins.  Co.  v.  Adler,  71  Ala.  516,  77  Ala.  242. 

"Hubbard  v.  Hartford  Fire  Ins.  Co.,  33  Iowa,  325. 

»'  99  Mass.  162.  See  Thibeault  v.  St.  Jean  Baptist  Ass'n,  21  R.  I. 
157,  42  Atl.  518.  "From" — "until,"  Isaacs  v.  Royal  Ins.  Co.,  L.  R. 
5  Exch.  296,  22  Law  T.  (N.  S.)  681;  Howard's  Case,  2  Salk.  625;  "be- 
tween" dates,  Atkins  v.  Boylston  F.  &  M.  Ins.  Co.,  5  Mete.  (Mass.) 
439.     See,  also,  2  Parsons,  Contracts  (7tli  Ed.),  pp.  635,  *504,  795- 


104  THE   CONTRACT  —  MAKING.  §48 

surance  "for  tlie  period  of  twelve  montlis"  from  noon  of  the 
day  of  its  date  to  noon  of  the  day  of  its  expiration,  was  made 
"against  loss  of  life"  of  the  assured,  in  a  sum  payable  to  his 
wddow  on  proof  "that  the  assured  at  any  time  after  the  date 
hereof,  and  before  the  expiration  of  this  policy,  shall  have  sus- 
tained personal  injury  caused  by  any  accident,"  "and  such  in- 
juries shall  occasion  death  within  ninety  days  from  the  hap- 
pening thereof."  By  an  accident  which  happened  at  nine 
o'clock  in  the  forenoon,  the  assured  sustained  personal  in- 
juries which  occasioned  his  death  about  the  same  hour  on  the 
ninety-first  day  thereafter,  excluding  the  day  of  date  of  the 
accident  from  the  computation;  the  whole  period  being  in- 
cluded within  the  twelve  months.     It  was  held  that  death 
did  not  occur  within  ninety  days  from  the  happening  of 
accident,   and  that  the  clause  limiting  the  liability  of  the 
insurer  to  the  occurrence  of  death  from  the  injuries  within 
ninety  days  from  the   happening    of    the  accident  was  not 
inconsistent  with  the  provision  by  which  insurance  was  given 
"for  the  period  of  twelve  months,"  nor  did  it  refer  only  to 
such  injuries  as  should  occasion  death  within  ninety  days 
after  the  twelve  months. 

The  acceptance  of  an  application  for  membership  in  a 
mutual  organization  does  not  bind  the  applicant  to  continue 
his  membership  indefinitely.^^  A  contract  of  insurance  is 
terminated  by  an  assignment  for  the  benefit  of  creditors  made 
by  the  insurer  during  the  life  of  the  contract.  ^*^*' 

798,  *662--665;  Protection  Life  Ins.  Co.  v.  Palmer,  81  111.  88;  Liberty 
Hall  Ass'n  v.  Housatonic  Mut.  Fire  Ins.  Co.,  7  Gray  (Mass.),  261. 

«*  Bankers'  Ace.  Ins.  Co.  v.  Rogers,  73  Minn.  12,  75  N.  W.  747. 

"» Smith  V.  National  Credit  Ins.  Co.,  65  Minn.  283,  33  L.  R.  A.  511. 
See  Boston  &  A.  R.  Co.  v.  Mercantile  Trust  &  Deposit  Co.,  82  Md. 
535,  28  L.  R.  A.  97. 


g  4:9  eenewal  of  contkact.  105 

Renewal  of  Contract. 

§49.  A  valid  contract  of  renewal  of  insurance  maybe  made 
"by  parol.  It  must  contain  all  the  essentials  of  a  valid  original 
contract. 

A  parol  agreement  to  renew  an  existing  policy  of  insurance 
is  valid.  It  may  be  made  by  any  agent  who  has  authority  to 
solicit  insurance,  accept  risks,  agree  upon  and  settle  the 
terms  of  insurance,  and  issue  and  renew  policies.  The  pre- 
mium need  not  be  paid  in  advance,  nor  tendered  on  the  day 
when  the  renewal  should  be  made,  provided  the  course  of  deal- 
ing between  the  parties  has  been  such  as  to  justify  the  infer- 
ence and  belief  that  credit  is  to  be  extended.  ^*^^  The  oral 
promise  to  renew  must  contain  all  the  essntial  elements  of 
a  valid  contract  of  insurance.  ^^^  The  agreement  upon  the 
•essentials  may  be  express  or  implied.  It  is  sufficient  if  the 
minds  of  the  parties  met  as  to  the  tenns,  and  nothing  re- 
mained to  be  done  except  that  the  agent  should  renew  the 
expiring  policy  and  that  the  insured  should  then  or  later  pay 
the  premium. ^^^  Thus  where  a  policy  for  a  single  year  at 
a  stipulated  annual  premium  has  been  once  rencAved,  an 
agreement  for  another  renewal  accompanied  by  a  payment  of 
the  same  premium,  but  without  any  term  being  fixed,  will 
continue  the  policy  in  force  for  another  year.^^^     Upon  fail- 

'"^See  ante,  p.  45,  §  29;  Eames  v.  Home  Ins.  Co.,  94  U.  S, 
«29;  McCabe  v.  Aetna  Ins.  Co.,  9  N.  D,  19,  81  N.  W.  429;  Bald- 
win V.  Phoenix  Ins.  Co.  (Ky.),  54  S.  W.  13;  Lockwood  v.  Middlesex 
Mut.  Assur.  Co.,  47  Conn.  553;  Squier  v.  Hanover  Fire  Ins.  Co.,  18 
App.  Div.  575,  46  N.  Y.  Supp.  30. 

'"-  Sater  v.  Henry  County  Farmers'  Ins.  Co.,  92  Iowa,  579,  61  N.  W. 
209;  ante,  §§  17,  29,  30;  Mallette  v.  British  American  Assur.  Co.,  91 
Md.  471,  46  Atl.  1005. 

"•'King  V.  Hekla  Fire  Ins.  Co.,  58  Wis.  508;  Hartford  Fire  Ins. 
Co.  V.  Walsh,  54  111.  164. 

'"  Scott  V.  Home  Ins.  Co.,  53  Wis.  238. 


106  THE   C0>;TRACT MAKING.  §  49 

lire  of  tlie  authorized  agent  of  an  insurer  to  renew  an  expiring 
policy  the  insurer  becomes  liable  in  an  action  for  damages 
bj  the  insured  to  the  same  extent  as  if  the  policy  hid  been 
renewed;  or  an  action  will  lie  against  it  for  specific  per- 
formance of  its  agreement  to  renew.  ^"^ 

There  is  some  disagreement  among  authorities  as  to  the 
effect  of  a  renewal.  Mr.  May  says :  "It  is  generally  held  to 
be  a  new  contract,  upon  the  terms  and  conditions  stated  in 
the  policy  expired — the  old  application,  in  the  absence  of 
evidence  to  the  contrary,  serving  as  the  basis  of  the  new  con- 
tract, and  as  if  made  at  the  date  of  the  renewal."  ^'^^  But  the 
renewal  may  be  upon  different  terms  and  amount  to  a  modi- 
fication of  the  former  contract.  And  there  would  seem  to  be  a 
difference  between  life  insurance  contracts  which  are  in  their 
nature  continuous  during  the  life  of  the  insured  though 
contingent  upon  the  payment  of  stipulated  premiums,  and 
fire  insurance  contracts  which  are  intended  only  to  cover 
specified  risks  for  shorter  periods  of  time  and  usually  con- 
tain provisions  ^permitting  of  their  cancellation. 

A  renewal  receipt  is  simply  evidence  of  a  continuance  of  the 
original  contract  between  the  same  parties,  upon  the  same 
risk  and  subject  to  the  same  hazard,  unless  the  insurer  has 
consented  to  some  substitution  of  interests  or  change  of  risk 
and  hazard. ^'^'^  An  insurer  is  estopped  to  deny  the  renewal 
of  a  policy  where  its  agents,  who  had  power  to  insure,  repre- 
sented to  the  insured  that  it  had  been  renewed,  and  received 


"'Ante,  §§  30-33. 

"U  May,  Ills.  (3d  Ed.)  §  70;  Peacock  v.  New  York  Life  Ins.  Co., 
20  N.  Y,  293;  Hartford  Fire  Ins.  Co.  v.  Walsh,  54  III.  164;  Witherell 
V.  Marine  Ins.  Co.,  49  Me.  200. 

1"  Firemen's  Ins.  Co.  v.  Floss,  67  Md.  403;  Lancey  v.  Phoenix  Fire 
Ins.  Co.,  56  Me.  562. 


§  49  RENEWAL   OF   CONTRACT.  107 

and  appropriated  money  which  was  paid  to  cover  the  cost  of 
renewal. -^^^ 

The  agreement  to  renew  must  he  clear  as  well  as  complete. 
Loose  and  informal  conversations  hetween  an  agent  and  an 
insured  Avill  not  hind  the  insurer.  It  must  appear  that  the 
parties  intended  to  make  a  renewal  agreement  and  understood 
that  they  had  perfected  the  agreement.  ^^^  When  this  appears, 
the  renewal  contract  is  complete,  even  though  the  policy  itself 
provides  that  it  shall  not  be  renewed  in  that  manner.  ^^^  No 
present  and  valid  contract  of  renewal  which  will  make  an 
insurer  liable  for  a  subsequent  loss  is  shown  by  proof  that 
shortly  before  the  expiration  of  a  former  policy,  an  insured 
instructed  his  employee,  ^^ho  was  also  the  insurer's  agent,  to 
renew  the  policy  when  it  expired,  which  the  agent  promised, 
but  neglected  to  do.^^^  A  condition  in  a  renewal  policy  that 
the  party  insured  is  in  "good  health"  is  to  be  construed  in 
connection  with  the  terms  of  the  original  policy  and  the  state- 
ments therein  made  respecting  health. ^^^ 

"'  International  Trust  Co.  v.  Norwich  Union  Fire  Ins.  Soc,  71 
Fed.  81.  17  C.  C.  A.  608. 

"*  O'Reilly  v.  Corporation  of  London  Assur.  Co.,  101  N.  Y.  575; 
Mallette  v.  British  American  Assur.  Co.,  91  Md.  471,  46  Atl.  1005; 
Croghan  v.  New  York  Underwriters'  Agency,  53  Ga.  109;  Taylor  v. 
Phoenix  Ins.  Co.,  47  Wis.  365.  A  preliminary  agreement  to  keep  the 
policy  alive,  not  incorporated  in  the  policy  itself,  is  of  no  effect. 
Giddings  v.  Phoenix  Ins.  Co.,  90  Mo.  272.  And  see  Royal  Ins.  Co.  v. 
Beatty,  119  Pa.  St.  6. 

""McCabe  v.  Aetna  Ins.  Co.,  9  N.  D.  19,  81  N.  W.  429;  Cohen  v. 
Continental  Fire  Ins.  Co.,  67  Tex.  325.  See  Giddings  v.  Phoenix  Ins. 
Co.,  90  Mo.  272. 

'"  Idaho  Forwarding  Co.  v.  Fireman's  Fund  Ins.  Co.,  8  Utah,  41,  17 
L.  R.  A.  586. 

^^- Peacock  v.  New  York  Life  Ins.  Co.,  20  N.  Y.  293,  1  Bosw.  338; 
Day  V.  Mutual  Ben.  Life  Ins.  Co.,  4  Bigelow,  Life  &  Ace.  Rep.  15. 
Effect  upon  rights  of  creditors,  Norwood  v.  Guerdon,  60  111.  253,  4 


108  the  contract  —  makixg.  -  §  50 

Revival  of  Policy. 

§  50.  When  a  policy,  which  does  not  in  terms  provide  for  its 
revival,  lapses  or  is  forfeited,  it  can  only  be  re- 
vived 

(a)  By  a  new  contract  upon  a  suflB.cient  considera- 

tion; or 

(b)  By  the  insurer  waiving  the  lapse  or  forfeiture. 

As  the  word  "renewal"  presupposes  the  existence  of  a 
live  and  existing  contract  whose  continuation  was  sought  or 
agreed  upon,  so  the  word  "revival"  contemplates  the  expira- 
tion of  a  previous  contract  wdiose  reinstatement  is  under 
consideration.  Nothing  can  revive  a  policy  wliich  has  be- 
come null  and  void  except  a  new  contract  supported  bj  a  valid 
and  sufficient  consideration,^  ^^  or  such  conduct  of  the  insurer 
as  amounts  to  a  waiver  and  operates  as  an  estoppel. -^^^  The 
receipt  of  a  premium  after  knowledge  of  a  forfeiture  is  a 
waiver  of  the  forfeiture ;  but  such  knowledge  on  the  part  of 
the  insurer  at  the  time  of  payment  must  be  proved  before  a 
waiver  is  established, ^^^  It  has  been  held  that  the  attaching 
of  a  mortgage  clause  to  a  forfeited  policy  without  a  new  con- 
sideration creates  no  liability  against  an  insurer ;  ^  ^^  nor  does 
a  consent  to  a  transfer  of  the  policy.  ^^''^  An  agent  cannot 
revive  a  forfeited  policy  by  giving  an  antedated  receipt  for 

Bigelow.  Life  &  Ace.  Rep.  30;  Clarke  v.  Schwarzenberg,  164  Mass. 
347. 

•"Lantz  V.  Vermont  Life  Ins.  Co.,  139  Pa.  St.  546;  Phoenix  Ins.  Co. 
V.  Tomlinson,  125  Ind.  84;  New  York  Cent.  Ins.  Co.  v.  Watson,  23 
Mich.  486. 

"^Security  Ins.  Co.  v.  Fay,  22  Mich.  467;  Brink  v.  Hanover  Fire 
Ins.  Co.,  70  N.  Y.  593. 

"=^  Ellis  V.  State  Ins.  Co.,  68  Iowa,  578,  27  N.  W.  762;  Sheppard  v. 
Peabody  Ins.  Co.,  21  W.  Va.  368. 

""  Baldwin  v.  German  Ins.  Co.,  105  Iowa,  379,  75  N.  W.  326. 

"'  Davis  V.  German  American  Ins.  Co.  135  Mass.  251.  See,  also, 
Graham  v.  Fireman's  Ins.  Co.,  87  N.  Y.  69;  Hanover  Fire  Ins.  Co.  v. 
National  Exchange  Bank  (Tex.),  34  S.  W.  333.  , 


I  50  KEYIVAL   OF   POLICY.  109 

tlig  premium  ;^^^  nor  by  redelivery  of  a  canceled  policy  after 
a  loss.^^^  But  an  agent  empowered  to  issue  and  renew 
policies  is  usually  held  to  have  power  to  waive  violations  of 
their  conditions,  and  in  so  far  as  he  acts  within  his  authority 
binds  his  principal  by  waiver  express  or  implied,  so  long  as 
his  acts  are  not  illegal.  ^^"^ 

A  life  policy  which  has  lapsed  through  non-payment  of  the 
premium,  is  not  revived  by  a  payment  made  after  the  death 
of  the  insured,  where  the  fact  of  death  was  unknown  to  the 
insurer  when  the  payment  was  accepted. ^^^  Where  consent 
of  an  insurer  is  obtained  to  the  revival  of  a  policy  only  by 
the  making  and  approval  of  a  renewal  application,  the  repre- 
sentations contained  therein  become  a  part  of  the  original 
contract.^"  Eeinstatement  of  a  policy  will,  upon  a  proper 
showing,  be  coerced  by  a  court  of  equity,  as  where  a  surrender 
has  been  obtained  through  fraud  or  deceit  or  misrepresenta- 
tion, ^^a  ^Yhen  the  contract  is  silent  as  to  the  conditions 
upon  which  it  may  be  revived  after  it  has  lapsed  or  been  for- 
feited, an  insurer  is  under  no  obligation  to  consent  to  a 
revival  or  renewal,  and  may  attach  such  conditions  precedent 
as  it  chooses  to  its  consent  if  given ;  but,  where  the  contract 
itself  prescribes  the  terms,  the  insured  need  do  no  more  than 
comply  with  such  terms,  and  the  consent  of  the  insurer  is 
unnecessary.-'^^ 

""Diboll  V.  Aetna  Life  Ins.  Co.,  22  La.  Ann.  179. 

"» Hartford  Fire  Ins.  Co.  v.  Reynolds,  36  Mich.  502;  Crown  Point 
Iron  Co.  V.  Aetna  Ins.  Co.,  53  Hun,  220,  6  N.  Y.  Supp.  602. 

""Post,  c.  8,  "Agents." 

"' Wyman  v.  Phoenix  Mut.  Life  Ins.  Co.,  45  Hun  (N.  Y.),  184;  Ellis 
V.  State  Ins.  Co.,  68  Iowa,  578,  27  N.  W.  762. 

'"  Metropolitan  Life  Ins.  Co.  v.  McTague,  49  N.  J.  Law,  587. 

'^  Heinlein  v.  Imperial  Life  Ins.  Co.,  101  Mich.  250.  25  L.  R.  A.  627. 

'^"Manson  v.  Grand  Lodge  A.  O.  U.  W.,  30  Minn.  509;  Dennis  v. 
Massachusetts  Ben.  Ass'n,  120  N.  Y.  496,  9  L.  R.  A.  189;  Jackson  v. 


110  the  contract  —  making.  §§51,52 

Application". 

§51.  An  application  is  a  mere  request  or  proposal  for  in- 
surance. 

§  52.  The  application  may  be,  but  is  not  necessarily,  a  part 
of  a  contract  or  policy  issued  by  an  insurer  in  acceptance  of 
the  proposal. 

An  application  for  insurance  is  a  very  different  tiling  from 
the  contract  of  insurance  to  wliich  it  leads.  It  is  only  an 
offer  by  one  wlio  desires  to  be  insured  to  some  insurer  to 
enter  into  a  contract  concerning  a  specified  subject  matter 
upon  specified  terms.  This  offer  the  insurer  may  accept  or 
reject,  absolutely  or  with  some  qualification  or  condition. 
The  contract  is  not  made  until  the  proposal  of  one  party  has 
been  unqualifiedly  and  unconditionally  accepted  by  the  other 
party,  and  the  acceptance  has  been  signified  by  some  proper 
act,  so  that  neither  party  can  recede  without  liability. -^^^  The 
words  used  in  an  application  are  given  their  ordinary  and 
usual  meaning,  and  the  construction  is  the  same  as  that  of  a 
policy.  ^^^ 

Whether  an  application  is  a  part  of  a  policy  s-ubsequently 
executed  and  delivered  to  an  insured  must  be  determined 
from  an  inspection  and  construction  of  the  policy  itself.  The 
question  is  often  of  vital  importance  in  cases  where  there  is 
an  issue  as  to  fraud,  conceahnent,  or  misrepresentation  by  the 

Northwestern  Mut.  Relief  Ass'n,  78  Wis.  463;  Lovick  v.  Providence 
Life  Ass'n,  110  N.  C.  93;  Lindsey  v.  Western  Mut.  Aid  Soc,  84  Iowa. 
734,  50  N.  W.  29.  The  privilege  of  reinstatement  according  to  the 
provisions  of  a  policy  is  a  substantial  right,  of  which  an  insured  can- 
not be  deprived  by  any  subsequent  by-law  not  expressly  authorized 
by  the  contract.  Sieverts  v.  National  Benev.  Ass'n,  95  Iowa,  710,  64 
N.  W.  671. 

'=' Chamberlain  v.  Prudential  Ins.  Co.  (Wis.),  85  N.  W.  128;  ante, 
§§  40-42. 

'=' Mobile  Life  Ins.  Co.  v.  Walker,  58  Ala.  290;  Chamberlain  v. 
Prudential  Ins.  Co.,  supra.     See  "Construction  of  Policy." 


§  52  APPLICATION".  Ill 

insured,  or  his  breacTi  of  a  warranty,  representation  or  condi- 
tion. More  especially  is  this  true  in  life  insurance,  wliere 
the  applications  are  usually  forwarded  to  the  home  office  of 
the  insurer,  and  acceptance  or  rejection  is  based  chiefly  upon 
the  statements  of  the  applicant.  The  fact  that  acceptance 
is  an  act  of  the  insurer  who  prepares  the  policy  and  has 
the  opportunity  in  preparing  the  policy  to  say  whether  or  not 
the  application  shall  be  a  part  of  it  has  led  to  the  adoption  of 
the  rule  that  the  application  is  only  a  part  of  the  final  con- 
tract when  incorporated  into  it  or  attached  to  it,  or  included 
either  expressly  or  by  necessary  implication.  But  when  the 
application  is  a  part  of  the  contract  all  its  terms,  conditions, 
statements  and  representations  are  entitled  to  as  much  con- 
sideration as  if  set  out  in  full  upon  the  face  of  the  policy. ^^'^ 
The  presumption  is  that  the  person  who  signs  an  application 
for  insurance  knows  and  indorses  its  contents.  ^^^  The  errors 
and  mistakes  of  the  agent  in  writing  down  the  answers  given 
by  the  applicant  are  chargeable  to  the  insurer  unless  the  acts 
of  the  agent  are  sanctioned  by  the  applicant.  ^^^  In  so  far 
as  an  applicant  assumes  to  answer  questions  asked  him  by 

*"Ante,  §§  40-46;  post,  c.  11,  "Warranties  and  Representa- 
tions." Missouri,  K,  &  T.  Trust  Co.  v.  German  Nat.  Bank 
(C.  C.  A.),  77  Fed.  117;  Rogers  v.  Phoenix  Ins.  Co.,  121  Ind.  570; 
Reynolds  v.  Atlas  Ace.  Ins.  Co.,  69  Minn.  93,  71  N.  W.  831;  Vilas  v. 
New  York  Cent.  Ins.  Co.,  72  N.  Y.  590. 

The  warranties  and  stipulations  in  an  application  are  embraced 
in  a  provision  in  a  benefit  certificate  making  part  of  the  contract 
"the  statements"  made  by  the  insured  in  his  application.  Foley  v. 
Royal  Arcanum,  151  N.  Y.  196;  Kelley  v.  Mutual  Life  Ins.  Co.,  75 
Fed.  637. 

*'»  Hartford  L.  &  A.  Ins.  Co.  v.  Gray,  80  111.  28,  91  111.  159. 

'^''Rissler  v.  American  Cent.  Ins.  Co.,  150  Mo.  366,  51  S.  W.  755; 
Ames  V.  Manhattan  Life  Ins.  Co.,  40  App.  Div.  465,  58  N.  Y.  Supp. 
244;  Fletcher  v.  New  York  Life  Ins.  Co.,  4  McCrary,  440,  14  Fed.  846; 
Marston  v.  Kennebec  Mut.  Life  Ins.  Co.,  89  Me.  266,  36  Atl.  389. 


112  THE   CONTRACT  —  MAKING.  §  52 

the  insurer  lie  must  answer  fairly,  fully  and  honestly.  He 
is  not  required  to  volunteer  information. ^^*^  If  a  question 
asked  is  ambiguous,  so  that  it  might  be  misunderstood  by  an 
applicant,  it  is  not  error  to  allow  him  to  testify,  upon  trial 
of  an  action  on  the  policy,  as  to  his  understanding  of  the 
question  when  he  answered  it.^^^ 

""  See  post,  c.  11,  "Warranties  and  Representations." 
"^  Mutual  Mill  Ins.  Co.  v.  Gordon,  121  111.  366. 


CHAPTER  V. 

THE  CONTRACT    (Confinwed).— CONSTITUENTS. 

§  53.  In  General. 

54.  Oral  Contract  to  Issue  Policy. 

55.  The  Lex  Loci. 

56.  Custom  and  Usage. 

57.  Application. 

58.  Indorsements. 

59.  Mutual  Organizations, 

60.  Amendments  to  Charters  and  By-laws. 

61.  Consent  of  Members  to  Same. 

62. Amendments  Must  be  Reasonable. 

In  General. 

§  53.  The  policy,  when  issued  and  accepted,  constitutes  the 
only  contract  of  the  parties  concerning  the  matters  mentioned 
therein.  Other  papers  are  often  included  in  the  policy  by  ex- 
press reference  or  by  implication  so  that  they  form  a  part  of  it. 

After  the  terms  of  an  insurance  contract  have  been  re- 
duced to  writing,  signed  by  one  party  and  accepted  by  the 
other,  with  the  mutual  understanding  that  it  is  then  complete 
and  operative,  neither  party  can  abandon  that  instrument  and 
resort  to  the  negotiations  which  were  preliminary  to  its 
execution  for  the  purpose  of  ascertaining  what  the  contract 
is.  All  antecedent  and  contemporaneous  negotiations  and 
verbal  statements  appertaining  to  the  subject  matter  of  the 
written  contract  are  merged  and  excluded  when  the  parties 
assent  to  a  written  instrument  as  expressing  their  agreement.^ 

*  Fowler  v.  Metropolitan  Life  Ins.  Co.,  116  N.  Y.  389,  5  L.  R.  A. 
805;  New  York  Life  Ins.  Co.  v.  McMaster's  Adm'r,  57  U.  S.  App.  638, 
87  Fed.  63;  Union  Mut.  Life  Ins.  Co.  v.  Mowry,  96  U.  S.  544.  See 
ante,  §§  36-39. 

KERR,  INS.— 8 


114  THE   CONTRACT — CONSTITUENTS.  §54 

Tiius  parol  agreements  for  the  future  cannot  be  shown ;  and  a 
prior  verbal  agreement  between  insured  and  the  agent  of  the 
insurer,  that  a  policy  for  a  stated  time  should  be  kept  renewed, 
is  of  no  effect  if  not  contained  in  the  policy  when  executed.^ 
Subsequent  promises  or  agreements  of  the  insurer,  not  rest- 
ing upon  a  new  consideration,  do  not  enter  into  the  original 
contract."  The  holder  of  a  policy  is  conclusively  presumed 
to  have  knowledge  of  its  contents,  and  in  the  absence  of  proof 
of  fraud  to  ha-s'e  assented  thereto.^  And  the  beneficiary  is 
bound  by  all  the  valid  conditions;'  and  both  are  bound  by 
the  contents  of  an  application  attached  to  and  forming  part  of 
the  policy.^ 

Oral  Contract  to  Issue  Policy. 

§  54.  The  oral  promise  of  an  insurer  to  issue  a  policy  binds 
it  to  execute  one  in  the  usual  form  and  with  the  usual  condi- 
tions. 

Upon  an  oral  contract  of  insurance,  where  nothing  is  said 

about  conditions,  if  a  policy  is  to  be  issued,  the  parties  are 

presumed    to    intend    that  it    shall    contain    the   conditions 

usually  inserted  in  policies  of  insurance  in  like  cases,  or  as 

^Hartford  Fire  Ins.  Co.  v.  Davenport,  37  Mich.  609;  Hearn  v.  Equi- 
table Safety  Ins.  Co.,  3  Cliff.  328,  Fed.  Cas.  No.  6,299;  Giddings  v. 
Phoenix  Ins.  Co.,  90  Mo.  272;  Mecke  v.  Life  Ins.  Co.,  8  Phila.  6,  3 
Bigelow,  Life  &  Ace.  Rep.  747. 

=  Knickerbocker  Life  Ins.  Co.  v.  Heidel,  8  Lea  (Tenn.),  488;  ante, 
§§  36-39. 

*  Condon  v.  Mutual  R.  F.  L.  Ass'n,  89  Md.  99,  42  Atl.  944,  44  L.  R. 
A.  149;  New  York  Life  Ins.  Co.  v.  McMaster's  Adm'r,  57  U.  S.  App. 
638,  87  Fed.  63;  Brown  v.  United  States  Casualty  Co.,  88  Fed.  38: 
Wilkins  v.  State  Ins.  Co.,  43  Minn.  177.  Compare  Miotke  v.  Milwau- 
kee Mechanics'  Ins.  Co.,  113  Mich.  166,  71  N.  W.  463. 

'Donald  v.  Chicago,  B.  &  Q.  Ry.  Co.,  93  Iowa,  284,  33  L.  R.  A. 
492;  Wheeler  v.  Odd  Fellows'  Mut.  Aid  &  Ace.  Ass'n,  44  Minn.  513. 

» Reynolds  v.  Atlas  Ace.  Ins.  Co.,  69  Minn.  93,  71  N.  W.  831; 
"Wheeler  v.  Odd  Fellows'  Mut.  Aid  &  Ace.  Ass'n,  44  Minn.  513;  John- 
son V.  Dakota  F.  &  I\I.  Ins.  Co.,  1  N.  D.  167.  45  N.  W.  799. 


§  55  THE    LEX    LOCI.  115 

have  been  before  used  by  the  parties.  That  a  particular 
condition  is  usual  must  be  shown  by  the  party  who  alleges  it/ 
The  acceptance  of  a  policy  after  a  loss  covered  by  an  oral 
contract  of  insurance  is  not  conclusive  proof  as  to  the  terms 
of  the  original  agreement  but  is  evidence  of  an  admission 
by  the  insured  that  it  contained  the  terms  agreed  on.^  And 
likewise  where  a  binding  slip  has  been  issued  as  evidence  of 
temporary  insurance  till  a  policy  can  be  prepared.^  Pre- 
liminary negotiations  will  be  construed  in  connection  with 
such  form  of  policy  as  may  be  prescribed  by  the  law-making 
body.^'^  It  has  been  held  that  where  an  insurer  denies  the 
making  of  any  preliminary  contract,  it  cannot  demand  com- 
pliance by  the  insured  with  conditions  which  would  have 
been  contained  in  a  policy  if  one  had  been  issued  ;^^  but  the 
better  rule  is  that  the  party  who  seeks  to  take  advantage  of  a 
contract  must  take  it  cum  onere,  and  is  bound  by  all  the  con- 
ditions and  stipulations  which  form  a  part  of  it.^^ 

The  Lex  Loci. 

§55.  The  law  of  the  place  where  a  contract  is  made  enters 
into  and  forms  an  essential  part  of  every  contract. 

Whatsoever  the  law  of  the  state  where  the  contract  is  made 

declares  with  respect  to  the  subject  matter  of  the  contract 

'Smith  V.  State  Ins.  Co.,  64  Iowa,  716;  ante,  §§  30-33. 

*  Salisbury  v.  Hekla  Fire  Ins.  Co.,  32  Minn.  458. 

•Lipman  v.  Niagara  Fire  Ins.  Co.,  121  N.  Y.  454,  8  L.  R.  A.  719; 
Edwards  v.  Mississippi  Valley  Ins.  Co.,  1  Mo.  App.  192;  De  Grove  v. 
Metropolitan  Ins.  Co.,  61  N.  Y.  594;  Karelsen  v.  Sun  Fire  OtBce  of 
London,  122  N.  Y.  545. 

"Hicks  V.  British  American  Assur,  Co.,  162  N.  Y.  284,  48  L.  R.  A. 
424. 

"Gold  V.  Sun  Ins.  Co.,  73  Cal.  216;  Campbell  v.  American  Fire  Ins. 
Co.,  73  Wis.  100;  American  Cent.  Ins.  Co.  v.  Simpson,  43  111.  App.  98. 

"Hicks  V.  British  American  Assur.  Co..  162  N.  Y.  284,  48  L.  R.  A. 
424.  See  post,  c.  13,  "Proofs  of  Loss;  "  Barre  v.  Council  Bluffs  Ins. 
Co.,  76  Iowa,  609,  41  N.  W.  373. 


116  THE  CONTKACT CONSTITUENTS.  §  55 

or  annexes  as  the  incident  of  tlie  contract,  whether  granting  a 
privilege  or  announcing  a  prohibition,  is  as  mnch  part  and 
parcel  of  the  contract  as  though  written  therein  or  indorsed 
thereon,  x^l  statutory  laws  in  existence  at  the  place  of  the 
making  of  the  contract  are  necessarily  contemplated  and 
included  in  the  contract  and  no  contract  can  change  the  law. 
And  because  the  Constitution  of  the  United  States  prohibits 
these  states  from  passing  any  law  impairing  the  obligation 
of  contracts  it  is  not  competent  for  a  legislature  to  destroy  the 
protecting  provisions  of'  a  statute  which  relates  not  merely  to 
the  remedy  but  enters  into  the  consideration  and  becomes  a 
constituent  part  of  every  policy  of  insurance  by  a  subsequent 
repeal  of  the  statute. 

''The  obligation  of  a  contract  consists  in  its  binding  force 
on  the  party  who  makes  it.  This  depends  on  the  laws  in 
existence  when  it  is  made.  These  are  necessarily  referred 
to  in  all  contracts  and  form  a  part  of  them  as  the  measure 
of  obligation  to  perform  them  by  the  one  party  and  the  right 
acquired  by  the  other.  *  *  *  If  any  subsequent  law 
affect  to  diminish  the  duty  or  to  impair  the  right,  it  necessarily 
bears  on  the  obligation  of  the  contract  in  favor  of  one  party 
to  the  iTijury  of  the  other;  hence  any  law  which  in  its  opera- 
tion amounts  to  a  denial  or  obstruction  of  the  rig-hts  accruing 
by  a  contract,  though  professing  to  act  only  on  the  remedy, 
is  directly  obnoxious  to  the  prohibition  of  the  constitution."  ^^ 

"McCracken  v.  Hayward,  2  How,  (U.  S.)  612;  Equitable  Life 
!Assur.  Soc.  V.  Clements,  140  U.  S.  226,  11  Sup,  Ct.  822;  Haynie  v. 
Knights  Templars  &  M.  Life  Ind.  Co.,  139  Mo.  416;  Jarman  v. 
Knights  Templars  &  M.  Life  Ind.  Co.,  95  Fed.  70.  "It  is  a  sound 
rule  of  construction  that  a  statute  should  have  a  prospective  opera- 
tion only,  unless  its  terms  show  clearly  a  legislative  intention  that  it 
should  operate  retrospectively.  And  some  of  the  states  have  deemed 
it  just  and  wise  to  forbid  such  laws  altogether,  by  their  constitu- 
tions."   Cooley,  Const.  Lim.  (5th  Ed.)  456;  Oshkosh  Gas  Light  Co. 


§§  56,  57  CUSTOM   AND    USAGE  —  APPLICATION.  117 

But  wliere  tlie  right  of  a  party  to  avoid  a  contract  on  the 
ground  of  a  statutory  enactment  based  upon  the  declared 
public  policy  of  the  state,  pertains  rather  to  the  remedy 
than  an  essential  element  of  the  contract  inducing  its  execu- 
tion, it  may  by  subsequent  act  of  the  legislature  be  entirely 
taken  away  and  the  parties  remitted  to  the  terms  of  the  con- 
tract as  expressed  on  its  face.-^* 

When  a  fire  insurance  policy  is  written  on  property  within 
the  corporate  limits  of  a  city,  all  the  ordinances  of  such  city 
Avhich  affect  the  rights  of  the  parties  in  case  of  a  loss  under 
the  policy,  become  a  part  of  the  contract,  binding  upon  both 
insurer  and  insured ;  and  in  so  far  as  they  are  applicable,  such 
ordinances  govern  and  control  in  the  adjustment  and  settle- 
ment of  a  loss  covered  by  the  contract. ^'^ 

Custom  and  Usage. 

§  56.  And  so  with  a  common  and  universal  custom  or  usage 
which  is  not  at  variance  with  the  terms  of  the  contract  or  in 
opposition  to  law.^'' 

Application. 

§  57.  The  application  is  a  part  of  the  contract  when  incorpo- 
rated therein,  or  attached  thereto,  or  expressly  referred  to 
and  included. 1^ 

V.  Germania  Fire  Ins.  Co.,  71  Wis.  454,  37  N.  W.  819;  Lindsey  v. 
Western  Mut.  Aid  Soc,  84  Iowa,  734,  50  N.  W.  29;  Germania  Life  Ins. 
Co.  V.  Peetz  (Tex.  Civ.  App.),  47  S.  W.  687;  Fidelity  &  Casualty  Co. 
V.  Loewenstein,  97  Fed.  17.  46  L.  R.  A.  450;  Rosenplanter  v.  Provi- 
dent Sav.  Life  Assur.  Soc,  96  Fed.  721,  46  L.  R.  A.  473;  Central  Bank 
Df  Washington  v.  Hume,  128  U.  S.  195;  Hicks  v.  British  America 
Assur.  Co.,  162  N.  Y.  284,  48  L.  R.  A.  424;  Connecticut  Mut.  Life  Ins. 
Co.  v.  Cushman,  108  U.  S.  51;  Roberts  v.  Winton,  100  Tenn.  484,  41 
L.  R.  A.  275;  ante,  "The  Standard  Policy." 

"  Ewell  V.  Daggs,  108  U.  S.  143,  2  Sup.  Ct.  408. 

"Larkin  v.  Glens  Falls  Ins.  Co.,  80  Minn.  527,  83  N.  W.  410;  Fire 
Association  v.  Rosenthal,  108  Pa.  St.  474. 

"Ante,  c.  Ill;  Walls  v.  Bailey,  49  N.  Y.  464;  Howard  v.  Great 
Western  Ins.  Co.,  109  Mass.  384.     See  "Evidence." 

"Ante,  §§  51,  52.     See,  also,  "Warranties." 


lis  THE  CONTKACT CONSTITUENTS.  §  58 

Indorsements. 

§  58.  Indorsements  on  a  policy  are  usually  part  of  the  policy. 

Where  the  body  of  a  policy  refers  to  annexed  conditions, 
such  conditions  printed  on  the  back  of  the  policy,  though 
unsigned,  are  a  part  of  the  contract ;  ^^  memoranda  and  mar- 
ginal clauses  relating  to  the  subject  matter  or  conditions,  made 
prior  to  delivery,  form  a  part  of  the  instrument  if  such  ap- 
pears to  have  been  the  purpose  and  intention  of  making 
them.i» 

Other  Papers. 

Any  paper  may  b}''  proper  reference  and  inclusion  be  made 
a  part  of  the  policy,  as,  for  instance,  a  premium  note,^*^  or  a 
preliminary  survey;  ^^'  or  a  rider  containing  an  "iron  safe'* 

"Kensington  Nat.  Bank  v.  Yerkes,  86  Pa.  St.  227;  Gauthier  v. 
Canadian  Mut.  Ins.  Co.,  29  Up.  Can.  C.  P.  593;  Alabama  Gold  Life  Ins. 
Co.  V.  Thomas,  74  Ala.  578. 

"Graham  v.  Stevens,  34  Vt.  166;  Patch  v.  Phcenix  Mut.  Life  Ins. 
Co.,  44  Vt.  481;  Pierce  v.  Charter  Oak  Life  Ins.  Co.,  138  Mass.  151; 
Cowles  V.  Continental  Life  Ins.  Co.,  63  N.  H.  300;  Guerlain  v.  Co- 
lumbian Ins.  Co.,  7  Johns.  (N.  Y.)  527;  Wright  v.  Mutual  Ben.  Life 
Ass'n,  118  N.  Y.  237;  Mead  v.  Northwestern  Ins.  Co.,  7  N.  Y.  530.  Not 
a  part.  Planters'  Mut.  Ins.  Co.  v.  Rowland,  66  Md.  236;  Mullaney  v. 
National  F.  &  M.  Ins.  Co.,  118  Mass.  i593;  Bassell  v.  American  Fire 
Ins.  Co.,  2  Hughes,  531,  Fed.  Cas.  No.  1,094.  See,  also,  Alabama 
Gold  Life  Ins.  Co.  v.  Thomas,  74  Ala.  578;  Ferrer  v.  Home  Mut.  Ins. 
Co.,  47  Cal.  416;  Girard  Life  Ins.  Annuity  &  Trust  Co.  v.  Mutual 
Life  Ins.  Co.,  97  Pa.  St.  15;  Grandin  v.  Rochester  German  Ins.  Co.,^ 
107  Pa.  St.  26;  Stone's  Adm'rs  v.  United  States  Casualty  Co.,  34  N.  J. 
Law,  371;  Kingsley  v.  New  England  Mut.  Fire  Ins.  Co.,  8  Cush. 
(Mass.)  393. 

^°  Schultz  V.  Hawkeye  Ins.  Co.,  42  Iowa,  239;  American  Ins.  Co.  v. 
Stoy,  41  Mich.  385.  Compare  American  Ins.  Co.  v.  Gallaghan,  75  Ind. 
168. 

"Steward  v.  Phoenix  Fire  Ins.  Co.,  5  Hun  (N.  Y.),  261. 


§58 


INDORSEMENTS. 


119 


clause; 22  or  a  rider  containing  a  mortgage  clause ;2-^  but 
outside  papers  must  be  imported  in  such  a  manner  as  to  leave 
no  doubt  of  the  intention  of  the  parties. ^^  Thus  a  prospectus 
of  a  life  insurance  company,  not  annexed  to  a  policy  nor 
included  by  reference,  cannot  affect,  nor  vary,  nor  modify  the 
strict  terms  of  the  policy  itself  .^^  It  is  not  made  a  part  of  th'e 
policy  by  an  indorsement  on  the  policy  that  it  may  be  had 
gratis.^^  It  has  been  held  that  pamphlets  sent  out  by  an 
insurance  company,  and  containing  representations  as  to  the 
plans  upon  which  the  company  insures,  may  be  considered 
in  determining  the  meaning  of  the  policy,^^  or  even  what 
the  contract  is ;  ^^  but  however  important  they  might  be  in  an 
action  brought  by  an  insured  to  rescind  the  contract  upon 
the  grounds  of  misrepresentation  in  its  procuring  it  "would 
be  impossible  to  sustain  the  claim  that  the  statements  and 
representations  contained  in  the  pamphlet  issued  by  the  com- 
pany were  to  be  regarded  as  affecting  or  modifying  the  strict 
'terms  of  the  policy  without  disregarding  the  established  rule 

"Crigler  v.  Standard  Fire  Ins.  Co.,  49  Mo.  App.  11;  Keeley-Good- 
fellow  Shoe  Co.  v.  Liberty  Ins.  Co.,  87  Tex.  112,  26  S.  W.  1063,  8 
Tex.  Civ.  App.  227,  28  S.  W.  1027;  American  Fire  Ins.  Co.  v.  First 
Nat.  Bank  (Tex.  Civ.  App.),  30  S.  W.  384.  See  Jackson  v.  British 
American  Assur.  Co..  106  Mich.  47.  30  L.  R.  A.  636  (and  notes). 

=«  Hastings  v.  Westchester  Fire  Ins.  Co.,  73  N.  Y.  141;  Westchester 
Fire  Ins.  Co.  v.  Coverdale,  48  Kan.  446;  Phoenix  Ins.  Co.  v.  Omaha 
Loan  &  Trust  Co.,  41  Neh.  834.  25  L.R.  A.  679. 

"Goddard  v.  East  Texas  Fire  Ins.  Co..  67  Tex.  69.  60  Am.  Rep.  1; 
Phoenix  Ins.  Co.  v.  Wilcox  &  G.  Guano  Co.,  25  U.  S.  App.  201,  65  Fed. 
724;  Gunther  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  34  Fed.  501;  City  Ins. 
Co.  V.  Bricker.  91  Pa.  St.  488. 

^"Fowler  v.  Metropolitan  Life  Ins.  Co..  116  N.  Y.  389,  5  L.  R.  A. 
805;  Ruse  v.  Mutual  Ben.  Life  Ins.  Co.,  23  N.  Y.  516,  24  N.  Y.  653. 

'» Knickerbocker  Life  Ins.  Co.  v.  Heidel,  8  Lea  (Tenn.),  488. 

"Bruce  v.  Continental  Life  Ins.  Co.,  58  Vt.  253. 

=«  Smith  V.  St.  Louis  Mut.  Life  Ins.  Co.,  2  Tenn.  Ch.  727;  Southern 
Mut.  Life  Ins.  Co.  v.  Montague,  84  Ky.  653. 


120  THE  CONTEAOT  —  CONSTITUENTS.  §  59 

of  law  that  a  written  contract  merges  all  prior  and  contempo- 
raneous negotiations  in  reference  to  the  same  subject,  and  that 
the  whole  engagement  of  the  parties  and  the  extent  and 
manner  of  their  undertaking  is  embraced  in  the  writing."  ^^ 

Mutual  Organization's. 

§  59.  When  a  policy  of  insurance  is  effected  in  a  mutual  in- 
surance company  the  insured  becomes  a  member  of  the  corpo- 
ration, and  is  held  to  have  notice  of  and  is  bound  by  all  the 
provisions  of  its  charter  and  by-laws  as  they  then  exist. 

A  policy  holder  in  a  mutual  insurance  company  or  asso- 
ciation stands  in  a  dual  position  and  relation.  He  is  both 
a  policy  holder  and  a  member.  He  is  alike  insurer  and 
insured,  but  in  both  capacities  he  is  a  member,  and  it  is 
because  he  is  a  member  that  he  occupies  both  of  these  posi- 
tions. His  liabilities  as  insurer  and  his  rights  as  insured 
depend  upon  the  obligations  and  conditions  of  his  member- 
ship. These  obligations  and  conditions  are  evidenced  by  the 
charter  or  articles  of  incorporation,  by  the  constitution  and 
by-laws  of  the  association,  and  by  his  application  for  and  cer- 
tificate of  membership,  and  by  the  law  of  the  place  of  the 
contract.^*^     The  insured  is  presumed  to  have  notice  of  the 

=^  Fowler  v.  Metropolitan  Life  Ins.  Co.,  116  N.  Y.  389,  5  L.  R.  A. 
805.  See  ante,  note  1;  Fuller  v.  Metropolitan  Life  Ins,  Co.,  70 
Conn,  647.  Compare  Wood  v.  Dwarris,  11  Exch.  493,  2  Bigelow, 
Life  &  Ace.  Rep,  418;  Campbell  v.  New  England  Mut.  Life  Ins.  Co., 
98  Mass.  281;  Higbee  v.  Guardian  Mut.  Life  Ins.  Co.,  53  N,  Y.  603. 

2"  Holland  v.  Supreme  Council  of  C.  F.,  54  N.  J,  Law,  490;  Thibert 
V.  Supreme  Lodge  K.  of  H.,  78  Minn.  448,  81  N,  W,  220;  Susque- 
hanna Mut.  Fire  Ins.  Co.  v,  Leavy,  136  Pa.  St.  499;  Lawler  v. 
Murphy,  58  Conn.  294,  8  L.  R.  A.  113;  American  Ins,  Co.  v.  Henley, 
60  Ind,  515;  Borgards  v.  Farmers'  Mut.  Ins.  Co.,  79  Mich.  440,  44 
N,  W.  856;  Donald  v.  Chicago,  B.  &  Q.  Ry.  Co.,  93  Iowa,  284,  33  L, 
R.  A.  492;  Home  Forum  Ben.  Order  v.  Jones,  5  Okla.  598;  Railway 
P.  &  F,  C,  Mut.  Aid  &  Ben,  Ass'n  v.  Robinson,  147  111.  138, 


i 


■^  60       AMENDMENTS  TO  CHARTER  OR  BY-LAWS.        121 

existence  and  contents  of  the  charter  and  by-laws  then  in 
force  from  the  date  of  his  membership,  and  they  are  as  bind- 
ing ujoon  both  the  member  and  the  beneficiary  or  payee  named 
in  the  certificate  as  is  the  certificate  itself,  even  though  they 
^re  not  specifically  incorporated  into  or  referred  to  in  the 
certificate.^^  The  rights  of  one  who  claims  against  an  order 
through  membership  in  one  of  its  subsocieties,  are  subject  to 
the  provisions  of  the  constitution  of  the  subsociety  to  which 
lie  belongs.^-  But  a  member  is  only  bound  by  such  rules, 
regulations  and  by-laws  as  have  been  properly  enacted,  and 
are  not  opposed  to  the  organic  law  of  the  association,  or  con- 
trary to  public  policy,  or  the  established  law  of  the  land. 
When  the  terms  of  a  policy  and  a  by-law  conflict,  the  former, 
if  intra  vires,  controls.'"'^ 

Same — Amendments  to  Charter  or  By-laws. 

§  60.  The  holder  of  a  certificate  in  a  mutual  benefit  associa- 
tion is  not  affected  by  the  adoption  of  new  or  the  modification 
of  existing  by-laws  without  his  consent. 

''  Supreme  Council  of  R.  A.  v.  Brashears.  89  Md.  624,  43  Atl. 
■866;  Cotter  v.  Grand  Lodge  A.  O.  U.  W.,  23  Mont.  82,  57  Pac.  650; 
Hass  V.  Mutual  Relief  Ass'n,  118  Cal.  6,  49  Pac.  1056;  Barbot  v. 
Mutual  Reserve  Fund  Life  Ass'n,  100  Ga.  681,  28  S.  E.  498,  and 
cases  supra.  See  Kendrick  v.  Ray,  173  Mass.  305,  53  N.  E.  823,  as  to 
effect  upon  creditor  seeking  to  reach  proceeds. 

=-  Polish  Roman  Catholic  Union  v.  Warczak,  182  111.  27,  55  N.  E.  64. 

»^  Davidson  v.  Old  People's  Mut.  Ben.  Soc,  39  Minn.  303;  Wiberg 
V.  Minnesota  S.  R.  Ass'n,  73  Minn.  301;  Morrison  v.  Wisconsin  Odd 
Fellows'  Mut.  L.  Ins.  Co..  59  Wis.  162,  18  N.  W.  13;  Luthe  v.  Farm- 
ers' Mut.  Fire  Ins.  Co..  55  Wis.  543,  13  N.  W.  490;  Fry  v.  Charter 
Oak  Life  Ins.-  Co.,  31  Fed.  197;  Mutual  Assur.  Soc.  v.  Korn,  7  Cranch 
(U.  S.),  396;  Doane  v.  Millville  Mut.  M.  &  F.  Ins.  Co.,  45  N.  J.  Eq. 
274.  See,  also,  Evans  v.  Trimountain  Mut.  Fire  Ins.  Co.,  9  Allen 
(Mass.),  329;  Hale  v.  Mechanics'  Mut.  Fire  Ins.  Co.,  6  Gray  (Mass.), 
169;  Brewer  v.  Chelsea  Mut.  Fire  Ins.  Co.,  14  Gray  (Mass.),  203; 
Sheldon  v.  Connecticut  Mut.  Life  Ins.  Co.,  25  Conn.  207. 


122  THE  COXTEACT — CONSTITUENTS.  §  Gl 

§  61.  The  consent  of  the  member  is  evidenced  by  his  accept- 
ance of  a  policy  which  in  terms  incorporates  the  charter  and 
by-laws  then  in  force  or  that  may  thereafter  be  enacted. 

Since  the  provisions  of  the  charter  and  by-laws  of  a  mutual 
organization  as  they  exist  at  the  time  of  the  issuing  of  a  cer- 
tificate to  a  member  are  an  integral  part  of  the  contract  be- 
tween the  parties,  it  follows  that  they  cannot  be  subsequently 
changed  at  the  will  of  the  company  without  the  consent  of  the 
insured.  Any  other  holding  would  violate  the  well  settled 
doctrine  of  contractual  rights  which  necessitates  the  mutual 
assent  of  the  contracting  parties  to  the  modification  or  alter- 
ation of  an  executory  contract.  Thus  a  change  in  a  by-law 
extending  the  time  for  payment  of  a  loss,  unless  pursuant  to  a 
reservation  of  the  power  in  the  insurer  so  to  do,  does  not  affect 
policies  issued  before  it  was  adopted ;  ^^  nor  the  enactment  of 
a  by-law  creating  a  forfeiture,^^  or  forbidding  the  assign- 
ment of  certificates,^®  or  reducing  the  classification  and  caiisea 
of  total  disability  under  an  accident  policy,^'^  or  creating  new 
conditions  precedent  to  reinstatement,^^  or  in  any  other  way 
affecting  the  rights  or  remedies  of  the  member.^^     A  contract 

"  Morrison  v.  Wisconsin  Odd  Fellows'  Mut.  L.  Ins.  Co.,  59  Wis, 
162,  18  N.  W.  13;  American  Ins.  Co.  v.  Stoy,  41  Mich.  385. 

^''Beclier  v.  Farmers'  Mut.  Fire  Ins.  Co.,  48  Mich.  610,  12  N.  W. 
874. 

=*  Wheeler  v.  Supreme  Sitting,  0.  of  I.  H.,  110  Mich.  437,  68  N.  W. 
229. 

«'  Starting  v.  Supreme  Council.  R.  T.  of  T.,  108  Mich.  440,  66  N.  W. 
340. 

^  Sieverts  v.  National  Benev.  Ass'n,  95  Iowa,  710,  64  N.  W.  671. 

'"  Carnes  v.  Iowa  State  Travelling  Men's  Ass'n,  106  Iowa,  281,  76 
N.  W.  683;  Supreme  Lodge,  K.  of  P.,  v.  Stein,  75  Miss.  107,  37  L.  R. 
A.  775;  Mutual  Aid  &  Instruction  Soc.  v.  Monti,  59  N.  J.  Law,  341, 
36  Atl.  666;  Rosenberger  v.  Washington  Mut.  Fire  Ins.  Co.,  87  Pa, 
St.  207;  Great  Falls  Mut.  Fire  Ins.  Co.  v.  Harvey,  45  N.  H.  292; 
Borgards  v.  Farmers'  Mut.  Ins.  Co.,  79  Mich.  440,  44  N.  W.  856. 
Compare  Pain  v.  Societe  St.  Jean  Baptiste,  170  Mass.  319,  52  N.  E. 
502. 


J 


§  61  AMENDMENTS   TO   CHARTER   OR   BY-LAWS.  123 

once  made  with  a  member  cannot  differ  in  its  essence  from  one 
made  with  anyone  else,  and  he  cannot,  without  his  consent, 
be  brought  into  changed  responsibilities  which  import  new 
terms  into  the  agreement  itself.  Whatever  force  unauthor- 
ized changes  in  the  charter  or  by-laws,  or  the  unauthorized 
adoption  of  new  by-laws  may  have  in  regard  to  other  matters, 
they  will  not  be  allowed  to  destroy  express  contracts  against 
the  will  of  the  insured.  But  changes  authorized  by  the 
charter  or  the  legislative  act  by  virtue  of  which  the  insurer 
is  created,  are  authorized  by  the  contract  itself. 

Whether  or  not  the  rights  of  a  member  are  subject  to  modi- 
fication by  the  subsequent  changes  in  the  by-laws  or  charter 
will  depend  upon  the  terms  of  the  contract.  If  it  provide 
that  members  shall  be  bound  by  all  articles  and  by-laws  then 
existing,  or  which  may  at  any  time  be  adopted,  the  company 
may  subsequently  alter  or  amend  its  by-laws  and  articles, 
and  members  will  be  thereby  iDound,  for  their  consent 
thereto  is  given  by  accepting  membership  upon  such  terms, 
and  conditions  to  this  effect  are  valid.  In  such  cases  changes 
are  made  not  in  violation  of  the  contract  but  in  harmony  with 
it.  The  acceptance  of  an  insurance  contract  in  the  form  of  a 
certificate  which  recites  that  any  violation  of  the  "require- 
ments of  the  laws  now  in  force  or  hereafter  enacted,  governing 
the  order  or  this  clause,  shall  render  this  certificate  null  and 
void,"  and  that  a  condition  iipon  which  it  depends  is  "the  full 
compliance  with  all  the  laws  of  the  order  now  in  force  or  that 
may  hereafter  be  enacted,"  makes  all  such  existing  by-laws  and 
those  subsequently  enacted  during  the  life  of  the  insured- 
a  part  of  the  contract,  binding  alike  upon  the  beneficiary  and 
the  member,  and  authorizes  the  adoption  of  a  new  by-law 
forfeiting  the  certificate  if  the  insured  should  take  his  own 
life  sane  or  insane,^*^  or  a  by-law  providing  for  forfeiture  of 

"Supreme  Commandery,  K.  of  G.  R.,  v.  Ainsworth,  71  Ala.  436; 


124  THE  CONTRACT  —  CONSTITUENTS.  §  61 

memberslilp  of  tliose  wlio  follow  a  proliibited  occupation.^^ 
And  so  wliere  the  change  is  pursuant  to  the  general  law  of 
the  domicile  of  the  corporation  which  gives  the  right  to 
alter  or  amend  by-laws,^^  for  the  parties  will  be  presumed 
to  have  contracted  with  reference  to  such  laws  as  in  their 
direct  or  necessary  legal  operation  controlled  or  affected  the 
obligations  of  the  contract. 

A  stipulation  in  the  certificate  that  the  member  is  bound 
by  all  the  lawful  "by-laws,  rules  and  regulations  of  the 
association"  relates  only  to  those  in  existence  when  the  con- 
tract is  consummated  and  does  not  authorize  the  insurer  to 
thereafter  change  the  contractual  rights  of  the  insured. ^^     As 

Fullenwider  v.  Supreme  Council,  R.  L.,  180  111.  621,  54  N.  E.  485; 
Daughtry  v.  Knights  of  Pythias,  48  La.  Ann.  1203;  Supreme  Lodge, 
K.  of  P..  V.  Kutscher,  179  111.  340,  53  N.  E.  620. 

*^  Loeffler  v.  Modern  Woodmen,  100  Wis.  79,  75  N.  W..  1012.  See, 
also,  Duer  v.  Supreme  Council,  0.  of  C.  F.,  21  Tex.  Civ.  App.  493,  52 
S.  W.  109;  Supreme  Council,  A.  L.  of  H.,  v.  Adams,  68  N.  H.  236,  44 
Atl.  380;  Connelly  v.  Masonic  Mut.  Ben.  Ass'n,  58  Conn.  552,  9  L. 
R.  A.  428;  Supreme  Lodge,  K.  of  P.,  v.  Trebbe,  179  111.  348;  Pain  v. 
Societe  St.  Jean  Baptiste,  172  Mass.  319,  52  N.  E.  502;  Allen  v.  Life 
Ass'n  of  America,  8  Mo.  App.  52;  McKean  v.  Biddle,  181  Pa.  St.  361; 
Hass  V.  Mutual  Relief  Ass'n,  118  Cal.  6,  49  Pac.  1056;  Supreme 
Lodge,  K.  of  P.,  V.  La  Malta,  95  Tenn.  157,  30  L.  R.  A.  838. 

^Stohr  V.  San  Francisco  M.  F.  Soc,  82  Cal.  557;  Sargent  v.  Su- 
preme Lodge,  K,  of  H.,  158  Mass.  557;  ante,  note  13.  See,  as  to 
the  right  of  a  corporation  to  change  its  by-laws,  when  authorized 
by  its  charter,  though  it  may  affect  the  rights  of  stockholders, 
Schrick  v.  St.  Louis  Mut.  House  Bldg.  Co.,  34  Mo.  423;  Northern  R. 
Co.  V.  Miller,  10  Barb.  (N.  Y.)  283;  Hyatt  v.  McMahon,  25  Barb. 
(N.  Y.)  468;  Currie's  Adm'rs  v.  Mutual  Assur.  Co.,  4  Hen.  &  M. 
<Va.)  315;  Supreme  Commandery,  K.  of  G.  R.,  v.  Ainsworth,  71  Ala. 
443.  But  causes  of  forfeiture  cannot  be  added  by  new  by-laws.  In- 
surance Co.  V.  Connor.  17  Pa.  St.  136;  Beadle  v.  Chenango  County 
Mut.  Ins.  Co.,  3  Hill  (N.  Y.),  161;  Great  Falls  Mut.  Fire  Ins.  Co.  v. 
Harvey,  45  N.  H.  292. 

"Sieverts  v.  National  Benev.  Ass'n,  95  Iowa,  710,  64  N.  W.  671; 
McNeil  V.  Southern  T.  M.  Relief  Ass'n,  40  App.  Div.  581,  58  N.  Y. 
Supp.  119. 


§  62  AMENDMENT   MUST   BE    REASONABLE.  125 

a  member  of  an  association  one  may  be  bound  by  new  bj-laws 
as  applied  to  agreements  made  after  tbeir  adoption,  but  not 
as  to  those  already  made.^*  In  any  event  a  member  is  only 
absolutely  bound  by  such  amendments  or  additions  to  the  by- 
laws as  are  made  by  the  proper  law-making  body  of  the  associ- 
ation in  proper  form,  after  the  required  notice  has  been  given, 
and  after  full  compliance  with  the  conditions  prescribed  in 
the  existing  charter  and  by-laws ;  ^^  yet  he  may  by  his  silence 
assent  to,  or  by  his  conduct  ratify  so  that  he  will  thereafter 
be  estopped  to  object  to,  a  change  in  the  terms  of  his  contract 
which  would  not  otherwise  have  been  binding  upon  him.''^ 

Amendment  Must  be  Reasonable. 

§62.  Provisions  of  a  contract  binding  a  member  to  comply 
with  both  existing  and  subsequently  enacted  by-laws,  etc., 
are  subject  to  the  implied  condition  that  any  changes  there- 
after made  in  the  contract  by  the  act  of  the  insurer  shall  be 
reasonable. 

In  ordinary  cases  one  Avho  has  consented  to  become  a 
member  of  a  voluntary  association  subject  to  the  charter 
and  by-laws  then  in  force  and  which  may  be  thereafter 
enacted  or  adopted,  will  be  bound  by  his  agreement  and  will 
not  be  heard  to  complain  that  its  terms  are  harsh  or  inequi- 
table. New  by-laws,  or  amendments  to  old  ones,  fairly  and 
honestly  enacted  by  the  association  in  accordance  with  its 

"  Hobbs  V.  Iowa  Mut.  Ben.  Ass'n,  82  Iowa,  107,  47  N.  W.  983, 

« Morris  v.  Farmers'  Mut.  Fire  Ins.  Co.,  63  Minn.  420,  65  N.  W. 

656;    Supreme    Lodge,  K.  of  P.,  v.  Trebbe,  179    111.  348;     Supreme 

Lodge,  K.  of  P.,  V.  Kutscher,  179  111.  340,  53  N.  E.  620;   Marten  v. 

Mutual  Fire  Ins.  Co.,  45  Md.  51;   Supreme  Lodge,  K.  of  P.,  v.  La 

Malta,  95  Tenn.  157.  30  L.  R.  A.  838;    Supreme  Lodge,  K.  of  P.,  v. 

Stein.  75  Miss.  107.  37  L.  R.  A.  775.  21  So.  559. 

^'Borgards   v.  Farmers'   Mut.   Ins.    Co.,   79   Mich.    440,   44  N.   W. 

856;   Thibart  v.  Supreme  Lodge,  K.  of  H.,  78  Minn.  448.  81  N.  W. 

220,  47  L.  R.  A.  136. 


126.  THE   CONTRACT CONSTITUENTS.  §  G2 

rules,  and  not  contrary  to  public  policy  or  the  law  of  the  land, 
are  usually  binding  upon  its  members.  The  courts  ^Yill  not 
interfere  except  where  substantial  property  rights  are  in- 
volved, and  then  only  to  ascertain  whether  or  not  the  pro- 
ceedings were  reasonable  and  conducted  pursuant  to  and  in 
accordance  with  the  rules  and  laws  of  the  society,  whether 
they  were  taken  in  good  faith  or  maliciously  and  mala  fide, 
whether  they  were  contrary  to  public  policy  or  the  established 
law,  and  sometimes  whether  they  were  contrary  to  natural 
justice.'*'^ 

Where  there  is  a  reservation  of  the  right  to  amend  the  by- 
laws, each  member  is  bound  to  take  notice  of  the  existence 
and  effect  of  that  power.  He  has  no  right  to  presume  that  the 
by-laws  will  remain  unchanged.  "The  duly  chosen  and  au- 
thorized representatives  of  the  members  are  vested  with  the 
power  of  determining  when  a  change  is  demanded,  and  with 
their  discretion  courts  cannot  interfere.  *  *  *  It  is  only 
when  there  is  an  abuse  of  discretion  and  a  clear,  unreasonable 
and  arbitrary  invasion  of  private  rights,  that  courts  will  as- 
sume jurisdiction."  They  will  "compel  adherence  to  the 
charter  and  to  the  purpose  for  which  the  society  was  organ- 
ized, but  they  will  not  do  more.  *  *  *  To  justify  inter- 
ference by  the  courts,  and  warrant  the  overthrow  of  by-laws 
enacted  in  the  mode  prescribed  by  the  by-laws,  it  must  be 
shown  that  there  was  an  abuse  of  power,  or  that  the  later  by- 
law is  unreasonable."  ^^     While  the  courts  will  not  control 

*^  Connelly  v.  Masonic  Mut.  Ben.  Ass'n,  58  Conn.  552,  9  L.  R.  A. 
428;  Hopkinson  v.  Marquis  of  Exeter,  L.  R.  5  Eq.  66;  Lambert  v. 
Addison,  46  Law  T.  (N.  S.)  20,  25  Alb.  Law  J.  418;  Mead  v.  Stirling, 
62  Conn.  586,  23  L.  R.  A.  227;  Failey  v.  Fee,  83  Md.  83,  32  L.  R.  A. 
311. 

"Supreme  Lodge,  K.  of  P.,  v.  Knight,  117  Ind.  489,  3  L.  R.  A. 
409;  Allnutt  v.  Subsidiary  High  Court,  A.  O.  of  F.,  62  Mich.  110; 
Crossman  v.  Massachusetts  Ben.  Ass'n,  143  Mass.  435. 


>§  62  AMENDMENT   MUST    BE    REASONABLE.  127 

the  exercise  of  discretionary  powers,  or  direct  the  course  o£ 
an  action  in  matters  of  expediency  or  policy,  tliey  \d\l  not 
allow  a  benefit  society  by  changing  its  by-laws  to  arbitrarily 
repudiate  a  policy  of  insurance,  or  to  destroy  a  vested  right, 
or  to  seriously  impair  the  contractual  rights  of  a  member  by 
any  arbitrary  or  unreasonable  exercise  of  power.^^  In  a  re- 
cent case  in  Minnesota,  the  question  was  as  to  the  validity  oi'. 
a  by-law  taking  away  from  a  member  the  right  to  a  written  or 
printed  notice  of  assessments,  and  substituting  a  notice  pub- 
lished in  a  newspaper  with  a  provision  that  failure  to  get  the 
notice  should  not  relieve  a  member  from  the  suspension 
consequent  upon  non-payment  of  the  assessments.  The  court 
said :  "It  is  possible  that,  as  an  original  by-law,  a  provision 
of  this  character  would  be  held  reasonable  and  operative  on 
the  ground  that,  if  persons  chose  to  become  members  of  an 
association  with  such  drastic  rules,  theirs  was  the  right  so  to 
■do.  But  this  was  not  the  law  when  the  plaintiff  united  with 
his  lodge.  The  question  is  not  as  to  the  reasonableness  of  a 
by-law  in  force  when  he  cast  liis  fortunes  with  the  order,  but 
it  is  as  to  the  reasonableness  of  a  change  in  a  by-law  after  he 
became  a  member,  and  of  which  it  was  not  shown  that  he  had 
any  personal  knowledge.  In  fact  it  has  been  held  that  pro- 
visions for  forfeitures  in  the  original  by-laws  of  mutual 
benefit  societies,  without  providing  for  notice  or  giving  an 
opportunity  to  be  heard,  are  void  because  unreasonable. 
^"  *  *  The  rights  of  members  in  these  associations  must,  of 
course,  depend  upon  the  articles  or  by-laws  to  which  all  mem- 
bers assent  when  becoming  such;  and,  generally  speaking,' 
the  same  body  which  is   authorized  to  make  by-laws   can 

*»  Jarman  v.  Knights  Templars'  &  M.  Life  Ind.  Co.,  95  Fed,  70 ;  Su- 
preme Council,  L.  of  H.,  v.  Adams,  68  N.  H.  236,  44  All.  380;  Su- 
preme Tert,  K.  of  M.,  v.  Hammers,  81  111.  App.  560.  Compare  Pain 
V.  Societe  St.  Jean  Baptiste,  172  Mass.  319,  52  N.  E.  502. 


128  THE   CONTKACT CONSTITUENTS.  §  62: 

change,  amend,  or  repeal  those  already  made;  and  to  this 
plaintiff  agreed  when  he  joined.  But  changes,  amendments 
and  repeals  are  subject  to  the  restrictions  and  limitations  of 
the  by-laws  themselves  as  well  as  those  of  the  charter  or 
articles  of  association,  and  are  also  subject  to  the  implied  con- 
dition of  being  reasonable.  *  *  *  "W'e  are  compelled 
to  hold  that  a  change  or  amendment  to  the  by-law  in  force 
when  plaintiff  entered  the  association  whereby  it  was  incum- 
bent upon  the  reporter  of  his  lodge  to  give  him  notice  of 
assessments,  if  or  a  greater  or  less  number  than  two,  which 
deprived  him  of  all  right  to  any  notice,  either  directly  or 
indirectly,  by  means  of  a  provision  rendering  a  failure  to  give 
notice  as  determined  upon  by  his  lodge  wholly  immaterial,  was 
a  vitally  important  change,  and,  as  to  him,  unreasonable  and 
void."^"  And  similarly  it  has  been  held  by  a  federal  court 
that  a  provision  in  a  contract  subjecting  the  rights  of  a  mem- 
ber in  a  society  to  the  rules  and  regulations  then  existing  or 
as  they  might  be  changed,  does  not  authorize  the  society  to 
change  its  rules  so  as  to  deprive  the  members  of  part  of  the 
benefits  guaranteed  him  by  his  policy.^  ^ 

^'>  Thibert  v.  Supreme  Lodge,  K.  of  H.,  78  Minn.  448,  81  N.  W.  220, 
47  L.  R.  A.  136. 

"  Jarman  v.  Knights  Templars'  &  M.  Life  Ind.  Co.,  95  Fed.  70,  53 
Cent.  L.  J.  391. 


CHAPTER  VI. 

THE  CONTRACT  (Oowiinued)— INTERPRETATION. 

§  63.  General  Principles  of  Construction. 

64.  Intent  of  the  Parties  Important. 

65.  Ambiguities. 

66.  Restrictions  and  Forfeitures. 

67.  Writing  Controls  Print.  ' 

68.  The  Law  of  the  Place. 

69.  Custom  and  Usage. 

70.  Standard  Policies. 

71.  Policies  of  Mutual  Organizations. 

General  Principles  of  CoNSTRUCTioiir. 

§  63.  Insurance  contracts  are  to  be  interpreted  by  rules  ap- 
plicable to  other  contracts,  and  to  be  enforced  in  accordance 
with  the  expressed  intention  of  the  parties. 

It  lias  been  fitly  said  that  common  sense  and  a  desire  to  pro- 
mote and  enforce  good  faith  should  be  the  chief  guides  in  the 
interpretation  of  contracts.  Policies  of  insurance  are  pre- 
sumed to  contain  the  complete  engagements  of  both  insurer 
and  insured  in  regard  to  the  subject  matters  embraced  in 
them.  They,  like  all  other  contracts,  must  be  construed 
according  to  the  intention  of  the  parties  as  manifested  by  the 
words  used  and  accordino;  to  their  ordinary  signification. 
When  words  are  used  which  have  an  usual  and  common 
acceptation  they  will  be  given  their  plain,  natural  and  obvious 
meaning,  unless  it  affirmatively  and  clearly  appears  that 
they  were  not  intended  to  have  such  meaning.  Courts  can- 
not make  contracts  for  parties,  or  render  a  party  liable  on  a 
different  basis  from  that  upon  which  his  liability  was  stipu- 
KERR,  INS.— 9 


130  THE  CONTRACT INTERPRETATION:  §  63 

lated  for.^  It  is  the  duty  of  the  court  in  all  cases  where  the 
question  is  simply  the  determination  of  the  meaning  of  a 
written  document,  to  declare  its  legal  interpretation ;  and  it  is 
error  to  leave  its  construction  to  a  jury.^  But  where  the 
contract  relates  to  matters  or  business  of  a  technical  char- 
acter, and  contains  terms  or  words  having  a  technical  or 
peculiar  application  and  meaning  in  such  matters  or  business, 
resort  may  be  had  to  the  testimony  of  experts  or  those  ac- 
quainted with  the  particulars  to  which  the  terms  and  words 
relate,  and  where  such  testimony  is  conflicting,  the  question 
of  the  meaning  of  such  terms  and  words  may  be  referred  to 
a  jury.3 

In  case  of  ambiguity  that  construction  should  be  given 
which  will  give  the  policy  effect  rather  than  that  which  will 
make  it  void.*  Having  indemnity  for  their  object,  policies 
will  be  liberally  construed  to  that  end.  Hence  a  liberal 
construction,  if  it  is  a  reasonable  one  and  will  prevent  injus- 
tice, should  be  adopted  when  a  literal  construction  would 

*Foot  V.  Aetna  Life  Ins.  Co.,  61  N.  Y.  571';  O'Neil  v.  Pleasant 
Prairje  Mut.  Fire  Ins.  Co.,  71  Wis.  621,  38  N.  W.  345;  Mississippi 
Mut.  Ins.  Co.  V.  Ingram,  34  Miss.  215;  Goodrich  v.  Treat,  3  Colo. 
408;  Supreme  Council,  R.  T.  of  T.,  v.  Curd,  111  111.  284.  In  Walsh  v. 
Hill,  38  Cal.  481,  the  court  said:  "In  the  construction  of  written  in- 
struments, we  have  never  derived  much  aid  from  the  technical 
rules  of  the  hooks.  The  only  rule  of  much  value — one  which  is  fre- 
quently shadowed  forth,  but  seldom,  if  ever,  expressly  stated  in  the 
books — is  to  place  ourselves  as  near  as  possible  in  the  seats  which 
were  occupied  by  the  parties  at  the  time  the  instrument  was  exe- 
cuted; then,  taking  it  by  its  four  corners,  read  it." 

^Dwight  V.  Germania  Life  Ins.  Co.,  103  N,  Y.  341;  Johnson  v. 
Northwestern  Nat.  Ins.  Co.,  39  Wis.  87;  Thurston  v.  Burnett  &  B. 
D.  F.  Mut.  Fire  Ins.  Co.,  98  Wis.  476,  74  N.  W.  131. 

'  Whitmarsh  v.  Conway  Fire  Ins.  Co.,  16  Gray  (Mass.),  359; 
Home  Mut.  Ins.  Co.  v.  Roe,  71  Wis.  33,  36  N.  W.  594. 

*  Harper  v.  Albany  Mut.  Ins.  Co.,  17  N.  Y.  194. 


§  G3  GENERAL   PRINCIPLES    OF    CONSTRUCTION.  131 

lead  to  manifest  injustice.^  The  whole  contract,  whether 
composed  of  one  or  several  instruments,  must  be  read  and 
construed  together,  and  indorsements  referred  to  may  be  con- 
sidered in  arriving  at  their  meaning;^  v/here  words  used 
are  in  their  import  equivocal,  reference  may  be  had  to  the 
subject  matter  and  the  circumstances  surrounding  and  con- 
nected with  the  procuring  of  the  policy;"^  and  parol  evidence 
is  admissible  to  establish  a  fact  collateral  to  the  written  con- 
tract.^ An  insurer  is  presumed  to  know  what  is  obvious  in 
regard  to  the  property  insured.*  Unless  the  language  used 
excludes  the  presumption,  a  policy  of  fire  insurance  must 
be  presumed  to  have  been  made  with  reference  to  the  nature 
and  character  of  the  property  insured,  and  to  the  owner's  use 
of  it  in  the  ordinary  manner,  and  for  the  purposes  for  which 
such  property  is  ordinarily  held  and  used.^''  If  reading  a 
policy  in  connection  with  the  subject  matter  and  surrounding 
circumstances,  and  giving  to  the  language  used  its  ordinary 
and  natural  meaning,  the  intention  of  the  parties  becomes 
manifest  such  intention  must  prevail ;  and  when  a  reasonable 

"Mauger  v.  Holyoke  Mut.  Fire  Ins.  Co.,  1  Holmes,  287,  Fed.  Cas. 
No.  9.305;  Miller  v.  Insurance  Co,.  12  W.  Va.  116;  Matthews  v. 
American  Cent.  Ins.  Co..  154  N.  Y.  449.  39  L.  R.  A.  433;  Brink  v. 
Merchants'  &  Mechanics'  Ins.  Co.,  49  Vt.  442;  State  Ins.  Co.  v. 
Hughes,  10  Lea  (Tenn.),  461;  Teutonia  Fire  Ins.  Co.  v.  Mund,  102 
Pa.  St.  89. 

«St.  Clair  County  Benev.  Soc.  v.  Fietsam,  97  111.  474;  post,  §  64; 
ante,  §  58. 

'Haws  V.  Philadelphia  Fire  Ass'n,  114  Pa.  St.  431;  Monroe  B.  & 
L.  Ass'n  V.  Liverpool  &  L.  &  G.  Ins.  Co.,  50  La.  Ann.  1243,  24  So. 
238;  Kenyon  v.  Knights  Templar  &  M.  Mut.  Aid  Ass'n,  122  N.  Y. 
247;  Voss  v.  Connecticut  Mut.  Life  Ins.  Co.,  119  Mich.  161,  77  N.  W. 
697;  Teutonia  Fire  Ins.  Co.  v.  Mund.  102  Pa.  St.  89. 

*  Planters'  Mut.  Ins.  Co.  v.  Deford,  38  Md.  382. 

"Hey  V.  Guarantors'  Liability  Ind.  Co..  181  Pa.  St.  220. 

"Boright  V.  Springfield  F.  &  M.  Ins.  Co.,  34  Minn.  353;  Holbrook 
V.  St.  Paul  F.  &  M.  Ins.  Co..  25  Minn.  229. 


132  THE  CONTEACT INTERrRETATION.  §  63- 

construction  can  be  placed  upon  the  words  tliemselves  without 
resorting  to  extrinsic  evidence,  such  evidence  is  inadmis- 
sible.ii 

An  insurer  which  continues  to  use  a  form  of  policy  that 
has  been  uniformly  construed  by  the  highest  courts  of  the 
state  which  granted  its  charter  and  by  other  courts  of  last 
resort,  will  be  presumed  to  have  contracted  with  that  con- 
struction in  view.^^  A  policy  renewed  from,  year  to  year  will 
be  construed  in  respect  to  the  condition  of  the  property  at 
the  date  of  the  last  renewal.^^  A  life  insurance  policy  is- 
held  to  be  a  single  and  entire  contract  commencing  witJi  its 
issuance,  continuing  during  the  life  of  the  insured  or  the 
time  stated,  and  subject  to  breach  or  discontinuance  for  viola- 
tion or  nonperformance  of  its  conditions.-^*  In  so  far  as  it 
evidences  the  intention  of  the  insured  to  dispose  of  the  pro- 
ceeds of  the  insurance  it  is  in  the  nature  of  a  will.^^  Con- 
ditions and  limitations,  or  words  of  exception  will  be  rigidly 
construed,  and  if  capable  of  two  meanings,  will  be  given 
that  one  which  is  most  favorable  to  the  insured  ;^^  but  a 
special  clause  which  creates  an  exception  to  a  general  one, 
governs  the  latter  when  the  meaning  is  clear. ^'^     Stipulations 

"Johnson  v.  Northwestern  Nat.  Ins.  Co.,  39  Wis.  87;  Foot  v.  Aetna 
Life  Ins.  Co.,  61  N.  Y.  571;  De  Graff  v.  Queen  Ins.  Co.,  38  Minn. 
501;  Paul  v.  Travelers'  Ins.  Co.,  112  N.  Y.  472;  West  v.  Citizens' 
Ins.  Co.,  27  Ohio  St.  1;  Baltimore  Fire  Ins.  Co.  v.  Loney,  20  Md.  36. 

"Fidelity  &  Casualty  Co.  v.  Loewenstein  (C.  C.  A.),  97  Fed.  17, 
46  L.  R.  A.  450,  88  Fed.  474. 

"  Garrison  v.  Farmers'  Mut.  Fire  Ins.  Co.,  56  N.  J.  Law,  235, 
28  Atl.  8. 

"Fearn  v.  Ward,  80  Ala.  555;  Goodwin  v.  Provident  Sav.  L. 
Assur.  Soc,  97  Iowa.  226,  32  L.  R.  A.  473. 

"Chartrand  v.  Brace.  16  Colo.  19.  12  L.  R.  A.  209. 

^"Fidelity  &  Casualty  Co.  v.  Chambers,  93  Va.  138,  24  S.  E.  896; 
Burkard  v.  Travellers'  Ins.  Co.,  102  Pa.  St.  262. 

"  Mitchell  Furniture  Co.  v.  Imperial  Fire  Ins.  Co.,  17  Mo.  App.. 
627;  Grandin  v.  Rochester  German  Ins.  Co.,  107  Pa.  St.  26. 


§  64:  INTEXT    OF    PARTIES.  133 

which  relate  merely  to  the  procedure  after  a  loss  will  be 
reasonably  and  not  rigidly  construed. ^^  The  assertions, 
promises,  representations,  or  construction  of  an  agent  cannot 
prevail  over  the  plain  and  unambiguous  provisions  of  a 
policy.  ^^ 

The  practical  interpretation  of  an  agreement  by  the  parties 
to  it  is  always  a  consideration  of  great  weight. ^^  Punctua- 
tion is  an  uncertain  aid  to  construction.  "It  may  be  resorted 
to  when  other  means  fail ;  but  the  court  will  take  the  instru- 
ment by  its  four  corners  in  order  to  ascertain  its  meaning. 
If  that  is  apparent  on  judicially  inspecting  the  whole,  the 
punctuation  will  not  be  suffered  to  change  it."  The  words 
control  the  punctuation  marks  and  not  the  punctuation  marks 
the  words. ^^ 

Intent  of  Parties. 

§  64.  A  policy  should,  if  possible,  be  so  construed  as  to  carry- 
out  the  object  and  intent  of  the  parties;  but  purpose  or  intent 
cannot  supersede  the  plain  and  unambiguous  language  of  the 
policy.  The  intention  of  the  parties  as  gathered  from  the 
whole  contract  must  control. 

The  performance  of  a  contract  should  be  such  as  is  re- 
quired by  the  spirit  and  meaning  of  the  contract,  and  the  in- 
tention of  the  parties  as  expressed  therein.  When  it  is 
possible  to  detennine  from  a  policy  upon  what  terms  the 
minds    of    the    parties  met,     the    courts    must    interpret 

^*  Paltrovitch  v.  Phoenix  Ins.  Co.,  143  N.  Y.  73,  25  L.  K.  A.  198. 

'"Quinlan  v.  Providence  W.  Ins.  Co.,  133  N.  Y.  360;  Chamberlain 
V.  Prudential  Ins.  Co.  (Wis.),  85  N.  W.  128;  Wilkins  v.  State  Ins. 
Co.,  43  Minn.  177;  Lycoming  Fire  Ins.  Co.  v.  Langley,  62  Md.  196; 
post,  c.  8,  "Agents." 

="  Brooklyn  Life  Ins.  Co.  v.  Dutcher,  95  U.  S.  269. 

-^Boright  V.  Springfield  F.  &  M.  Ins.  Co.,  34  Minn.  353;  Ewing's 
Lessee  v.  Burnet,  11  Pet.  (U.  S.)  41;  Holmes  v.  Phoenix  Ins.  Co., 
98  Fed.  240,  47  L.  R.  A.  308. 


134:  THE  CONTRACT INTERPRETATION.  §  G5 

and  give  effect  to  the  policy  according  to  tlie  intent 
thereby  evidenced.  When  the  language  of  the  policy  is  ob- 
scure, resort  may  be  had  to  the  nature  and  subject  matter 
of  the  risk  and  the  circumstances  surrounding  the  procuring 
and  issuing  of  the  policy,  for  the  purpose  of  discovering 
what  the  actual  purpose  and  intent  of  the  parties  was.  But 
an  unexpressed  intent  cannot  contradict,  vary,  or  control  the 
clear  intent  of  the  parties  as  expressed  in  the  writings  which 
they  have  deliberately  executed.  The  question  then  is  not 
what  the  parties  intended,  but  what  means  the  language  they 
have  employed.^^  When  the  contract  has  been  partly  exe- 
cuted, there  is  no  surer  way  to  find  out  what  the  parties 
meant  than  to  see  what  they  have  done.^^ 

Ambiguities. 

§  65.  When  the  language  of  a  policy  is  ambiguous,  it  is  taken 
most  strongly  against  the  insurer. 

If  there  is  a  seeming  inconsistency  between  different  pro- 
visions of  a  policy  a  court  will  endeavor  to  give  effect  to  both ; 
but  if  the  meaning  is  ambiguous,  or  if  the  policy  is  so  drawn 
as  to  require  interpretation  and  to  be  fairly  susceptible  of  two 

'"Merchants'  Mut.  Ins.  Co.  v.  Lyman,  15  Wall.  (U.  S.)  664;  Union 
Mut.  Life  Ins.  Co.  v.  Mowry,  96  U.  S.  544;  Quinlan  v.  Providence 
W.  Ins.  Co.,  133  N.  Y.  360;  Foot  v.  Aetna  Life  Ins.  Co.,  61  N.  Y. 
571;  Wells,  Fargo  &  Co.  v.  Pacific  Ins.  Co.,  44  Cal.  397;  Blinn  v. 
Dresden  Mut.  Fire  Ins.  Co.,  85  Me.  389;  Montgomery  v.  Firemen's 
Ins.  Co.,  16  B.  Mon.  (Ky.)  427;  The  Sydney,  27  Fed.  119;  Johnson 
V.  Northwestern  Nat.  Ins.  Co..  39  Wis.  87;  Schreiber  v.  German 
American  H.  Ins.  Co.,  43  Minn.  367;  St.  Nicholas  Ins.  Co.  v.  Mer- 
chants' Ins.  Co.,  11  Hun  (N.  Y.),  108;  cases  ante;  Supreme  Council, 
R.  T.  of  T.,  V.  Curd,  111  111.  284.  Oral  evidence  admissible  to  show 
the  "understanding,"  Ganser  v.  Fireman's  Fund  Ins.  Co.,  38 
Minn.  74. 

=^  Brooklyn  Life  Ins.  Co.  v.  Butcher,  95  U.  S.  269;  Ganser  v. 
Fireman's  Fund  Ins.  Co.,  38  Minn.  74. 


§  66  KESTRICTIONS   AND   FORFEITURES.  135 

different  constructions,  the  one  will  Be  adopted  that  is  most 
favorable  to  the  insured.  This  rule,  recognized  in  all  the 
authorities,  is  a  just  one,  because  the  instrument  is  drawn 
by  the  insurer.  It  is  its  language  which  the  court  is  invited 
to  interpret,  and  it  is  reasonable  that  its  own  words  should 
be  construed  most  strongly  against  itself.^'*  Courts  are  al- 
ways reluctant  to  deprive  an  insured  of  the  benefits  of  a 
policy  by  any  narrow  or  technical  construction  of  the  con- 
ditions, or  stipulations,  or  exceptions,  which  limit  the  scope 
of  the  liability  of  the  insurer  or  impose  upon  the  insured 
conditions  precedent  to  his  right  to  recover. ^5  But  this  rule 
is  only  to  be  applied  where  there  is  doubt  as  to  the  intent  of  the 
parties  and  as  to  the  meaning  of  the  language  used ;  and  has 
no  application  where  there  is  no  ambiguity  and  no  incon- 
sistent or  conflicting  provisions.^® 

Restriction's  and  Forfeituiies. 

§  66.  Conditions  and  stipulations  whose  meaning  is  doubt- 
ful will  be  so  construed  as  to  avoid,  rather  than  to  create,  for- 
feitures, and  against  the  one  for  whose  benefit  they  were  im- 
posed.2' 

**  Atlantic  Ins.  Co.  v.  Manning,  3  Colo.  224;  Burkhard  v.  Trav- 
ellers' Ins.  Co..  102  Pa.  St.  262;  Allen  v.  St.  Louis  Ins.  Co.,  85  N.  Y. 
473;  London  Assurance  v,  Companhia  de  Moagens,  167  U.  S.  150; 
Northwestern  Mut.  Life  Ins.  Co.  v.  Hazel ett,  105  Ind.  212;  Hardesty 
V.  Forest  City  Ins.  Co.,  77  111.  App.  413. 

"Burkheiser  v.  Mutual  Ace.  Ass'n  (C.  C.  A.),  61  Fed.  816,  26  L. 
R.  A.  112;  Burnett  v.  Eufaula  Home  Ins.  Co.,  46  Ala.  11;  Commer- 
cial Ins.  Co.  V.  Robinson.  64  111.  265;  Matthews  v,  American  Cent. 
Ins.  Co.,  154  N.  Y,  449,  39  L.  R.  A.  433;  State  Ins.  Co.  v.  Maackens, 
38  N.  J.  Law,  564;  Sergent  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  155 
N.  Y.  349;  American  Surety  Co.  v.  Pauly,  170  U.  S.  133,  160; 
Schroeder  v.  Trade  Ins.  Co..  109  111.  157. 

^«Foot  V.  Aetna  Life  Ins.  Co.,  61  N.  Y.  571;  Holmes  v.  Phenls 
Ins.  Co.  (C.  C.  A.).  98  Fed.  240.  47  L.  R.  A.  308;  Thurston  v.  Bur- 
nett &  B.  D.  F.  Mut.  Fire  Ins.  Co.,  98  Wis.  476,  74  N.  W.  131. 

"Eastern  R.  Co.  v.  Relief  Fire  Ins.  Co.,  98  Mass.  420;  Martin  v. 


136  the  contract  —  interpretation.         §§  67,  68 

Writing  Controls  Print. 

§  67.  Where  the  written  and  printed  portions  of  a  policy- 
conflict,  the  former  control. 

It  frequently  happens  tliat  special  printed  or  written  slips 
are  attached  to  the  body  of  the  general  form  of  policy  used. 
For  the  purposes  of  construction,  such  special  slips  are  to 
be  regarded  as  part  of  what  is  known  as  the  written  part  of 
the  policy,  which,  as  more  clearly  and  immediately  expressive 
of  the  intention  of  the  parties,  is  allowed  a  controlling  force 
in  case  of  repugnancy  between  it  and  the  agreements  which 
(as  applicable  to  policies  in  general)  are  found  in  what  is 
termed  the  printed  blank  or  form.^^  This  is  subject  to  the 
rule  that  words  of  exception  are  construed  most  strongly 
against  the  one  for  whose  benefit  they  were  intended.^' 

The  Law  of  the  Place. 

§68.  The  general  rule  is  that  the  law  of  the  place  where  a 
contract  is  made  governs  as  to  the  nature,  the  obligation  and 
the  interpretation  of  it.  The  parties  may  stipulate  for  a  differ- 
ent rule  of  construction. 

Obligations  in  respect  to  the  mode  of  their  solemnization 
are  subject  to  the  rule  locus  actum  regit;  in  respect  to -their 
interpretation,  to  the  lex  loci  contractus;  in  respect  to  the 
mode  of  their  performance  to  the  law  of  the  place  of  per- 
formance.    Matters  bearing  upon  the  interpretation  and  va- 

Manufacturers'  Ace.  Ind  Co.,  151  N.  Y.  94;  Piedmont  &  A.  Life  In?. 
Co.  V.  Young,  58  Ala.  476;  McNamara  v.  Dakota  F.  &  M.  Ins.  Co., 
1  S.  D.  342,  47  N.  W.  288;  Griffey  v.  New  York  Cent.  Ins.  Co.,  100 
N.  Y.  417;  State  Ins.  Co.  v.  Maackens,  38  N.  J.  Law,  564. 

=*Mascott  V.  Granite  State  Fire  Ins.  Co.,  68  Vt.  253;  Fire  Ins. 
Ass'n  of  England  v.  Merchants'  &  Miners'  Transp.  Co.,  66  Md.  339; 
West  Branch  Lumberman's  Exchange  v.  American  Cent.  Ins.  Co.. 
183  Pa.  St.  366;  Phoenix  Ins.  Co.  v.  Taylor,  5  Minn.  492   (Gil.  393). 

» Canton  Ins.  Office  v.  Woodside  (C.  C.  A.),  90  Fed.  301. 


i 


■g  68  TUE  LAW  OF  THE  PLACE.  13T 

lidity  of  a  policy  of  insurance  are  to  be  determined  by  the  law 
•of  the  place  where  it  is  made  unless  the  parties  have  stipu- 
lated otherwise.  The  remedies  are  to  be  governed  by  the 
law  of  the  place  w^here  an  action  is  brought.  For  purposes  of 
construction  it  is  always  legitimate  to  consider  the  time  when 
and  the  circumstances  under  which  a  contract  was  made,  and 
the  law  under  Avhich  it  was  made  is  one  of  these  circuni- 
■stances.^"  A  policy  made  in  one  state,  to  be  performed 
wholly  or  partially  in  another,  is  prima  facie  to  be  construed 
according  to  the  laws  of  the  former  ;3^  but  where  the  con- 
tracting parties  belong  to  different  states  and  it  does  not 
appear  where  it  was  made,  or  delivered,  or  payable,  or  where 
the  premium  Avas  paid,  the  locus  may  be  inferred  to  have 
been  in  either  state.*^- 

The  place  of  the  making  of  a  contract  of  insurance  is  the 
place  where  the  final  act  is  performed  Avhich  is  necessary 
to  establish  the  relation  of  insurer  and  insured.  Thus  where 
an  application  is  forwarded  from  Chicago  to  New  York,  and 
a  policy  returned  containing  a  condition  that  it  will  not  be 
binding  until  countersigned  by  an  agent  and  until  the  advance 
premium  is  paid  to  the  agent  in  Chicago,  the  contract  is  not 
complete  until  these  conditions  are  complied  with,  and  Chicago 
is  the  place  of  the  contract  ;^^  and  Avhere  the  policy  does  not 

'"Mullen  V.  Reed,  64  Conn.  240,  24  L.  R.  A.  664;  London  Assur. 
V.  Companhia  De  Moagens  Do  Barreiro,  167  U.  S.  149,  17  Sup.  Ct. 
789;  Union  Cent.  Life  Ins.  Co.  v.  Pollard,  94  Va.  146,  36  L.  R.  A. 
271;  State  Mut.  Fire  Ins.  Ass'n  v.  Brinkley  Stave  &  Heading  Co., 
61  Ark.  1,  29  L.  R.  A.  712;  Voorheis  v.  Peoples'  Mut.  Ben.  Soc,  91 
Mich.  469.  51  N.  W.  1109. 

"'  Seamans  v.  Knapp-Stout  &  Co.  Company,  89  Wis.  177,  27  L.  R. 
A.  362. 

•"  Pennypacker  v.  Capital  Ins.  Co.,  80  Iowa,  56,  8  L.  R.  A.  236. 

''Pomeroy  v.  Manhattan  Life  Ins.  Co..  40  111.  398;  Mutual  Life 
Ins.  Co.  V.  Hill  (C.  C.  A.),  97  Fed.  263;  Giddings  v.  Northwestern 
Mut.  Life  Ins.  Co..  102  U.  S.  108. 


138  THE  CONTKACT  —  INTERPRETATION.  §  08^ 

tecome  effectual  until  delivery,  it  must  be  construed  accord- 
ing to  the  law  of  the  place  of  deliyery.^^  A  constructive 
delivery,  or  mailing  the  policy  to  the  insured,  or  delivery  to 
one  authorized  to  receive  the  policy  for  him,  is  often  sufficient,, 
and  the  place  of  completion  is  in  such  case  the  place  where 
the  insurer  has  done  some  act  intended  to  signify  that  the 
instrument  shall  have  immediate  vitality,  or  has  put  the  policy 
beyond  its  control.^''  Interest  should  be  computed  according 
to  the  law  of  the  state  where  the  policy  is  payable.^®  An  as- 
signment of  a  policy  is  subject  to  the  law  of  the  domicil  of  the 
assignor  and  assignee.^^     Policies  issued  upon  applications- 

"Continental  Life  Ins.  Co.  v.  Webb,  54  Ala.  688;  Heebner  v. 
Eagle  Ins.  Co.,  10  Gray  (Mass.),  131;  In  re  Insurance  Co.  of  Penn- 
sylvania, 22  Fed.  109;  In  re  Breitung,  78  Wis.  33,  46  N.  W.  891,  47 
N.  W.  17;  Cromwell  v.  Royal  Canadian  Ins.  Co.,  49  Md.  366.  Com- 
pare Bailey  v.  Hope  Ins.  Co.,  56  Me.  474. 

Policies  issued  by  foreign  companies,  doing  business  in  Massa- 
chusetts by  virtue  of  its  laws,  to  citizens  thereof,  are  governed  by 
the  laws  of  the  states  in  which  the  companies  have  their  domicile, 
when  the  policies  were  executed  there  and  the  conditions  thereof 
were  to  be  performed  there  by  the  companies.  In  such  cases  the 
nonforfeiture  law  of  Massachusetts  does  not  apply.  Smith  v.  Mut- 
ual Life  Ins.  Co.,  5  Fed.  582;  Desmazes  v.  Mutual  Ben.  Life  Ins^ 
Co.,  7  Ins.  Law  J.  926;  Shattuck  v.  Mutual  Life  Ins.  Co.,  7  Ins.  Law 
J.  937;  Whitcomb  v.  Phoenix  Mut.  Life  Ins.  Co.,  8  Ins.  Law  J.  624, 
Contra,.  Morris  v.  Penn  Mut.  Life  Ins.  Co.,  120  Mass.  503;  Holmes  v. 
Chdirter  Oak  Life  Ins.  Co.,  131  Mass.  64.  See,  also,  Equitable  Life 
Assur.  Soc.  V.  Clements,  140  U.  S.  226;  Provident  Sav.  Life  Assur. 
Soc.  V.  Hadley  (C.  C.  A.),  102  Fed.  856.  Compare  Cravens  v.  New- 
York  Life  Ins.  Co.,  148  Mo.  583,  53  L.  R.  A.  305. 

*^Ante,  §  47,  "Delivery  of  Policy;"  Seamans  v.  Knapp-Stout  & 
Co.  Company,  89  Wis.  177,  27  L.  R.  A.  362;  Northampton  Mut.  L. 
S.  Ins.  Co.  V.  Tuttle,  40  N.  J.  Law,  476;  Marden  v.  Hotel  Owners' 
Ins.  Co..  85  Iowa,  584,  52  N.  W.  509. 

,  ^"Grangers'  Life  Ins.  Co.  v.  Brown,  57  Miss.  308;  Merchants'  &. 
M.  Ins.  Co.  V.  Linchey,  3  Mo.  App.  588. 

=' Connecticut  Mut.  Life  Ins.  Co.  v.  Westervelt,  52  Conn.  586; 
Lee  v.  Ably.  17  Q.  B.  Div.  309;  Mutual  Life  Ins.  Co.  v.  Allen,  138- 
Mass.  24. 


i 


68  THE  LAW  OF  THE  TLACE. 


139 


forwarded  to  tlie  home  office  of  the  insurer  where  they  are 
passed  upon  and  accepted,  and  whence  the  policies  are  issued, 
are  governed  by  the  law  of  the  state  where  such  office  is,  and 
are  not  affected  by  the  statutes  in  effect  at  the  residence  of  the 
insured  in  another  state.^^  P>ut  in  Wisconsin  it  is  held  that 
the  provisions  of  the  statutes  of  that  state  conclusively  estab- 
lishing the  value  of  insured  real  property  when  wholly  de- 
stroyed to  be  the  amount  of  the  insurance,  applies  to  contracts 
made  out  of  the  state  when  the  property  is  situated  in  that 
state.^® 

A  contract  which  in  terms  provides  for  the  payment  of 
premiums,  and  making  of  proof,  and  for  performance  by  the 
insured,  at  its  home  office  in  New  York,  is  to  be  construed 
as  a  New  York  contract. ^^  The  rights  and  liabilities  of  in- 
surer and  insured  under  a  fire  insurance  policy,  will  be  inter- 
preted  in  connection  with  the  ordinances  of  a  city  wherein 
the  property  covered  ^vas  situated,  when  such  ordinances  were 
in  effect  both  at  the  time  of  issuing  the  policy  and  at  the  time 
of  a  loss -thereunder  and  have  a  direct  bearing  upon  the  terms 
of  the  policy.^^     Decisions  by  courts  of  last  resort  construing 

»» State  Mut.  Fire  Ins.  Co.  v.  Brinkley  S.  &  H.  Co.,  61  Ark.  1,  29  L. 
R.  A.  712.  Compare  Seamans  v.  Knapp-Stout  &  Co.  Company,  89  Wis. 
177,  27  L.  R.  A.  362;  Seiders  v.  Merchants'  Life  Ass'n,  93  Tex.  194, 
54  S.  W.  753;  Seamans  v.  Temple  Co.,  105  Mich.  400,  28  L.  R.  A. 
430. 

='  Seyk  V.  Millers'  Nat.  Ins.  Co.,  74  Wis.  67.  3  L.  R.  A.  523. 

^"Mutual  Life  Ins:  Co.  v.  Dingley,  40  C.  C.  A.  459,  100  Fed.  408, 
49  L.  R.  A.  133;  Mutual  Life  Ins.  Co,  v.  Hill,  38  C.  C.  A.  159,  97  Fed. 
263,  49  L.  R.  A.  127;  Seiders  v.  Merchants'  Life  Ass'n,  93  Tex, 
194,  54  S.  W.  753;  Germania  Life  Ins.  Co.  v.  Feetz  (Tex.  Civ.  App.). 
47  S.  W.  687. 

"Larkin  v.  Glens  Falls  Ins.  Co.,  80  Minn.  527,  83  N.  W.  410; 
Hamburg-Bremen  Fire  Ins.  Co.  v.  Garlington,  66  Tex.  103;  Brady 
V.  Northwestern  Ins.  Co.,  11  Mich.  445;  Fire  Association  v.  Rosen- 
thal, 108  Pa.  St.  474;  Monteleone  v.  Royal  Ins.  Co.,  47  La.  Ann.  1563. 


140  THE  CONTRACT  —  INTERPRETATION.  §  09 

a  policy  against  tlie  contention  of  tlie  insurer,  create  a  douLt 
as  to  its  interpretation  of  sufficient  gravity  to  be  resolved  in 
favor  of  tlie  insured,  if  the  insurer  continues  to  issue  the  same 
form  of  policy.  ^^ 

It  is  in  accord  T\ith  the  weight  of  authority  and  with  prin- 
ciple that  where  the  parties  to  a  contract  live  in  different 
states,  or  if  living  in  one  state  they  make  a  contract  to  be 
performed  in  another,  they  may,  acting  in  good  faith,  and 
without  intent  to  evade  the  law,  agree  that  the  law  of  either 
state  shall  control  in  the  interpretation  and  validity  of  the 
■contract.  A  stipulation  in  an  application  that  a  policy  issued 
thereon  shall  be  construed  by  the  law  of  the  domicil  of  the 
insurer  is  valid  and  effectual ;  ^^  and  so  if  the  stipulation  is  in 
the  policy. ^^  But  such  stipulations  cannot  overcome  the 
effect  of  statutes  in  force  at  the  place  where  the  contract  is 
actually  made.^^ 

Custom  and  Usage. 

g  69.  The  parties  to  a  contract  of  insurance  will  be  presumed 
to  have  contracted  with  reference  to  known  usages  and  cus- 
toms which  enter  into  and  govern  the  business  or  subject 
matter  to  which  it  relates.^^ 

*=  Fidelity  &  Casualty  Co.  v.  Lowenstein  (C.  C.  A.),  97  Fed.  17,  46 
L.  R.  A.  450. 

«  Johnson  v.  New  York  Life  Ins.  Co.,  109  Iowa,  708,  78  N.  W.  905; 
Mutual  Life  Ins.  Co.  v.  Dingley  (C.  C.  A.),  100  Fed.  408,  49  L.  R.  A. 
133. 

"Union  Cent.  Life  Ins.  Co.  v.  Pollard,  94  Va.  146,  36  L.  R.  A.  271; 
Wayman   v.   Douthard,   10  Wheat.    (U.   S.)    1;    Liverpool   &   G.  W. 
Steam  Co.  v.  Phenix  Ins.  Co..  129  U.  S.  397;   Voorheis  v.  People's 
Mut.  Ben.  Soc,  91  Mich.  469.  51  N.  W.  1109. 
,    '^New  York  Life  Ins.  Co.  v.  Russell  (C.  C.  A.),  77  Fed.  95. 

*■  McGregor  v.  Insurance  Co.  of  Pennsylvania,  1  Wash.  C.  C.  39, 
Fed.  Cas.  No.  8,811;  Arnould,  Ins.  65;  Hicks  v.  British  America 
Assur.  Co.,  162  N.  Y.  284,  48  L.  R.  A.  424;  Home  Ins.  Co.  v.  Adler, 
71  Ala.  516,  77  Ala.  242;  Boright  v.  Springfield  F.  &  M.  Ins.  Co.,  34 
Minn.  353;  Holbrook  v.  St.  Paul  F.  &  M.  Ins.  Co.,  25  Minn.  229;  Hey 


§  70  STANDARD    POLICIES. 


141 


A  custom  or  usage,  to  be  valid  and  binding,  must  be  general, 
well  established,  reasonable,  and  not  subversive  of  general 
principles  of  law.*' 

Usage  and  custom  are  admissible  to  explain  what  is  doubt- 
ful, but  never  to  contradict  what  is  plain.^s 

STAifDAED  Policies. 

§  70.  A  standard  policy,  whose  form  is  prescribed  by  the 
legislature  of  a  state,  and  whose  use  by  insurance  companies 
doing  business  within  that  state  is  made  compulsory,  should, 
so  far  as  concerns  the  interpretation  of  the  body  of  the  policy 
whose  wording  follows  the  statute,  be  construed  as  a  statutory 
enactment,  and  not  as  a  contract  prepared  by  the  insurer. 

We  liave  already  seen  that  ambiguous  words  or  phrases 
found  in  ordinary  insurance  policies,  -which  are  the  voluntary 
contracts  of  the  insured  and  insurer,  are  construed  most 
strongly  against  the  latter  in  accordance  with  the  rule  "verba 
fortius  accifiuntur  contra  'proferentem."  This  ancient  rule 
is  based  upon  reason  and  was  framed  for  the  purposes  of 
justice,  and  should  not  be  asserted  or  construed  so  as  to  defeat 
the  very  ends  it  was  intended  to  accomplish.     Keason  is  the 

V.  Guarantors'  Liability  Ind.  Co.,  181  Pa.  St.  220;  Jones  v.  German 
Ins.  Co.,  110  Iowa,  75,  81  N.  W.  188,  46  L.  R.  A.  860;  Home  Ins.  Co. 
V.  Favorite,  46  111.  263;  Mason  v.  Franklin  Fire  Ins.  Co.,  12  Gill 
(Md.),  468;  Edie  v.  East  India  Co.,  2  Burrows,  1226;  Hazard's 
Adm'r  v.  The  New  England  Marine  Ins.  Co.,  8  Pet.  (U.  S.)  582; 
Rogers  v.  Mechanics'  Ins.  Co.,  1  Story,  607,  Fed.  Cas.  No.  12,016; 
Union  Cent.  Life  Ins.  Co.  v.  Pottker,  33  Ohio  St.  459;  Helme  v. 
Philadelphia  Life  Ins.  Co.,  61  Pa.  St.  107;  Baxter  v.  Massasoit  Ins. 
Co.,  13  Allen  (Mass.),  320. 

"Merchants'  Ins.  Co.  v.  Prince,  50  Minn.  53;  Bryant  v.  Com- 
monwealth Ins.  Co.,  6  Pick.  (Mass.)  131;  Macy  v.  Whaling  Ins.  Co., 
9  Mete.  (Mass.)  363;  Cobb  v.  New  England  Mut.  Marine  Ins.  Co., 
6  Gray  (Mass.),  192;  Livingston  v.  Maryland  Ins.  Co.,  7  Cranch 
(U.  S.).  506. 

"Grace  v.  American  Cent.  Ins.  Co.,  109  U.  S.  278;  Hone  v.  Mutual 
Safety  Ins.  Co.,  1  Sandf.  (N.  Y.)  149;  Manson  v.  Grand  Lodge, 
A.  0.  U.  W.,  30  Minn.  509. 


142  THE  CONTRACT INTERPRETATION.  §  70 

soul  of  the  rule,  and  wlien  tlie  reason  of  any  particular  rule 
ceases,  so  does  the  rule  itself.  "Cessante  ratione  legis  cessat 
ipsa  lex."  So  when  the  law  of  the  place  where  the  contract 
is  made  prohibits  the  parties  to  an  insurance  policy  from 
agreeing  upon  their  own  terms,  and  prohibits  the  insurer  from 
preparing  its  own  policy,  and  prescribes  the  very  words  and 
form  of  the  only  policy  which  can  be  legally  executed,  a  policy 
which  is  issued  in  conformity  to  the  law  is,  in  so  far  as  it 
follows  the  prescribed  form,  prepared  not  by  the  insurer,  but 
by  the  legislature,  which  alone  is  responsible  for  uncertainties 
and  ambiguities  of  the  language  in  which  it  has  expressed 
itself ;  and  the  reason  for  the  rule  '^contra  'proferentem"  does 
not  exist,  and  the  act  of  the  legislature  should  be  interpreted 
and  construed  as  any  other  statute  in  derogation  of  common 
right  and  not  as  a  contract  prepared  by  the  insurer.  "^^^  There 
is  no  more  justice,  nor  logic,  nor  reason  in  favor  of  a  contrary 
doctrine  than  there  would  be  in  an  assertion  that  a  penal  stat- 
ute ought  to  be  construed  most  strongly  against  a  criminal  and 
in  favor  of  the  prosecution,  because  such  statute  was  enacted 
to  protect  the  public  and  to  suppress  and  punish  crime.  In  a 
New  York  case  ^^  it  was  said  that  a  standard  policy  should 
be  construed  most  favorably  to  the  insured,  but  the  question 
under  consideration  was  the  effect  to  be  given  to  the  words 
"the  insured,"  and  it  is  doubtful  if  it  was  intended  to  hold 
more  than  was  decisive  of  the  case,  viz. :  that  the  language 
was  intended  to  have  a  reasonable  and  not  unreasonable  mean- 
ing. In  a  later  case  the  same  court  construes  the  act  pro- 
viding for  a  standard  form  of  policy  as  itself  making  the 
contract  of  insurance,  saying,  "upon  the'  passage  of  this  im- 

«»  Rottier  v.  German  Ins.  Co.,  86  N.  W.  889  (Minn,). 
*«  Matthews  y.  American  Cent.  Ins.  Co.,  154  N.  Y.  449,  39  L.  R.  A. 
433. 


§  71  POLICIES    OF    MUTUAL    ORGANIZATIONS.  143 

portant  legislation  the  policy  of  insurance  was  no  longer  of 
special  moment,  except  as  evidence  that  a  contract  to  insure 
had  been  made ;  for  it  was  no  longer  competent  for  the  parties 
to  incorporate  into  the  policy  any  provision  whatever,  outside 
of  those  embraced  within  the  terms  of  the  standard  policy." ^*^ 
A  policy  issued  under  and  in  conformity  to  an  unconstitu- 
tional statute  prescribing  a  compulsory  form  of  policy,  will 
be  construed  as  a  voluntary  contract.  Its  provisions  are  sub- 
ject to  the  ordinary  rules  of  waiver,  while  the  provisions 
of  a  valid  standard  policy  can  only  be  waived  in  the  manner 
provided  therein.^  ^ 

Policies  of  Mutual  Organizations. 

§  71.  The  contract  between  a  mutual  aid  or  benefit  insurance 
company  and  one  of  its  members  is,  in  legal  contemplation,  a 
policy  of  insurance,  and  to  be  construed  as  such. 

The  relation  between  a  mutual  insurance  or  benevolent 
organization  and  a  member  to  whom  a  certificate  or  policy 
has  been  issued  is  contractual,  and  the  contract  will  be  con- 
strued under  the  rules  of  construction  applicable  to  other 
insurance  contracts.  Whatever  be  the  terms  of  payment  of 
premium  or  dues  by  the  member,  or  the  mode  of  securing  pay- 
ment of  the  fund  or  benefit,  it  is  still  a  contract  of  insur- 
ance.^^    Of  two  reasonable  constructions,  that  one  will  be 

»"  Hicks  V.  British  America  Assur.  Co.,  162  N.  Y.  284,  48  L.  R. 
A.  424;  Hamilton  v.  Royal  Ins.  Co.,  156  N.  Y.  327,  50  N.  E.  863. 

"  Anderson  v.  Manchester  Fire  Assur.  Co.,  59  Minn.  182,  28  L.  R. 
A.  609;  Straker  v.  Phenix  Ins.  Co.,  101  Wis.  413,  77  N.  W.  753: 
Dowling  V.  Lancashire  Ins.  Co.,  92  Wis.  63,  31  L.  R.  A.  112;  O'Neil 
V.  American  Fire  Ins.  Co.,  166  Pa.  St.  72,  26  L.  R.  A.  715;  Hicks  v. 
British  America  Assur.  Co..  162  N,  Y.  284,  48  L.  R.  A.  424.  Sea, 
also.  Union  Cent.  Life  Ins.  Co.  v.  Pollard,  94  Va.  146,  36  L.  R.  A. 
271;  Queen  Ins.  Co.  v.  Leslie.  47  Ohio  St.  409,  9  L.  R.  A.  45. 

"Cluff  \.  Mutual  Ben.  Life  Ins.  Co.,  99  Mass.  317;  Elkhart  Mut. 
Aid  B.  &  R.  Ass'n  v.  Houghton,  103  Ind.  286;   State  v.  Bankers'  & 


144:  THE  COXTKACT INTERPRETATION.  §  71 

adopted  whicli  "will  best  effectuate  the  objects  of  the  association 
and  sustain  the  claims  of  the  members.^^  Certificates  are 
sometimes  construed  as  if  a  will  or  testament.  Vested,  rather 
than  contingent  rights  are  favored ;  the  first,  rather  than  the 
second  taker.^^  Where  the  certificate  of  membership  of  a 
mutual  benefit  society  is  authorized  bj  its  charter,  but  is 
inconsistent  with  the  by-laws,  the  former  controls  ;^^  but 
neither  the  customs,  nor  opinion  of  the  officers  as  to  the 
meaning  of  express  words  in  the  contract,  can  affect  the  rights 
of  a  member.^® 

Merchants'  Mut.  Ben.  Ass'n,  23  Kan.  499;  Folmer's  Appeal,  87  Pa. 
St.  133;  Illinois  Masons'  Benev.  Soc.  v.  Baldwin,  86  111.  479;  Com. 
V.  Wetherbee,  105  Mass.  149;  Holland  v.  Supreme  Council,  O.  C.  F., 
54  N.  J.  Law,  490;  Goodman  v.  Jedidjah  Lodge  No.  7,  67  Md.  117. 

"^  Maynard  v.  Locomotive  Engineers'  Mut.  L.  &  A.  Ins.  Ass'n,  16 
Utah,  145;  Ballou  v.  Gile,  50  Wis.  614;  Elsey  v.  Odd  Fellows'  Mut. 
Relief  Ass'n.  142  Mass.  224. 

"Chartrand  v.  Brace,  16  Colo.  19,  12  L.  R.  A.  213;  Bolton  v.  Bol- 
ton, 73  Me.  299;  Union  Mut.  Ass'n  v.  Montgomery,  70  Mich.  587. 

^'  McCoy  v.  Northwestern  Mut.  Relief  Ass'n,  92  Wis.  577,  66  N.  W. 
697;  Davidson  v.  Old  People's  Mut.  Ben.  Soc,  39  Minn.  303;  Union 
Mut.  Fire  Ins.  Co.  v.  Keyser,  32  N.  H.  313;  Failey  v.  Fee,  83  Md. 
83,  32  L.  R.  A.  311. 

^"Manson  v.  Grand  Lodge,  A.  0.  U.  W.,  30  Minn.  509;  V/iggins  v. 
Knights  of  Pythias,  31  Fed.  122;  District  Grand  Lodge  No.  4  v. 
Cohn,  20  111.  App.  335;  Davidson  v.  Supreme  Lodge,  K.  of  P.,  22 
Mo.  App.  263. 


CHAPTER  VII. 

THE  CONTRACT  (Cow^inwecZ)— REFORMATION,  MODIFICATION, 
AND  RESCISSION. 

§  72.  Reformation  of  Policy. 

73.  Modification  of  Contract. 

74.  Disaffirmance  or  Rescission. 


Reformation"  of  Policy. 

§  72.  Where,  through  the  mutual  mistake  of  the  parties,  or 
the  mistake  of  one  party  and  the  intentional  fraud  of  the  other, 
a  contract  of  insurance  has  been  made  which  does  not  express 
the  real  intention  and  agreement  of  the  parties  thereto,  a  court 
of  equity  will,  upon  a  proper  showing,  reform  the  contract  so 
as  to  make  it  express  that  intention  and  agreement. 

In  such  matters  the  courts  act  with  great  caution,  and  will 
grant  a  prayer  for  reformation  only  upon  clear  and  convincing 
proof  that  the  contract  ought  to  be  reformed. 

It  sometimes  happens  that  through  the  mutual  mistake  of 
the  insurer  and  the  insured,  a  policy  of  insurance  secures  to 
the  iiisured  benefits,  protection,  or  indemnity,  which  the  in- 
surer did  not  intend  to  furnish  and  which  the  insured  did 
not  intend  to  obtain.  That  a  court  of  equity  has  power  to 
correct  this  mutual  mistake,  make  the  instrument  given  in 
execution  and  fulfilhnent  of  the  preliminary  negotiations  con- 
form to  the  real  intention  of  the  parties  as  established  by 
clear  and  convincing  proof,  and  hold  the  parties  to  their 
actual  agreement,  cannot  be  doubted.  And  this  power  is  not 
strictly  limited  to  cases  of  mistake  of  fact,  but  extends  also 
to  mistakes  of  law.  While,  if  nothing  more  than  the  bare 
mistake  be  sho-\vn  as  a  reason  for  relief,  it  will  rarely,  if  ever, 
be  granted,  yet  equity  will  interfere  where  it  further  appears 
KERR,  INS.— 10 


146  THE   CONTKACT  —  EEFORMATION,  ETC.  §  72 

that  the  one  party,  availing  himself  of  the  opportunities  af- 
forded bj  the  mistake,  will  enforce  an  unconscionable  ad- 
vantage "without  consideration,  he  being  in  no  position 
entitling  him  to  equitable  protection,  and  the  other  party  not 
being  blamable.  But  this  jurisdiction  will  be  exercised  with 
caution,  and  only  very  clear  and  convincing  proofs  will  be 
sufficient  to  overcome  the  presumption  that  the  written  instru- 
ment which  the  parties  have  executed  for  the  purpose  of 
evidencing  and  carrying  into  effect  their  agreement  is  in  legal 
effect  or  in  terms  contrary  to  their  intention.  A  suit  to  ob- 
tain such  relief  may  be  maintained  either  before  or  after  a 
loss.  Oral  evidence  is  admissible  to  show  the  true  agreement.^ 
If  reformation  be  sought  solely  upon  the  ground  of  mis- 
take of  fact,  it  must  appear  that  the  mistake  was  mutual  and 
common  to  both  parties.  A  court  cannot  create  for  the  parties 
a  contract  which  they  did  not  both  intend  to  make.  A  mis- 
take on  one  side  may  be  ground  for  rescinding,  but  not  for 
reforming,  a  contract.^  But  evidence  that  a  written  agree- 
ment was  made  through  the  honest  mistake  of  one  party  and 

^Snell  V.  Atlantic  F.  &  M.  Ins.  Co.,  98  U,  S.  85;  Hearne  v.  New 
England  Mut.  Marine  Ins.  Co.,  20  Wall.  (U.  S.)  488;  Coles  v.  Bowne, 
10  Paige  (N.  Y.),  526;  Palmer  v.  Hartford  Fire  Ins.  Co.,  54  Conn. 
488;  Henderson  v.  Travelers'  Ins.  Co.,  65  Fed.  438;  German  Fire  Ins. 
Co.  V.  Gueck,  130  111.  345,  6  L.  R,  A.  835;  Globe  Ins.  Co.  v.  Boyle. 
21  Ohio  St.  119;  Mead  v,  Westchester  Fire  Ins.  Co.,  64  N.  Y.  453; 
Kleis  V.  Niagara  Fire  Ins.  Co.,  117  Mich.  469,  76  N.  W.  155;  Bryce 
V.  Lorillard  Fire  Ins.  Co.,  55  N.  Y.  240;  Slobodisky  v.  Phenix  Ins. 
Co.,  52  Neb.  395,  72  N.  W.  483;  Spurr  v.  Home  Ins.  Co.,  40  Minn. 
424;  Fitchner-v.  Fidelity  Mut.  Fire  Ass'n,  68  N.  W.  710;  Id.,  103 
Iowa,  276,  72  N.  W.  530;  Maher  v.  Hibernia  Ins.  Co.,  67  N.  Y.  283; 
Bailey  v.  American  Cent.  Ins.  Co.,  4  McCrary,  221,  13  Fed.  250. 

"Moeller  v.  America  Fire  Ins.  Co..  52  Minn.  337;  Hearne  v.  New 
England  Mut.  Marine  Ins.  Co.,  20  Wall.  (U.  S.)  488;  Baldwin  v. 
State  Ins.  Co.,  60  Iowa,  497;  McCormick  v.  Orient  Ins.  Co.,  86  Cal. 
260;  Durham  v.  Fire  &  Marine  Ins.  Co.,  22  Fed.  468,  10  Sawy.  526. 


§  72  EEFOKMATION    OF    POLICY.  147 

fraud  or  concealment  of  the  otlier,  is  sufficient  to  entitle  the 
former  to  a  reformation.^  Upon  the  principle  that  he  who 
seeks  equitable  relief  must  come  into  court  with  clean  hands, 
a  suitor  cannot  have  a  policy  reformed  so  as  to  relieve  him 
from  the  consequences  of  his  own  fraudulent  or  dishonest  act. 
An  insurance  company  can,  with  the  consent  of  the  insured, 
after  the  happening  of  the  contingency  insured  against,  sub- 
stitute a  new  policy  in  the  place  of,  and  for  the  purpose  of 
correcting,  one  previously  issued,  thus  making  itself  liable 
under  the  last  instead  of  the  first  policy.*  These  rules  apply 
also  to  renewals.^  A  misdescription  of  the  subject  matter,^ 
or  the  insured,''^  may  be  corrected.  The  failure  of  an  in- 
sured to  read  his  policy  when  it  was  delivered  to  him  is  not 
such  negligence  as  defeats  his  right  to  a  reformation.^  An 
insured  cannot  ignore  his  policy  which  does  not  correctly 
embody  the  agreement  and  sue  upon  the  oral  contract;  he 
must  seek  his  remedy  by  an  equitable  action  to  rescind  or 

"Palmer  v.  Hartford  Fire  Ins.  Co.,  54  Conn.  488;  Fitchner  v.  Fi- 
delity Mut.  Fire  Ass'n,  103  Iowa,  276,  72  N.  W.  530;  Devereaux  v. 
Sun  Fire  Office  of  London,  51  Hun  (N.  Y.),  147;  Cushman  v.  New 
England  Fire  Ins.  Co.,  65  Vt.  569;  Doniol  v.  Commercial  Fire  Ins. 
Co.,  34  N.  J.  Eq.  30. 

*Ford  V.  United  States  Mut.  Ace.  Relief  Co.,  148  Mass.  153,  1  L. 
R.  A.  700;  post,  note  21. 

"Palmer  v.  Hartford  Fire  Ins.  Co.,  54  Conn.  488;  Phoenix  Fire 
Ins.  Co.  V.  Hoffheimer,  46  Miss.  645;  Van  Tuyl  v.  Westchester  Fire 
Ins.  Co..  55  N.  Y.  657. 

"German  Fire  Ins.  Co.  v.  Gueck,  130  111.  345;  Bryce  v,  Lorillard 
Fire  Ins.  Co.,  55  N.  Y.  240. 

'Globe  Ins.  Co.  v.  Boyle,  21  Ohio  St.  119;  Keith  v.  Globe  Ins.  Co., 
62  111.  518. 

"Fitchner  v.  Fidelity  Mut.  Fire  Ass'n,  103  Iowa,  276,  72  N.  W. 
530;  La  Marche  v.  New  York  Life  Ins.  Co.,  126  Cal.  498,  58  Pac. 
1053;  ante,  note  5.  Compare  Reynolds  v.  Atlas  Ace.  Ins.  Co.,  69 
Minn.  93. 


148  THE  CONTRACT EEFORMATION,  ETC.         §  72 

reform  tlie  policy  upon  the  ground  of  fraud  or  mistake.*^ 
But  where  a  policy  is  issued  under  circumstances  which, 
constitute  a  waiver  of  its  conditions,  recovery  may  be  had 
mthout  having  the  policy  reformed  so  as  to  express  the  con- 
sent of  the  insurer  to  the  violations  of  its  terms  ;^°  and  so- 
frequently  the  doctrine  of  waiver  and  estoppel  is  invoked,  and 
proof  of  mistake  is  pei-mitted  and  a  suitor  allowed  to  recover 
directly  in  an  action  at  law.^^  But  proof  of  mistake  or  misde- 
scription should  be  received  with  great  caution  in  actions  at 
law,  and  only  when  the  variance  is  immaterial  or  where  the 
real  contract  of  the  parties  is  apparent.  Then  parol  evidence 
is  sometimes  admissible,  not  to  vary  the  written  contract,  but 
simply  to  identify  its  subject  matter,  or"  the  parties,  or  some 
person  or  thing  described  or  referred  to.^^ 

A  court  of  equity  may  in  a  single  action,  upon  proper 
proof,  reform  a  policy  and  enforce  it  as  reformed. ^^  A  party 
may  not  have  a  policy  reformed  after  he  has  sued  upon  it  and 
failed  to  recover, ^^  but  the  mere  commencement  of  a  suit 
which  is  dismissed  without  a  determination  upon  the  merits 

» Kleis  V.  Niagara  Fire  Ins.  Co.,  117  Mich.  469,  76  N.  W.  155. 

^o  Hobkirli  v.  Phoenix  Ins.  Co.,  102  Wis.  113,  78  N.  W.  160. 

"Omaha  Fire  Ins.  Co.  v.  Dufek.  44  Neb.  241,  62  N.  W.  465;  Ameri- 
can Cent.  Ins.  Co.  v.  McLanathan,  11  Kan.  533;  Amazon  Ins.  Co.  v. 
Wall,  31  Ohio  St.  628;  Manhattan  Ins.  Co.  v.  Webster,  59  Pa.  St. 
227;  Germania  Life  Ins.  Co.  v.  Lunkenheimer,  127  Ind.  536;  Lum- 
bermen's Mut.  Ins.  Co.  V.  Bell,  166  111.  400,  45  N.  B.  130;  Wilson  v. 
Conway  Fire  Ins.  Co.,  4  R.  I.  141;  Gerrish  v.  German  Ins.  Co.,  55 
N.  H.  355;  Kansas  Farmers'  Fire  Ins.  Co.  v.  Saindon,  52  Kan.  486, 
53  Kan.  623. 

"Greenleaf,  Evidence,  §  300  et  seq.;  Phenix  Ins.  Co.  v.  Gebhart, 
32  Neb.  144.  Compare  Kleis  v.  Niagara  Fire  Ins.  Co.,  117  Mich. 
469,  76  N.  W.  155. 

"  Spurr  V.  Home  Ins.  Co.,  40  Minn.  424,  §§  32,  33. 

"Washburn  v.  Great  Western  Ins.  Co.,  114  Mass.  175;  Steinback 
v.  Relief  Fire  Ins.  Co..  77  N.  Y.  498. 


§  72  REFORMATION    OF    TOLICT.  Ii9 

is  no  bar  to  a  subsequent  action  for  reformation.^^  A  suit 
for  reformation  can  only  be  maintained  by  the  real  party  in 
interest  and  the  plaintiff  must  be  a  party  or  privy  to  the  con- 
tracts^ 

Courts  will  enforce  the  contracts  of  parties,  but  cannot  make 
contracts  for  them.  A  policy  will  only  be  reformed  upon 
clear  and  convincing  evidence  that  the  insurer  agreed  to  in- 
sure the  insured  in  respect  to  some  particular  subject  matter 
upon  terms  mutually  understood,  and  that  the  policy  does  not 
contain  the  agreement  made  by  the  parties.  There  must  be 
proof  of  mutual  agreement  on  the  terms  of  the  contract,  and 
proof  of  mutual  mistake,  or  mistake  on  the  part  of  one  and 
fraud,  misrepresentation,  or  concealment  on  the  part  of  the 
other  party  to  the  contract  in  order  that  a  decree  reforming 
it  may  be  granted.  ^"^  Eeformation  will  not  be  granted  at  the 
instance  of  one  who  is  guilty  of  laches, ^^  or  fraud  in  pro- 

"  Spurr  V.  Home  Ins.  Co.,  40  Minn.  424. 

"Newman  v.  Home  Ins.  Co.,  20  Minn.  422  (Gil.  378);  Baldwin  v. 
State  Ins.  Co.,  60  Iowa,  497;  Moeller  v.  American  Fire  Ins.  Co.,  52 
Minn.  337,  54  N.  W.  189;  Dean  v.  Equitable  Fire  Ins.  Co.,  4  Cliff. 
575,  Fed.  Cas.  No.  3.705. 

"Travelers'  Ins.  Co.  v.  Henderson,  69  Fed.  762,  16  C.  C.  A.  390; 
St.  Clara  Female  Academy  v.  Delaware  Ins.  Co.,  93  Wis.  57,  66 
N.  W.  1140;  Dougherty  v.  Greenwich  Ins.  Co.  (N.  J.),  33  Atl.  295; 
Schmid  v.  Virginia  F.  &  M.  Ins.  Co.  (Tenn.),  37  S.  W.  1013;  New 
York  Life  Ins.  Co.  v.  McMaster's  Adm'r,  57  U.  S.  App.  638,  87  Fed. 
63;  Westchester  Fire  Ins.  Co.  v.  Wagner  (Tex.),  38  S.  W.  214; 
Hartford  Ins.  Co.  v.  Haas,  87  Ky.  531;  Doniol  v.  Commercial  Fire 
Ins.  Co..  34  N.  J.  Eq.  30;  Mead  v.  Westchester  Fire  Ins.  Co.,  64 
N.  Y.  453;  Aetna  Life  Ins.  Co.  v.  Mason,  14  R.  I.  583;  German  Ameri- 
can Ins.  Co.  v.  Davis,  131  Mass.  316;  Insurance  &  Banking  Co.  v. 
Butler,  55  Md.  233;  Hughes  v.  Mercantile  Mut.  Ins.  Co.,  55  N.  Y. 
265;  Travis  v.  Peabody  Ins.  Co.,  28  W.  Va.  583. 

"St.  Paul  F.  &  M.  Ins.  Co.  v.  Shaver,  76  Iowa,  282,  41  N.  W.  19; 
Bishop  V.  Clay  F.  &  M.  Ins.  Co.,  49  Conn.  167;  Susquehanna  Mut. 
Fire  Ins.  Co.  v.  Swank,  102  Pa.  St.  17;  Reynolds  v.  Atlas  Ace.  Ins. 
Co.,  69  Minn.  92. 


150  THE    CONTKACT KEFOKMATION,  ETC.  §§  73,  74r 

curing  tlie  policy/^  or  when  no  action  is  maintainable  on  tlie 
policy  because  of  lapse  of  time.^'^ 

Modification'  of  uokteact. 

§  73.  In  the  absence  of  statutory  provisions  to  the  contrary, 
a  policy  may  be  modified  or  varied  by  a  subsequent  verbal 
agreement  of  the  parties.  Stipulations  in  a  contract  requiring 
changes  or  waiver  to  be  in  writing  are  not  binding.21 

DiSAFFIBMANCE  OE  RESCISSION". 

§  74.  A  policy  or  renewal  procured  or  issued  through  fraud, 
deceit,  concealment  or  misrepresentation  of  either  party  may 
be  disaflarmed  by  the  party  not  at  fault  ;*2  and  a  policy  which 
does  not  express  an  agreement  of  the  parties  because  their 
minds  did  not  meet  upon  an  essential,  as,  for  instance,  upon 

"Spare  v.  Home  Mut.  Ins.  Co.,  19  Fed.  14;  ante,  notes  3,  4;  Cush- 
man  v.  New  England  Fire  Ins.  Co.,  65  Vt.  569. 

'"Thompson  v.  Phoenix  Ins.  Co.,  25  Fed.  296. 

"Mobile  Life  Ins.  Co.  v.  Pruett,  74  Ala.  487;  Harris  v.  Phoenix 
Ins.  Co..  85  Iowa.  238,  52  N.  W.  128;  Westchester  Fire  Ins.  Co.  v. 
Earle,  33  Mich.  153;  Fireman's  Fund  Ins.  Co.  v.  Norwood,  69  Fed. 
71,  16  C.  C.  A.  136;  London  &  L.  Fire  Ins.  Co.  v.  Storrs,  71  Fed. 
120,  17  C.  C.  A.  645;  Lamberton  v.  Connecticut  Fire  Ins.  Co.,  39 
Minn.  129.  For  substitution  of  policy,  see  Ford  v.  United  States 
Mut.  Ace.  Relief  Co.,  148  Mass.  153,  1  L.  R,  A.  700;  Cheever  v. 
Union  Cent.  Life  Ins.  Co.,  5  Bigelow,  Life  &  Ace.  Rep.  458.  Stand- 
ard policies  may  and  often  do  require  waiver  or  modification  to  be 
done  in  a  particular  manner.  The  method  thus  prescribed  is  ex- 
clusive. Hicks  V.  British  America  Assur.  Co.,  162  N.  Y.  284,  48  L. 
R.  A.  424.  See,  also,  cases  in  note  51,  c.  6,  ante;  Quinlan  v.  Provi- 
dence Wash.  Ins.  Co.,  133  N.  Y.  365;  Mutual  Life  Ins.  Co,  v.  Dingley, 
100  Fed.  408,  49  L.  R.  A.  132. 

"Harris  v.  Equitable  Life  Assur.  Soc,  64  N.  Y.  196;  Godfrey  v. 
New  York  Life  Ins.  Co.,  70  Minn.  224;  Michigan  Mut.  Life  Ins.  Co. 
v.  Reed,  84  Mich.  524;  Trabandt  v.  Connecticut  Mut.  Life  Ins.  Co., 
131  Mass.  167;  Globe  Mut.  Life  Ins.  Co.  v.  Reals,  50  How.  Pr. 
(N.  Y.)  237.  As  to  rescission  for  breach  of  contract,  see  American 
Union  Life  Ins.  Co,  v.  Wood  (Tex.),  57  S.  W.  685. 


§  74:  DISAFFIRMANCE   OR    RESCISSION.  151 

the  subject  matter,  may  be  canceled  or  rescinded.^'  In  this 
connection,  the  ordinary  rules  of  ratification,  waiver  and  es- 
toppel apply. 

"'Hearne  v.  New  England  Mut.  Marine  Ins.  Co.,  20  Wall.  (U.  S.) 
488;  Benson  v.  Markoe,  37  Minn.  37;  Wheeler  v.  Odd  Fellows'  Mut. 
Aid  &  Ace.  Ass'n,  44  Minn.  513;  McKinnon  v.  VoUmar,  75  Wis.  82. 
The  contract  may  be  abandoned  or  rescinded  by  mutual  consent  of 
the  parties.  Mutual  Life  Ins.  Co.  v.  Phinney,  178  U.  S.  327,  20  Sup. 
Ct.  906;  or  by  the  election  of  the  insured  to  have  it  terminated 
when  this  election  is  accepted  by  the  insurer.  Mutual  Life  Ins.  Co. 
V.  Sears,  178  U.  S.  345;  Mutual  Life  Ins.  Co.  v.  Hill,  178  U.  S.  347. 
See,  also,  Hamm  Realty  Co.  v.  New  Hampshire  Fire  Ins.  Co.,  80 
Minn.  139,  83  N.  W.  41.  See,  also.  Cable  v.  United  States  Life  Ins. 
Co.,  Ill  Fed.  19. 


CHAPTER  VIII. 

AGENTS. 

§  75.  In  General. 

76.  Actual  Authority. 

77.  Burden  of  Proof  of  Agency. 

78.  Presumption  of  Fidelity. 

79.  The  Agent  Must  be  Disinterested. 

80.  Destroyed  Property. 

81.  Whom  does  Agent  Represent. 

82.  Statutory  Regulation  of  Agency. 

83.  Evidence  of  Agency. 

84.  Appointment  of  Agents. 

85.  Classification  of  Agents. 

86.  General  Agents. 

87.  Officers  of  Insurer  as  Agents. 

88.  Acts,  Admissions  and  Declarations. 

89.  Subordinate  Lodges  Agents  of  Grand  Lodge. 

90.  Special  or  Local  Agents. 

91.  Brokers  and  Solicitors. 

92.  Stipulations  in  Policy  Regulating  Agency. 

93.  Agents  of  Mutual  Companies. 

94.  Stipulations  in  Application  Regulating  Agency. 

95.  Acts  before  Issuance  of  Policy. 

96.  What  Agents  May  Waive. 

97.  Fraud  and  Mistake  of  Agent. 

98.  Collusion  between  Agent  and  Insured. 

99.  Knowledge  of  Agent  that  Warranties  are  False. 

100.  Powers  of  Agent  after  Policy  is  Issued. 

101.  Known  Limitations  of  Agent's  Power. 

102.  What  Constitutes  Waiver  by  Agent. 

103.  Limitations  Fixed  by  Policy. 

104. Stipulations  that  only  Certain  Officers  can  Waive. 

105.  Stipulations  that  no  Officer  can  Waive. 

106.  Stipulations  that  Waiver  Must  be  in  Writing. 

107.  The  Better  Rule. 

108.  Standard  Policies. 

109.  Collection  of  Premiums  and  Renewals. 


§  75  IN   GENERAL.  153 

110.  stipulations  of  Policy  Against  Giving  Credit. 

111.  Manner  of  Payment  of  Premium. 

112.  Power  of  Agent  to  Waive  Proofs  of  Loss. 

113.  Clerks  and  Sub-agents. 

114.  Delegation  of  Powers.  / 

115.  Proof  of  Authority  of  Sub-agent 

116.  Termination  of  Agency. 

117.  Adjusters. 

118.  Appraisers. 

119.  Ratification  and  Adoption  of  Act  of  Agent. 

120.  Duties  and  Liabilities  of  Agents. 

In  General. 

§  75.  Insurance  companies,  like  other   corporations,  must 
transact  their  business  through  agents. 
Insurance  agents  in  all  their  dealings  and  relations  are  gov- 
erned by  the  general  rules  of  the  law  of  agency;  e.  g., 

(a)  They  bind  their  principal  by  all  acts  performed  within 

the  scope  of  their  real  or  apparent  authority. 

(b)  The  principal  is  not  bound  by  the  acts  of  the  agent  in 

excess  of  his  actual  authority,  except  in  cases  where 
the  doctrine  of  estoppel  can  be  invoked. 

(c)  The  public  is  not  affected  by  secret  limitations  upon  the 

apparent  authority  of  an  agent. 

(d)  The  one  asserting  agency  must  prove  its  existence  and 

extent. 

The  powers  of  agents  are  liberally  construed  in  favor  of  the 
insured. 

An  agent  cannot  act  for  both  insurer  and  insured  in  the  same 
transaction  without  the  consent  of  both. 

An  agent  has  no  power  to  insure  property  after  it  has  been 
destroyed. 

The  Powers  of  the  Agent. 

The  powers  possessed  by  the  agents  of  insurance  companies,' 
like  those  of  agents  of  any  other  corporation,  are  to  he  inter- 
preted in  accordance  with  the  legal  principles  which  govern 
the  general  law  of  agency.  Agents  possess  only  such  powers 
as  have  Leen  conferred  upon  them  verbally,  or  by  an  instru- 
ment of  authorization,  or  such  as  third  persons  have  a  right 


loi  AGENTS.  §  '^5 

to  presume  they  possess.  "Wliere  the  act  or  representation 
of  the  agent  of  an  insurance  company  is  alleged  as  the  act 
of  the  principal — and  therefore  binding  upon  the  latter — the 
test  of  the  liability  is  the  same  as  in  other  cases  of  agency.  If 
a  person  knows  that  an  agent  is  acting  under  circumscribed 
or  limited  authority,  and  that  his  acts  are  outside  of  and 
transcend  the  authority  conferred,  the  principal  is  not  bound ; 
and  it  is  immaterial  whether  the  agent  be  a  general  or  a  special 
one,  because  the  principal  may  limit  the  power  of  one  as  well 
as  the  other.  But  the  principal  is  always  bound  by  the  acts 
of  his  agent  within  the  real  or  apparent  scope  of  his  authority. 
The  existence  and  extent  of  an  agent's  power  or  authority 
to  act  on  behalf  of  or  to  bind  his  principal  in  a  particular 
manner  or  at  all  must  be  determined  as  questions  of  fact.  The 
legal  effect  thereof  when  thus  ascertained  becomes  a  question 
of  law. 

The  powers  of  an  agent  may  be  express,  i.  e.  directly  given 
him  by  his  principal,  orally,  or  in  writing;  or  implied,.!,  e. 
necessary  and  convenient  for  the  execution  of  his  express  au- 
thority; or  apparent,  i.  e.  such  as  he  assumes  to  have  and 
which  he  exercises  with  the  knowledge  of  and  approbation 
of  his  principal.  The  actual  powers  of  an  agent  consist  in  the 
sum  total  of  these  three,  or  so  many  of  them  as  exist  in  a 
given  case. 

A  power  specifically  granted,  carries  with  it  by  implication 
such  other  and  incidental  powers  as  are  directly  and  immedi- 
ately appropriate  to  the  execution  of  the  specific  power 
granted — such  as  are  suitable  and  proper  to  that  end.  Henco 
the  implied  powers  of  the  agent.  The  rule  as  to  apparent 
authority  rests  essentially  on  the  doctrine  of  estoppel.  The 
rule  is  that  where  one  has  reasonably  and  in  good  faith  been 
led  to  believe  from  the  appearance  of  authority  which  another 
permits  his  agent  to  have,  that  the  agent  was  possessed  of 


§  75  IN   GENERAL.  155 

certain  powers,  and  because  of  such  belief  bas  in  good  faith 
dealt  with  such  agent  exercising  those  powers,  the  principal 
will  not  be  allowed  to  deny  the  agency  to  the  prejudice  of  one 
so  dealing.  To  bind  a  principal  for  an  unauthorized  act  of 
his  agent,  on  the  ground  that  a  long  course  of  dealing  and  con- 
duct on  the  part  of  the  agent  created  or  established  apparent 
authority  in  the  agent  to  do  the  act  sought  to  be  enforced, 
it  must  be  shown  that  the  principal  had  notice  of  such  conduct 
and  course  of  dealing,  and  permitted  or  acquiesced  therein, 
or  that  the  course  of  dealing  was  of  such  a  nature  and  char- 
acter as  to  make  it  the  duty  of  the  principal,  as  a  matter  of 
law,  to  know  of  it.  If  the  nature  of  the  business  or  dealings 
of  the  agent  be  of  this  latter  character,  and  the  principal  by 
his  culpable  negligence  permits  it  to  continue,  he  is  estopped 
to  deny  the  authority  of  the  agent.  But  if  it  be  not  of  such 
character,  then,  to  bind  the  principal  on  the  theory  of  ap- 
parent authority,  it  must  be  shown  that  he  knowingly  per- 
mitted or  sanctioned  the  conduct  and  course  of  dealing.  And 
on  the  question  of  the  authority  of  an  agent  the  party  dealing 
with  him  may  prove  the  course  and  manner  of  dealing  between 
the  principal  and  agent  from  which  actual  authority  may  be 
implied,  though  the  party  did  not  know  of  such  course  and 
manner  of  business  at  the  time  he  dealt  with  the  agent.  ^ 

'Knickerbocker  Life  Ins.  Co.  v.  Norton,  96  U.  S.  234;  Union  Mut. 
Ins.  Co.  V.  Wilkinson,  13  Wall.  (U.  S.)  222;  Greenleaf  v.  Moody,  95 
Mass.  363;  Weidert  v.  State  Ins,  Co.,  19  Or.  261,  20  Am.  St.  Rep. 
809,  1  Am.  &  Eng.  Enc.  Law,  965,  989,  999;  Jackson  v.  Mutual  Ben. 
Life  Ins.  Co.,  79  Minn.  44,  82  N.  W.  366;  Columbia  Mill  Co.  v.  Na- 
tional Bank  of  Commerce,  52  Minn.  225;  Quinlan  v.  Providence 
Wash.  Ins.  Co.,  133  N.  Y.  365;  Markey  v.  Mutual  Ben.  Life  Ins.  Co., 
103  Mass.  78;  Keith  v.  Globe  Ins.  Co.,  52  111.  518;  Farmers'  Mut. 
Ins.  Co.  V.  Taylor,  73  Pa.  St.  343;  Ruggles  v.  American  Cent.  Ins. 
Co.,  114  N.  Y.  415;  Farnum  v.  Phoenix  Ins.  Co.,  83  Cal.  246;  Dwel- 
ling House  Ins.  Co.  v.  Dowdall,  159  111.  179. 


156  AGENTS.  §  76 

The  tenaency  of  courts  is  toward  the  liberal  construction 
of  an  agent's  powers.^ 

Actual  Authority. 

§  76.  The  actual  authority  conferred  upon  an  agent  is  pri- 
marily the  limit  of  his  powers. 

Unless  the  act  of  an  agent  which  is  in  excess  or  abuse  of  his 
actual  authority  has  induced  a  third  person,  who  believed, 
and  had  a  right  to  believe,  that  the  act  was  within  the  author- 
ity of  the  agent  and  exercised  in  a  proper  way,  to  act  or  re- 
frain from  acting  in  reliance  thereon,  and  who  would  be 
injured  if  the  act  was  not  considered  that  of  the  principal,  the 
latter  would  not  be  bound.^  A  request  by  an  insurance  com- 
pany of  a  given  person  that  he  shall  collect  a  balance  due  from 
a  former  agent,  or  to  make  up  his  account  from  his  books, 
or  mail  a  canceled  policy,  does  not  give  him  apparent  author- 
ity to  issue  policies  for  the  company.^  An  agent  who  insures 
the  hull  of  a  boat  under  a  short  certificate,  subject  to  the  condi- 
tions of  an  open  policy,  which  is  referred  to,  such  policy  being 
without  a  clause  which  could  cover  such  hull,  being  a  cargo 
policy,  does  not  bind  his  principal,  because  there  is  no  real  or 
apparent  authority  manifest,^  Wliere  an  insurance  company 
gave  its  agent  a  power  of  attorney  constituting  him  its  true 

^  Union  Mut.  Ins.  Co.  v.  Wilkinson,  13  Wall.  (U.  S.)  222;  Aetna 
Ins.  Co.  V.  Maguire,  51  111.  342;  Merchants'  Ins.  Co.  v.  New  Mexico 
Lumber  Co.,  10  Colo.  App.  223,  51  Pac.  174;  Winne  v.  Niagara  Fire 
Ins.  Co..  91  N.  Y.  185;  St.  Paul  F.  &  M.  Ins.  Co.  v.  Parsons,  47  Minn. 
S52;  Union  Mut.  Life  Ins.  Co.  v.  Masten,  3  Fed.  881;  Haughton  v. 
Ewbank,  4  Camp.  88;  Grady  v.  American  Ins.  Co.,  60  Mo.  116. 

^  Walsh  V.  Hartford  Fire  Ins.  Co.,  73  N.  Y.  5;  Reynolds  v.  Con- 
tinental Ins.  Co.,  36  Mich.  131;  Sun  Fire  Office  v.  Wich,  6  Colo. 
App.  103,  39  Pac.  587;  Dryer  v.  Security  Fire  Ins.  Co.,  94  Iowa,  471, 
62  N.  W.  798;  German  Ins.  Co.  v.  Davis,  40  Neb.  700,  59  N.  W.  698. 

*Rahr  v.  Manchester  Fire  Assur.  Co.,  93  Wis.  355,  67  N.  W.  725. 

'  Barry  v.  Boston  Marine  Ins.  Co.,  62  Mich.  424,  29  N.  W.  31. 


76  ACTUAL    AUTHORITY. 


15T 


and  lawful  attorney  to  act  as  its  agent  and  receiver,  and 
effect  insurance,  and  exercise  other  powers  necessary  to  the 
ordinary  working  of  an  insurance  company,  and  such  agent 
made  deposits  with  a  banker,  bought  exchange,  etc.,  the  ac- 
count being  kept  in  the  name  of  the  company,  and  in  the 
course  of  these  transactions  the  agent  became  indebted  to 
plaintiff,  it  was  held  that  the  transactions  were  outside  the 
usual  business  of  the  company  and  it  was  not  liable.*^  In  a 
federal  case  defendant  insured  the  interest  of  a  half  owner 
of  a  vessel,  w^hich  became  stranded  during  a  voyage ;  insured 
requested  insurer  to  render  her  assistance  and  a  Avrecking 
master  was  sent  with  instructions  to  render  necessary  assist- 
ance. Insured  abandoned  his  interest,  and  the  wrecking  master 
with  the  aid  of  the  master  and  the  crew,  and  wdthout  other 
authority  from  the  insurer,  after  removing  the  vessel  to  a 
harbor,  attempted  to  navigate  her  to  her  home  port,  during 
which  attempt  she  was  lost.  Held,  that  the  insurer  was  not 
liable  to  the  OAvner  of  the  uninsured  interest  for  the  loss,  and 
is  not,  as  to  him,  chargeable  with  negligence.'^  An  agent  who 
is  only  authorized  to  solicit  and  take  applications  for  insur- 
ance, receive  the  premiums,  and  deliver  the  policies  which 
have  been  signed  by  the  proper  officers,  has  no  authority, 
either  expressed  or  implied,  to  make  a  binding  contract  of 
insurance,^  or  to  waive  a  breach  of  the  stipulation  in  the 
policy  that  subsequent  additional  insurance  shall  not  be  ef- 
fected on  the  property  without  the  consent  of  the  underwriter.^ 
And  an  oral  permission  by  an  agent  that  premises  may  remain 
vacant  is  not  binding  on  the  insurer,  nor  of  any  benefit  to  the 

"McDonald  v.  Royal  Ins.  Co.,  3  Riiss.  &  G.  (Nova  Scotia)  428. 
■  Kirby  v.  Thames  &  Mersey  Ins.  Co.,  27  Fed.  221. 
-^  Morse  v.  St.  Paul  F.  &  M.  Ins.  Co..  21  Minn.  487. 
■'Alabama  State  Miit.  Assur.  Co.  v.  Long  Clothing  &  S.  Co.  (Ala.), 
2G  So.  655. 


158  AGENTS.  §  "iQ 


insured,  where  lie  liad  express  notice  that  the  company  had 
refused  to  have  such  a  proA^sion  written  in  the  policy. ^"^ 
Nor  can  an  agent  waive  a  provision  of  the  policy  that  "no  in- 
surance would  be  binding  until  actual  payment  of  the  pre- 
miiun"  where  the  policy  states  that  none  of  its  terms  can  be 
waived  by  anyone  except  the  secretary  of  the  company.  ^^  An 
agent  with  power  to  issue  policies,  may  bind  his  principal  by 
an  oral  contract  to  insure ;  ^^  and  by  putting  construction  upon 
doubtful  language  in  the  policy ;  ^^  and  by  the  renewal  of  ex- 

"  Sutherland  v.  Eureka  F.  &  M.  Ins.  Co.,  110  Mich.  668,  68  N.  W. 
985. 

"Wilkins  v.  State  Ins.  Co.,  43  Minn.  177;  post,  note  259. 

"Sanford  v.  Orient  Ins.  Co.,  174  Mass.  416,  54  N.  B.  883;  Stelick 
V.  Milwaukee  Mechanics'  Ins.  Co.,  87  Wis.  322,  58  N.  W.  379;  Ganser 
V.  Fireman's  Fund  Ins.  Co..  38  Minn.  74;  Ruggles  v.  American  Cent. 
Ins.  Co.,  114  N.  Y.  415;  Mathers  v.  Union  Mut.  Ace.  Ass'n,  78  Wis. 
588,  47  N.  W.  1130;  post,  notes  208,  209,  253-255.  But  see  More  v. 
New  York  Bowery  Fire  Ins.  Co.,  130  N.  Y.  537. 

^^Hotchkiss  V.  Phoenix  Ins.  Co.,  76  Wis.  269;  Standard  Life  &  Ace. 
Ins.  Co.  V.  Fraser  (C.  C.  A.),  76  Fed.  705;  Campbell  v.  International 
Life  Assur.  Soc,  4  Bosw.  (N.  Y.)  298;  Phoenix  Ins.  Co.  v.  Wartten- 
berg  (C.  C.  A.),  79  Fed.  245,  26  Ins.  Law  J.  552;  Mathers  v.  Union 
Mut.  Ace.  Ass'n,  78  Wis.  588,  47  N.  W.  1130;  Michigan  Shingle  Co. 
V.  State  Inv.  &  Ins.  Co.,  94  Mich.  389,  53  N.  W.  945;  Michigan 
Shingle  Co.  v.  Pennsylvania  Fire  Ins.  Co..  98  Mich.  609,  57  N.  W. 
802;  Graybill  v.  Penn.  Township  Mut.  Fire  Ins.  Ass'n,  170  Pa.  St. 
75,  50  Am.  St.  Rep.  747;  Steen  v.  Niagara  Fire  Ins.  Co.,  89  N.  Y. 
315;  Dryer  v.  Security  Fire  Ins.  Co.,  94  Iowa,  471,  62  N.  W.  798; 
Winchell  v.  Iowa  State  Ins.  Co.,  103  Iowa,  189,  72  N.  W.  503; 
Kroeger  v.  Pitcairn,  101  Pa.  St.  311.  And  the  representation  of  an 
agent  that  under  a  certain  clause  in  the  policy  the  insured,  by  pay- 
ing the  annual  premium,  would  have  a  period  of  thirteen  months 
during  which  the  policy  could  not  be  forfeited,  puts  a  construction 
on  the  policy  which  binds  the  company.  McMaster  v.  New  York 
Life  Ins.  Co.,  78  Fed.  33.  Otherwise  if  the  application  make  the 
solicitor  the  agent  of  the  insured.  Hubbard  v.  Mutual  Reserve 
Fund  Life  Ass'n.  80  Fed.  681;  New  York  Life  Ins.  Co.  v.  Fletcher, 
117  U.  S.  519. 

Where  the  agent  of  an  insurer  writes  in  the  application  that  the 
applicant  had  no  other  insurance,  although  the  applicant  told  him 


§  76  •       ACTUAL   AUTHORITY.  159 

isting  insurance  ;-^^  and  by  an  nnexecutcd  oral  agreement  to 
renew  ;^^  and  by  any  act,  agreement,  representation  or  waiver 
within  tbe  ordinary  scope  and  limit  of  his  business  which 
is  not  knowTi  by  the  assured  to  be  outside  the  authority  granted 
to  the  agent. -^^ 

The  oral  fraudulent  representations  of  the  insurer's  agent, 
as  to  the  terms  of  the  policy  to  be  issued,  bind  the  insurer 
and  constitute  ground  for  rescission,  although  the  policy  pro- 
vides that  no  statements,  promises,  or  information  made  or 
given  by  the  person  soliciting  or  taking  the  application  for 
a  policy  shall  bind  the  company  or  affect  its  right,  unless 
reduced  to  writing  and  presented  in  the  application  to  the 
officers  of  the  company  at  the  home  office.  ■^'^  An  insurance 
company  is  liable  to  third  persons  in  a  civil  action  for  the 
frauds,  deceits,  concealments,  misrepresentations  and  omis- 
sions of  duty  of  a  general  agent  in  the  course  of  his  employ- 
that  he  had  certificates  of  membership  in  co-operative  companies, 
which  the  agent  said  were  not  considered  insurance  by  him,  the 
company  is  bound  by  the  agent's  interpretation,  and  is  estopped 
from  asserting  to  the  contrary.  Continental  Life  Ins.  Co.  v.  Cham- 
berlain, 132  U.  S.  304,  33  L.  Ed.  341;  post,  note  341.  The  agent  can- 
not bind  his  principal  by  his  expression  of  an  opinion  as  to  the 
law  of  the  contract.  Mutual  Life  Ins.  Co.  v,  Phinney,  178  U.  S.  327- 
343;  Chamberlain  v.  Prudential  Ins,  Co.  (Wis.),  85  N.  W.  128. 

"Carroll  v.  Charter  Oak  Ins.  Co.,  40  Barb.  (N.  Y.)  292;  Baubie  v. 
Aetna  Ins.  Co..  2  Dill.  156.  Fed.  Cas.  No.  1,111. 

"McCabe  v.  Aetna  Ins.  Co.  (N.  D.),  81  N.  W.  426.  Compare  John- 
son V.  Connecticut  Fire  Ins.  Co.,  84  Ky.  470;  O'Reilly  v.  Corporation 
of  London  Assur..  101  N.  Y.  575;  Dinning  v.  Phoenix  Ins.  Co.,  68  111. 
414;  Croghan  v.  New  York  Underwriters'  Agency,  53  Ga.  109;  Taylor 
V.  Phoenix  Ins.  Co..  47  Wis.  365,  2  N.  W.  559;  Kruger  v.  Western  F. 
&  M.  Ins.  Co..  72  Cal.  91;  New  York  Cent.  Ins.  Co.  v.  Watson,  23 
Mich.  486. 

•■'Milwaukee  Mechanics'  Ins.  Co.  v.  Brown  (Kan.),  44  Pac.  35; 
Union  Mut.  Ins.  Co.  v.  Wilkinson,  13  Wall.  (U.  S.)  222;  Continental 
Ins.  Co.  V.  Kasey.  25  Grat.   (Va.)   268. 

"  McCarty  v.  New  York  Life,  Ins.  Co..  74  Minn.  530,  77  N.  W.  426. 


160  AGENTS.  §  76 

ment  ■^'lien  tlie  acts  committed  are  apparently  within  the 
general  scope  of  his  authority  although  not  so  in  fact,  although 
his  conduct  was  not  authorized  or  justified  hy  it;^*  and  is 
bound  by  the  agreement  of  its  agent  to  return  a  note  given 
for  the  premium  if  the  application  is  not  accepted.  ^^ 

"When  the  instructions  of  the  principal  are  equivocal  and 
fairly  susceptible  of  two  different  constructions,  it  is  bound 
by  the  interpretation  acted  on  by  its  agent,^*^  The  principal 
is  bound  by  the  contract  of  employment  for  the  solicitation  of 
risks  made  by  its  general  agent,  unless  the  person  employed 
had  notice  of  private  restrictions  upon  the  agent's  authority. ^^ 
A  demand  upon  an  agent  under  the  provisions  of  a  contract 
is  a  demand  upon  his  principal. ^^  An  appointment  to  act 
as  "agent  or  surveyor"  must  be  taken  in  the  general  sense 
and  as  conferring  all  the  powers  which  the  company  might 
give  its  representative.  The  term  "surveyor"  does  not  limit 
the  word  "agent."  An  agent  so  appointed  may  bind  his  prin- 
cipal by  false  representations  which  it  was  beyond  the  scope 
of  his  power  to  make.^^  It  will  be  presumed  that  the  agent 
of  the  insurer  who  issues  a  policy,  has  authority  to  consent 
to  its  assignment.  ^^ 

When  the  Principal  is  Not  Bound  —  Illustrations. 

The  acts  of  an  agent  do  not  bind  his  principal,  when  as- 
sured is  notified  by  the  application  and  the  policy  that  state- 

"  Atkins  V.  Equitable  Life  Assur.  Soc,  132  Mass.  395;  New  York 
Life  Ins.  Co.  v.  McGowan,  18  Kan.  300. 

^» Mutual  Life  Ins.  Co.  v.  Gorman  (Ky.),  40  S.  W.  571. 

-"  Winne  v.  Niagara  Fire  Ins.  Co.,  91  N.  Y.  185. 

-'  Equitable  Life  Assur.  Co.  v.  Brobst,  18  Neb.  526,  26  N.  W.  204. 
See  post,  "Sub-agents." 

"  Belt  V.  Brooklyn  Life  Ins.  Co.,  12  Mo.  App.  100. 

=' Lycoming  Fire  Ins.  Co.  v.  Woodworth,  83  Pa.  St.  223;  Markey 
V.  Mutual  Ben.  Life  Ins.  Co.,  103  Mass.  78. 

-*  Breckinridge  v.  American  Cent.  Ins.  Co..  87  Mo.  62. 


§  76  ACTUAL    AUTHORITY.  161 

ments  will  not  be  recognized  by  the  company  unless  tbey  are 
in  writing,  and  that  no  stipulation  or  agTeenient  should  be 
in  force  unless  it  is  in  writing,  ^^  An  agent  cannot  revive  a 
canceled  policy  already  rejected  by  his  company  unless  he 
has  authority  covering  the  specific  case.^®  An  insurance 
company  which  repudiates  an  unauthorized  compromise  after 
a  loss  between  its  agent  and  the  insured,  whereby  the  payment 
of  an  additional  premium  by  the  latter  was  to  be  accepted 
by  way  of  a  waiver  of  a  forfeiture  under  a  clause  respecting 
the  condition  of  the  property,  is  not  bound  to  pay  to  the 
insured  an  amount  equal  to  the  additional  premium  paid  by 
him  to  the  agent,  where  it  never  received  such  premium 
from  the  agent  or  held  him  in  any  way  bound  for  it.^^  One, 
who  has  knowledge  that  a  soliciting  agent  has  no  authority  to 
complete  contracts,  cannot  claim  the  benefit  of  a  contract 
against  a  principal  as  the  result  of  negotiating  with  the 
agent.  ^^  If  the  blanks  and  forms  furnished  an  agent  disclose 
the  limitations  on  his  authority  he  cannot  bind  his  principal 
by  acts  done  in  excess  thereof  in  a  transaction  in  which  such 
blanks  and  forms  are  used.^^  It  is  not  within  the  implied 
powers  of  an  agent  to  agree  to  issue  a  life  insurance  policy  to 

"Clevenger  v.  Mutual  Life  Ins.  Co.,  2  Dak.  114;  Hubbard  v.  Mut- 
ual Reserve  Fund  Life  Ass'n,  80  Fed.  681;  New  York  Life  Ins.  Co, 
V.  Fletcher,  117  U.  S.  519;  Hill  v.  London  Assur.  Corp.,  34  N.  Y,  St, 
Rep.  65,  12  N.  Y.  Supp.  86. 

=«  Hartford  Fire  Ins.  Co.  v,  Reynolds,  36  Mich.  502, 

"  Merchants'  Ins.  Co.  v.  New  Mexico  Lumber  Co.,  10  Colo.  App. 
223,  26  Ins.  Law  J.  969.  51  Pac.  174, 

^"Haskin  v.  Agricultural  Fire  Ins,  Co.,  78  Va,  700;  Dryer  v.  Se- 
curity Fire  Ins.  Co.,  94  Iowa,  471.  62  N.  W,  798, 

'"Lee  V.  Guardian  Life  Ins.  Co.,  2  Cent.  Law  J.  495;  Walsh  v, 
Hartford  Fire  Ins.  Co.,  73  N.  Y,  5;  New  York  Life  Ins.  Co.  v. 
Fletcher,  117  U.  S.  519;  Messelback  v.  Norman,  122  N.  Y.  578;  Clev- 
enger V.  Mutual  Life  Ins.  Co.,  2  Dak.  114;  Globe  Mut.  Life  Ins.  Co. 
v.  Wolff,  95  U.  S.  329, 

KERR,  INS.— H 


162  AGENTS.  §  Y6 

a  plijsiclan  vriih.  tlie  agreement  to  take  the  payment  of  the 
premiums  in  professional  services.^*' 

Secret  Restrictions  on  the  Power  of  an  Agent. 

Special  instructions  limiting  the  authority  of  an  agent, 
whose  powers  would  otherwise  be  co-extensive  with  the  busi- 
ness intrusted  to  him,  must  be  communicated  to  the  party 
with  whom  he  deals,  or  the  principal  will  be  bound  to  the  same 
extent  as  though  such  special  instructions  were  not  given.^^ 
It  is  well  settled  that  the  acts  of  an  agent  within  the  apparent 
scope  of  his  authority,  although  in  violation  of  undisclosed 
instructions,  are  binding  on  the  principal  unless  there  was 
something  in  the  nature  of  the  business  or  the  facts  of  the  case 
to  indicate  that  the  agent  is  acting  under  special  instructions 
or  limited  powers,  or  unless  the  acts  were  done  under  such 
circumstances  as  to  put  the  person  dealing  with  the  agent  upon 
notice  or  inquiry  as  to  his  real  authority.^^  If  an  insurer 
expressly  gives  an  agent  powers  outside  of  his  written  au- 
thority, or  encourages  him  to  exercise  them  for  a  long  time  and 

^"Anchor  Life  Ins.  Co.  v.  Pease,  44  How.  Pr.  (N.  Y.)  385.  See, 
also,  as  to  implied  powers  of  agent,  Beebe  v.  Equitable  Mut.  L.  & 
E.  Ass'n,  76  Iowa.  129,  40  N.  W.  122;  Barber  v.  Connecticut  Mut. 
Life  Ins.  Co.,  15  Fed.  312;  Commercial  Assur.  Co.  v.  Rector,  55  Ark. 
630;  Getz  v.  Equitable  Life  Assur.  Soc,  96  Iowa,  138,  64  N.  W.  799; 
Northern  Assur.  Co.  v.  Hamilton,  50  Neb.  248,  69  N.  W.  781;  Mary- 
land Fire  Ins.  Co.  v.  Gusdorf,  43  Md.  506;  Reynolds  v.  Continental 
Ins.  Co.,  36  Mich.  131;  Com.  v.  Mechanics'  Mut.  Fire  Ins.  Co.,  120 
Mass.  495;  Westchester  Fire  Ins.  Co.  v.  Earle,  33  Mich.  143;  Train 
y,  Holland  Purchase  Ins.  Co.,  62  N.  Y.  598;  Guardian  Mut.  Life  Ins. 
Co.  V.  Hogan,  80  111.  35;  United  States  Life  Ins.  Co.  v.  Advance  Co., 
SO  111.  549;  post,  notes  259,  270-275. 

^'Ruggles  v.  American  Cent.  Ins.  Co.,  114  N.  Y.  421;  Southern 
Life  Ins.  Co.  v.  McCain,  96  U.  S.  84;  German  Fire  Ins.  Co.  v.  Co- 
lumbia Fncaustic  Tile  Co.,  15  Ind.  App.  623,  43  N.  E.  41;  Mohr  & 
Mohr  Distilling  Co.  v.  Ohio  Ins.  Co.,  13  Fed.  74. 
.  ^^^  Harnden  v.  Milwaukee  Mechanics'  Ins.  Co.,  164  Mass.  382; 
Union  Mut.  Ins.  Co,  v.  Wilkinson,  13  Wall.  (U.  S.)  222. 


§  T7  BURDEN  OF  PROOF  OF  AGENCY.  163 

ratifies  them  so  as  to  induce  the  public  to  rely  on  his  enlarged 
agency,  it  cannot  afterwards,  without  notice  to  those  who 
knew  of  this  course  of  dealing,  fall  back  on  his  written  au- 
thority to  avoid  acts  done  by  their  encouragement  in  the 
general  scope  of  the  business.  ^^ 

The  fact  that  an  insurance  agent,  having  authority  to  issue 
policies,  has  received  instructions  not  to  insure  a  certain  per- 
son, does  not  invalidate  a  contract  by  the  agent  to  issue  a 
policy  to  him  when  the  latter  had  no  knowledge  of  such  in- 
structions.^^ After  the  death  of  the  insured,  one  who  repre- 
sents himself  to  be,  and  who  was  held  out  to  the  public  as,  a 
general  agent,  told  the  policy  holder  that  he  had  no  doubt  the 
policy  would  be  paid.  Held,  though  between  himself  and  the 
company  he  was  by  private  arrangement  without  authority 
to  adjust  losses,  that  the  evidence  of  what  he  said  and  did 
wliile  actin"*  in  the  capacity  of  general  agent  was  admis- 
sible.^* 

Burden  of  Proof  of  Agency. 

§  77.  The  one  asserting,  must  prove  agency. 

The  burden  is  on  the  party  asserting  agency  in  a  given  per- 
son to  prove  the  existence  of  the  agency  and  the  authority 
claimed  for  the  agent.  And  the  evidence  produced  for  this 
purpose  must  go  further  than  merely  to  be  consistent  with  the 

*'  Farmers'  Mut.  Ins.  Co.  v.  Taylor,  73  Pa.  St.  343. 

'*  Hicks  V.  British  America  Assur,  Co.,  13  App.  Div.  (N.  Y.)  444, 
43  N.  Y.  Supp.  623;  American  Employers'  Liability  Ins.  Co.  v.  Barr 
(C.  C.  A,),  68  Fed.  873;  Hartford  Fire  Ins.  Co.  v.  Farrish,  73  111. 
166;  Krumm  v.  Jefferson  Fire  Ins.  Co.,  40  Ohio  St.  225.  As  to  effect 
of  custom  giving  notice  of  limitations  of  agent's  powers,  see  2  Duer, 
Ins.  (Ed.  1846)  p.  351;  Drake  v.  Marryat,  1  Barn.  &  C.  473;  Arm- 
strong V.  State  Ins.  Co.  61  Iowa,  212;  Winnesheik  Ins.  Co.  v,  Holz- 
grafe,  53  111.  524. 

"Home  Life  Ins.  Co.  v.  Pierce,  75  111.  426.  But  see  American 
Life  Ins.  Co.  v.  Mahone,  21  Wall.  (U.  S.)  152. 


164  AGENTS.  §  '''8 

hypothesis  that  the  agency  existed  with  the  power  asserted. 
This  rule  has  in  some  states  been  regmlated  by  statute.^®  The 
law  makes  it  obligatory  upon  the  party  dealing  with  an  agent 
to  ascertain  the  extent  of  his  authority.  If  he  fails  to  do  so,  it 
is  at  his  own  peril.  One  applying  for  insurance  through  a 
soliciting  agent  is  bound  to  ascertain  the  scope  of  his  authority,. 
and  is  chargeable  with  knowledge  of  limitations  of  the  agent's 
power ;  unless  the  principal  has  clothed  the  agent  with  appar- 
ent power  to  act  in  the  premises.^'^ 

Presumption"  of  Fidelity. 

§  78.  Agents  are  not  presumed  to  disobey  orders. 

In  the  absence  of  clear,  affirmative  evidence  txD  the  contrary,, 
the  agent  is  not  to  be  presumed  to  have  disobeyed  his  instruc- 
tions and  violated  his  obligations  to  his  principal.^^  And  if 
an  agent  acting  within  the  lines  of  his  presumptive  authority 
exceeds  it,  that  is  a  matter  within  the  exclusive  knowledge: 
of  the  insurer,  who  must  prove  it.^^ 

"American  Underwriters'  Ass'n  v.  George,  97  Pa.  St.  238;  Gude 
V.  Exchange  Fire  Ins.  Co.,  53  Minn.  220;  Home  Ins.  &  Banking  Co. 
V.  Lewis,  48  Tex.  622;  Abraham  v.  North  German  Ins.  Co.,  40  Fed. 
717;  Marline  v.  International  Life  Assur.  Soc,  62  Barb.  (N.  Y.) 
181;  Tripp  v.  Northwestern  Live-Stock  Ins,  Co.,  91  Iowa,  278,  59 
N.  W.  1;  Dryer  v.  Security  Fire  Ins.  Co.,  94  Iowa,  471,  62  N.  W. 
798;  Mechem,  Agency,  §  276.  See  post,  "Statutory  Regulation  of 
Agency;"  Gore  v.  Canada  Life  Assur.  Co.,  119  Mich.  136,  77  N.  W. 
650. 

"Sun  Fire  Office  v.  Wich,  6  Colo.  App.  103,  39  Pac.  587;  Dryer  v. 
Security  Fire  Ins.  Co.,  94  Iowa,  471,  62  N.  W.  798;  German  Ins.  Co. 
V.  Davis.  40  Neb.  700,  59  N.  W.  698. 

"  Herman  v.  Phoenix  Mut.  Life  Ins.  Co.,  17  Minn.  153. 

"First  Nat.  Bank  of  Devils  Lake  v.  Manchester  Fire  Assur.  Co.,. 
64  Minn.  100. 


§  79  agent  mrst  be  disinterested.  165 

Agent  Must  be  Disinteeested. 

§  79.  An  agent  cannot  bind  his  principal  by  acts  in  his  own 
favor.^o 

The  acts  of  an  agent  wlio  represents  both  insurer  and  in- 
sured in  the  insuring  of  property  are  not  binding  on  his 
principals  unless  ratified  by  them.^^  An  agent  of  an  insurer 
who  makes  application  to  it  for  insurance  on  his  ovm  prop- 
erty, directly  or  indirectly  for  his  own  benefit,  is  acting  for 
himself,  and  his  acts  or  knowledge  do  not  bind  his  principal. ^^ 
An  insurance  company  is  not  liable  on  a  policy  written  by 
an  agent  for  the  company  on  property  pled'ged  to  banks  of 
Avhich  such  agent  was  president  or  cashier,  where  the  risk  was 
declined  by  the  company  for  other  reasons  than  the  agent's 
interest  in  the  property,  of  which  fact  the  company  was  not 
informed,  altliough  the  insured  was  not  notified  of  such 
refusal  until  after  the  property  was  destroyed,  where  she 
knew  of  such  agent's  interest  in  the  property.'*^  But  the  fact 
iliat  an  insurance  agent  who  issued  a  policy  to  a  school  district, 
was  at  the  same  time  director  of  the  district,  will  not  avoid  the 
policy,  where  the  president,  who  was  selected  for  that  purpose, 
acted  for  the  district  in  the  matter  and  the  agent  did  not.^'* 
But  one  who  is  a  mere  guard  or  watchman  over  property  and 

*°  Neuendorff  v.  World  Mut.  Life  Ins.  Co..  69  N.  Y.  389. 

^^  Hartford  Fire  Ins.  Co.  v.  McKenzie,  70  111.  App.  615;  Zimmer- 
mann  v.  Dwelling-House  Ins.  Co.,  110  Mich.  399,  68  N.  W.  215;  Mer- 
cantile Mut.  Ins.  Co.  V.  Hope  Ins.  Co.,  8  Mo.  App.  408;  Glens  Falls 
Ins.  Co.  V.  Hopkins,  16  111.  App!  220,  14  Ins,  Law  J.  317. 

"Ramspeck  v.  Pattillo,  104  Ga.  772,  42  L.  R.  A,  197;  Wildberger 
V.  Hartford  Fire  Ins.  Co.,  72  Miss.  338,  28  L.  R.  A.  220;  Harle  v. 
Council  Bluffs  Ins.  Co.,  71  Iowa,  401,  32  N.  W.  396. 

^Rockford  Ins.  Co.  v.  Winfield,  57  Kan.  576;  Idaho  Forwarding 
Co.  V.  Fireman's  Fund  Ins.  Co..  8  Utah.  41. 

"  German  Ins.  Co.  v.  Independent  School  District,  49  U.  S.  App. 
271,  80  Fed.  366.  As  to  agent  acting  for  both  with  knowledge  of  In- 
surer, see  Van  Schoick  v.  Niagara  Fire  Ins.  Co.,  68  N.  Y.  434. 


166  AGENTS.  §  80 

also  the  agent  of  an  insurance  company,  may,  at  the  request  of 
the  owner,  write  a  valid  policy  of  insurance  on  such  property 
in  the  company  of  which  he  is  such  agent.  ^^ 

Destkoted  Pkopeett. 

§  80.  An  agent  cannot  insure  destroyed  property. 

Power  is  invested  in  agents  for  the  promotion  and  protection 
of  the  interests  of  the  principal;  hence  no  agency,  however 
general  in  its  terms,  embraces  the  power  to  insure  property 
after  knowledge  that  it  has  been  lost.^^  Unless  a  binding 
contract  of  insurance  is  made  before  a  loss  occurs,  an  agent 
has  no  power  to  ratify  an  imperfect  contract  and  issue  a  cer- 
tificate of  insurance  thereafter. ^'^  Where  one  man  who  was 
agent  of  a  mercantile  company,  and  at  the  same  time  agent 
of  an  insurance  company,  is  told  by  the  manager  of  the  former 
company  to  renew  certain  policies  with  the  insurance  com- 
pany of  which  he  was  agent,  and  was  authorized  to  use  the 
funds  of  the  mercantile  company  for  that  purpose,  but  negli- 
gently fails  to  do  so,  after  having  agreed  to  do  it,  no  contract 
of  insurance  exists,  which  will  cover  a  subsequent  loss,  al- 
though the  agent  had  authority  to  issue  the  policies.^^  But 
an  agent  may,  after  a  loss,  fill  up  and  deliver  a  policy  which, 
previous  to  the  loss,  he  had  undertaken  to  execute.  This  is 
not  the  making;  but  the  fulfillino;  of  a  contract.^^ 


«Northrup  v.  Germania  Fire  Ins.  Co.,  48  "Wis.  420,  4  N.  W.  350. 
See  Powers  v.  New  England  Fire  Ins.  Co.,  68  Vt,  390. 

"  Stebbins  v.  Lancashire  Ins.  Co.,  60  N.  H.  65;  People  v.  Dimick, 
41  Hun  (N.  Y.).  616;  Hartford  Fire  Ins.  Co.  v.  McKenzie,  70-111. 
App.  615. 

''Blake  v.  Hamburg  Bremen  Fire  Ins.  Co.,  67  Tex.  160,  2  S.  W. 
368. 

*^  Idaho  Forwarding  Co.  v.  Fireman's  Fund  Ins.  Co.,  8  Utah,  41. 

*' Franklin  Fire  Ins.  Co.  v.  Colt,  20  Wall.  (U.  S.)  560. 


§  81  whom  does  agent  represent.  167 

Whom  Does  Agent  Represent. 

§  81.  "Whether  a  person  acting  in  the  transactions  leading  up 
to  a  contract  of  insurance  is  the  agent  of  the  insurer  or  the  in- 
sured is  a  mixed  question  of  law  and  fact,  to  be  determined 
from  the  circumstances  of  each  case. 

It  is  impossible  to  lay  down  any  hard  and  fast  rule  to  de- 
termine whether  one  taking  a  particular  part  in  the  negotia- 
tions prior  to  the  consummation  of  a  contract  of  insurance 
was,  in  so  doing,  the  agent  of  the  one  party  or  the  other.  The 
agent  issuing  the  policy  is  the  agent  of  the  insurer.  So  are 
his  subagents  and  clerks  and  solicitors  in  so  far  as  they  act 
in  and  about  matters  pertaining  to  the  business  of  the  insurer. 
But  all  these  might  be  agents  of  the  insurer  for  certain 
matters,  and  agents  of  the  insured  for  other  matters  con- 
nected with  the  same  transaction.  Solicitors  and  brokers  are 
agents  of  one  party  or  the  other  according  to  their  relations 
to  the  insurer  or  the  insured,  and  the  part  they  play  in  each 
particular  transaction.  Wliether  one  is  the  agent  of  the  in- 
surer or  the  insured  is  a  question  of  law  for  the  court,  or  of 
fact  for  the  jury,  or  a  mixed  question  of  law  and  fact,  to 
be  determined  by  the  circumstances  of  each  case.^^     There 

""State  V.  Johnson,  43  Minn.  350;  Gude  v.  Exchange  Fire  Ins.  Co., 
53  Minn.  220;  Fame  Ins.  Co.  v.  Mann,  4  111.  App.  485;  Commercial 
Fire  Ins.  Co.  v.  Allen,  80  Ala.  571;  Niagara  Ins.  Co.  v.  Lee,  73  Tex. 
641;  Harle  v.  Council  Bluffs  Ins.  Co..  71  Iowa.  401,  32  N.  W.  396; 
May  V.  Western  Assur.  Co.,  27  Fed.  260;  Campbell  v.  Supreme 
Lodge,  K.  of  P..  168  Mass.  397;  Smith  v.  Home  Ins.  Co.,  47  Hun 
(N.  Y.),  30;  How  v.  Union  Mut.  Life  Ins.  Co.,  80  N.  Y.  32;  Deitz  v. 
Providence  Washington  Ins.  Co.,  31  W.  Va.  851;  Pierce  v.  People,. 
106  111.  11;  North  British  &  M.  Ins.  Co.  v.  Crutchfield,  108  Ind.  518; 
Arff  V.  Starr  Fire  Ins.  Co.,  125  N.  Y.  57;  Sullivan  v.  Phenix  Ins.  Co., 
34  Kan.  170;  Kausal  v.  Minnesota  Farmers'  Mut.  Fire  Ins.  Ass'n,  31 
Minn.  17;  Continental  Life  Ins.  Co.  v.  Chamberlain,  132  U.  S.  304; 
Atlantic  Ins.  Co.  v.  Carlin,  58  Md.  336;  Susquehanna  Mut.  Fire  Ins. 
Co.  v.  Cu&ick,  109  Pa.  St.  157.  In  Noble  v.  Mitchell,  100  Ala.  519,  25 
L.  R.  A.  238,  it  was  held  that  one  who  placed  a  risk  through  brokers 


168  AGEOTS.  §  81 

is  no  general  nile  that  a  party  applying  to  an  insurance  troker 
in  respect  of  any  matter  thereby  under  all  circumstances 
makes  him  his  agent  in  that  matter.  The  question  of  whose 
agent  the  broker  is,  is  one  of  evidence  in  each  particular  case ; 
though  if  all  that  appears  is  the  fact  of  an  application  to  him, 
he  would  very  likely  be  regarded  as  the  agent  of  the  party 
applying  to  him.^^  If  the  insured  employs  an  insurance 
agent  to  place  insurance  for  him,  the  one  employed  is  the 
agent  of  the  insured  and  not  the  agent  of  the  insurer ;  but  if 
acting  on  behalf  of  the  company,  or  the  agent  of  the  company, 
the  broker  solicits  the  insurance,  he  is  the  agent  of  the  com- 
pany at  least  to  the  extent  of  knowdedge  acquired  in  securing 
the  insurance  and  as  to  matters  and  acts  necessarily  incidental 
to  his  procuring  the  insurance.^ ^ 

On  principle,  as  well  as  for  considerations  of  public  policy, 
agents  of  insurance  companies,  authorized  to  procure  applica- 
tions for  insurance,  and  to  forward  them  to  the  companies 
for  acceptance,  must  be  deemed  the  agents  of  the  insurers  and 
not  of  the  insured  in  all  that  they  do  in  preparing  the  appli- 
cation, or  in  any  representations  that  they  may  make  to  the 
insured  as  to  the  character  or  effect  of  the  statements  therein 


in  another  state  acted  as  agent  for  insurer,  under  the  statute  in 
force  in  Alabama.  See  post,  "Statutory  Regulations  of  Agency;" 
"Brokers  and  Solicitors." 

"  Parker  &  Young  Mfg.  Co.  v.  Exchange  Fire  Ins.  Co.,  166  Mass. 
484,  44  N.  E.  615. 

^-  Coles  V.  Jefferson  Ins.  Co.,  41  W.  Va.  261,  25  Ins.  Law  J.  247,  23 
S.  E.  732;  United  Firemen's  Ins.  Co.  v.  Thomas  (C.  C.  A.),  92  Fed. 
127;  Estes  v.  Aetna  Mut.  Fire  Ins.  Co.,  67  N.  H.  597;  McElroy  v. 
British  America  Assur.  Co.  (C.  C.  A.),  94  Fed.  990;  Gaysville  Mfg. 
Co.  V.  Phoenix  Mut.  Fire  Ins.  Co.,  67  N.  H.  457;  Fromherz  v.  Yank- 
ton Fire  Ins.  Co.,  7  S.  D.  187,  63  N.  W.  784;  Michigan  Pipe  Co.  v. 
Michigan  F.  &  M.  Ins.  Co..  92  Mich.  482,  20  L.  R.  A.  277;  John  R. 
Davis  Lumber  Co.  v.  Hartford  Fire  Ins.  Co.,  95  Wis.  206,  70  N.  W.  84. 


§  81  WHOM   DOES  'AGENT   KEPKESENT.  169 

contained.  This  rule  is  rendered  necessary  by  the  manner  in 
which  business  is  now  usually  done  by  the  insurers.  They 
supply  these  agents  with  printed  blanks,  stimulate  them  by  the 
promise  of  liberal  commissions,  and  then  send  them  abroad 
in  tlie  community  to  solicit  insurance.  The  companies  em- 
ploy them  for  that  purpose,  and  the  public  regard  them  as  the 
agents  of  the  companies  in  the  matter  of  preparing  and  filling 
up  the  applications — a  fact  which  the  companies  perfectly 
understand.  The  parties  who  are  induced  by  these  agents 
to  make  applications  for  insurance  rarely  know  anything 
about  the  general  officers  of  the  company,  or  its  constitution  or 
by-laws,  but  look  to  the  agent  as  its  full  and  complete  repre- 
sentative in  all  that  is  said  or  done  in  regard  to  the  application. 
And  in  view  of  the  apparent  authority  with  which  the  com- 
panies clothe  these  solicitors,  they  have  a  perfect  right  to 
consider  them  sucli.^^  An  insurance  agent,  who,  in  pur- 
suance of  general  directions  given  him  by  the  owners  of 
property,  procures  a  second  policy  on  the  same  from  a  com- 
pany not  represented  by  him,  through  an  agent  who  was  in 
the  habit  of  exchangiiig  policies  with  him,  and  who  charged 
the  premiums  to  him,  acts  in  getting  insurance  solely  as  the 
agent  of  the  proj^erty  owners.^^^  In  ]\IcGraw  v.  Germania 
Fire  Ins.  Co.,  application  was  made  to  agents  for  insurance. 

"^American  Life  Ins.  Co.  v.  Mahone,  21  Wall.  (U.  S.)  152;  Union 
Mut.  Ins.  Co.  V.  Wilkinson,  13  Wall.  (U.  S.)  222;  Malleable  Iron 
Works  V.  Phoenix  Ins.  Co.,  25  Conn.  465;  Hough  v.  City  Fire  Ins. 
Co.,  29  Conn.  10;  Woodbury  Savings  Bank  &  Building  Ass'n  v. 
Charter  Oak  F.  &  M.  Ins.  Co.,  31  Conn.  517;  Miner  v.  Phoenix  Ins. 
Co.,  27  Wis.  693;  Winans  v.  Allemania  Fire  Ins.  Co.,  38  Wis.  342; 
Rowley  v.  Empire  Ins.  Co.,  36  N.  Y.  550;  Brandup  v.  St.  Paul  F.  & 
M.  Ins.  Co.,  27  Minn.  393,  2  Am.  Lead.  Cas.  (5th  Ed.)  917  et  seq.; 
Wood,  Ins.  c.  12;  May,  Ins.  §§  120,  139;  Kausal  v.  Minnesota  Farm- 
ers' Mut.  Fire  Ins.  Ass'n,  31  Minn.  17.  But  see  Northrup  v.  Piza,  43 
App.  Div.  284,  60  N.  Y.  Supp.  363. 

""  Merchants'  Ins.  Co.  v.  Union  Ins.  Co.,  162  111.  173. 


170  AGENTS.  §  82 

Tliej  were  nuable  to  place  the  whole  amount  desired  in  com- 
panies which  they  represented  and  went  to  the  agent  of  other 
companies  from  whom  they  obtained  the  balance.  They 
made  to  such  agent  verbal  representations  regarding  the  con- 
ditions of  the  property  on  which  insurance  was  desired.  With 
these  representations  insured  was  not  concerned.  In  an  ac- 
tion on  a  policy,  thus  procured  by  such  agents,  it  was  held 
that  they  were  the  agents  of  the  company,  not  of  insured,  and 
the  x)olicy  could  not  be  avoided  on  account  of  the  falsity  of 
representations  made  by  them.^'* 

Statutory  Regulation  of  Agency. 

§  82.  It  is  within  the  power  of  a  state  to  fix  the  status  of 
those  acting  as  solicitors  or  brokers  or  taking  any  steps 
towards  the  procuring  or  issuing  of  an  insurance  policy. 

Such  statutory  regulations  supersede  any  stipulations  or 
agreements  of  the  parties  to  the  contrary. 

Statutes  imposing  civil  or  criminal  liability  upon  agents  of 
a  foreign  insurance  company  doing  business  within  a  stato 
without  license  are  valid. 

Such  statutes  are  strictly  construed  against  agents. 

Several  states  have  passed  laws  to  the  effect  that  "whoever 
solicits,  procures,  or  receives  in  or  transmits  from  any  state 

"54  Mich.  145;  Michigan  Pipe  Co.  v.  Michigan  F.  &  M.  Ins.  Co., 
92  Mich.  482,  20  L.  R.  A.  277.  In  May  v.  Western  Assur.  Co.,  27  Fed. 
260,  plaintiff  made  application  to  B.  for  insurance.  They  had  dealt 
with  each  other  for  years,  and  B.  knew  the  condition  of  the  prop- 
erty. He  was  unwilling  to  carry  the  full  amount  asked  for  in  com- 
panies he  represented,  and  applied  to  C,  agent  of  another  company, 
for  a  portion  of  it.  Without  communicating  with  plaintiff  and  with- 
out knowledge  concerning  the  property,  C.  took  the  risk,  issued  a 
policy,  and  delivered  it  to  B.,  and  he  to  A.  The  court  held  that 
plaintiff  and  B.  acted  as  principals;  that  if  C.  chose  to  act  upon  rep- 
resentations made  by  B.  whom  he  regarded  as  a  subagent,  his  prin- 
cipal Avas  bound.  See,  also.  Mesterman  v.  Home  Mut.  Ins.  Co.,  5 
Wash.  524.  24  Am.  St.  Rep.  877. 


§  82  STATDTORY   REGULATION    OF    AGENCY.  171 

any  application  other  than  his  own  for  membership  or  insur- 
ance in  any  corporation  or  association  shall  be  deemed  and 
held  to  be  the  agent  of  such  corporation  or  association."  ^^ 
The  purpose  of  these  statutes  is  to  settle,  as  between  the  par- 
ties to  the  contract  of  insurance,  the  relations  of  the  agents 
through  whom  the  negotiations  were  conducted.  Many  in- 
surance companies  provide  in  their  applications  and  policies, 
that  the  agent  through  whom  the  application  was  procured, 
shall  be  the  agent  of  the  insured.  Under  that  provision  they 
are  able  to  avail  themselves,  in  case  of  loss,  of  defenses  which 
woidd  not  have  been  available  if  the  solicitor  had  been  re- 
garded as  their  agent.  Thence  arise  cases  of  apparent  hard- 
ship and  injustice.  That  is  the  e\al  which  is  intended  to 
be  remedied  by  these  statutes,  and  they  ought  to  be  so  in- 
terpreted as  to  accomplish  that  result.  These  statutes  are 
constitutional.^^     The  power  with  which  persons  authorized 

"Joyce,  Ins.  §  512  et  seq.;  Gen.  St.  Conn.  1888,  §§  2898,  2923; 
Ga.  Laws  1887,  p.  121,  §  9;  McLain's  Iowa  Code  1888,  §  1732;  Rev. 
St.  Maine  1883,  p.  445,  §  19;  Acts  Mass.  1887,  c.  214,  §  87;  Ann. 
Code  Miss.  1892,  §  2327;  Rev.  St.  Mo.  1889,  §  5915;  Comp.  St.  Neb. 
1891,  c.  16.  §  8;  Laws  N.  H.  1889,  c.  94,  §  2;  Laws  N.  Dak.  1891, 
p.  203,  §  28;  Rev.  St.  Ohio,  Smith  &  B.  1890,  §  3644;  St.  Okla.  1890, 
p.  637,  §  23;  Pub.  Laws  R.  I.  Jan.  1884,  p.  55;  Id.  Jan.  1885,  p.  63: 
St.  S.  C.  1883,  p.  460,  §  6;  Rev.  Laws  Vt.  1880,  §  3620,  p.  697;  Acts 
Va.  1887,  p.  349,  c.  271,  §  5;  Sanb.  &  B.  Ann.  Wis.  St.  1889,  Vol.  1, 
p.  1186,  §  1977;  Laws  Minn.  1895,  c.  175,  §§  25,  88,  91;  Rev.  St.  Tex. 
1895,  art.  3093;  Code  Ala.  §  1205.  For  statutory  regulation  of  ad- 
justers of  foreign  unlicensed  insurance  companies,  see  French  v. 
People,  6  Colo.  App.  311,  40  Pac.  463,  where  the  court  held  that  con- 
struction of  the  statute  which  would  punish  a  professional  adjuster 
exercising  his  vocation  anywhere  would  make  such  statute  void. 
See,  also,  People  v.  Gilbert,  44  Hun  (N.  Y.),  522. 

=""Cook  V.  Federal  Life  Ass'n,  74  Iowa,  746,  35  N.  W.  500;  St.  Paul 
F.  &  M.  Ins.  Co.  V.  Shaver,  76  Iowa,  282,  41  N.  W.  19;  Continental 
Life  Ins.  Co.  v.  Chamberlain,  132  U,  S.  304;  Paul  v.  Virginia,  8 
Wall.  (U.  S.)  168;  Noble  v.  Mitchell,  164  U.  S.  367,  100  Ala.  519,  25 
L.  R.  A.  238;  Hooper  v.  California,  155  U.  S.  648;  List  v.  Com., 
118  Pa.  St.  322;  German  Ins.  Co.  v.  Everett  (Tex.),  36  S.  W.  125. 


172  AGENTS.  §  82 

by  an  insurance  company  to  solicit  insurance  or  receive  pre- 
miums, and  declared  by  statute  to  be  the  agents  of  the  com- 
pany to  all  intents  and  purposes,  are  invested  by  law  for  tbe 
protection  of  the  public,  cannot  be  limited  by  a  clause  in  the 
application,  providing  that  no  statements,  representations, 
promises  or  information  given  to  such  person  shall  be  binding 
on  the  company,  or  affect  its  rights,  unless  reduced  to  writing 
and  presented  to  the  officers  of  the  company  at  its  home  office. 
Any  information  given  by  an  applicant  to  such  agents  is  in 
contemplation  of  law  given  to  the  company  itself,  and  pre- 
vents a  defense  on  the  grounds  that  it  is  not  set  out  in  the 
application.  The  knowledge  of  such  an  agent  is  imputed  to 
his  principal.^ ^ 

The  rule  that  insured  must  know  at  his  peril  whether  the 
person  with  whom  he  is  negotiating  as  an  agent  has  the 
authority  he  assumes  to  exercise,  is  changed  by  such  a  statute ; 
and  an  insurance  company  is  responsible  for  the  acts  of  a 
person  who  assumes  to  represent  it  by  soliciting  insurance  if  it 
issue  a  policy,  or  otherwise  it  accepts,  adopts,  or  takes  ad- 
vantage of  his  acts.^*  And  under  such  statutes  a  company  is 
bound  by  a  policy  issued  by  its  agent  in  territory  wherein  th(; 
agent  was  forbidden  to  insure.^^  An  oral  contract  for  im- 
mediate insurance  is  within  the  powers  of  such  an  agent  not- 

"New  York  Life  Ins.  Co.  v.  Russell  (C.  C.  A.),  77  Fed.  94;  Alkan 
v.  New  Hampshire  Ins.  Co.,  53  Wis.  136;  St.  Paul  F.  &  M.  Ins.  Co. 
V.  Shaver,  76  Iowa,  282;  Marston  v.  Kennebec  Mut.  Life  Ins.  Co.,  89 
Me.  266,  36  Atl.  389;  Bennett  v.  Council  Bluffs  Ins.  Co.,  70  Iowa, 
600;  Wood  v.  Firemen's  Fire  Ins.  Co.,  126  Mass.  316  (contra).  And 
see  John  R.  Davis  Lumber  Co.  v.  Hartford  Fire  Ins.  Co.,  95  Wis. 
226,  70  N.  W.  84,  27  L.  R.  A.  131;  United  Firemen's  Ins.  Co.  v. 
Thomas  (C.  C.  A.),  92  Fed.  127. 

'*  Alkan  v.  New  Hampshire  Ins.  Co.,  53  Wis.  136;  Body  v.  Hart- 
ford Fire  Ins.  Co..  62  Wis.  157,  and  cases  in  note  57. 

■'Knox  V.  Lycoming  Fire  Ins.  Co.,  50  Wis.  671;  German  Ins.  Co. 
V.  Everett  (Tex.),  36  S.  W.  125. 


§  82  STATUTORY    REGULATION    OF   AGENCY.  175 

withstanding  a  stipulation  in  the  application  (wliicli  insured 
signed  without  knowing  its  contents)  that  the  insurer  would 
not  be  liable  until  the  application  and  premium  were  received 
bj  its  secretary.^''  An  insurance  broker  employed  by  an 
insured  to  procure  insurance  is  the  latter's  agent  in  respect  to 
everything  that  does  not  conflict  with  his  agency  for  the  in- 
surer as  declared  by  statute,  and  he  may  bind  the  insured  in 
matters  pertaining  to  the  procurement  of  the  policy.^  ^ 

Validity  and  Enforcement  of  Penal  Statutes. 

A  state  can  lawfully  punish  or  regidate,  by  the  imposition 
of  civil  liability  or  otherwise,  the  doing,  by  agents  of  a  foreign 
insurance  company  within  its  territory,  of  acts  which  are  cal- 
culated to  neutralize  and  make  ineffective  a  statute  prescribing 
conditions  precedent  to  the  right  of  such  corporation  to  do 
business  within  the  state;  and  it  can  make  an  agent  liable 
personally  to  the  insured  for  a  loss  covered  by  a  policy  issued 
by  the  agent  of  a  company  not  entitled  to  do  business  in  the 
state.^^  The  fact  that  an  insurance  solicitor  placed  a  risk 
through  brokers  in  another  state,  without  knowing  what  com- 

^^  Mathers  v.  Union  Mut.  Ace.  Ass'n,  78  Wis.  588.  47  N.  W.  1130, 
11  L.  R.  A.  83.  Compare  Ebert  v.  Mutual  Reserve  Fund  Life  Ass'n, 
81  Minn.  116,  83  N.  W.  507. 

"'  John  R.  Davis  Lumber  Co.  v.  Hartford  Fire  Ins.  Co.,  95  Wis.  226, 
70  N.  W.  84,  37  L.  R.  A.  131,  2  Am.  &  Eng.  Enc.  Law  (1st  Ed.),  595; 
Wood  v.  Firemen's  Ins.  Co.,  126  Mass.  316. 

"■'Noble  v.  Mitchell,  164  U.  S.  367,  17  Sup.  Ct.  110;  Hooper  v.  Cali- 
fornia, 155  U.  S.  648;  Seamans  v.  Knapp-Stout  &  Co.  Company,  8» 
Wis.  171,  61  N.  W.  757;  Paul  v.  Virginia,  8  Wall.  (U.  S.)  168;  Con- 
tinental Life  Ins.  Co.  v.  Chamberlain,  132  U.  S.  304;  Indiana  Millers' 
Mut.  Fire  Ins.  Co.  v.  People,  65  111.  App.  355;  Parker  v.  Lamb,  91> 
Iowa,  265.  68  N.  W.  686;  State  v.  Stone,  118  Mo.  388.  For  prosecu- 
tions under  such  statutes,  see  People  v.  Howard,  50  Mich.  239,  15 
N.  W.  101;  State  v.  Johnson,  43  Minn.  350;  French  v.  People,  6 
Colo.  App.  311,  40  Pac.  463;  People  v.  Gilbert,  44  Hun  (N.  Y.),  522; 
State  v.  Farmer,  49  Wis.  459,  5  N.  W.  892. 


174  AGENTS.  §  82 

pany  took  it,  will  not  release  him  from  liability  under  the 
provisions  of  such  a  statute.  In  a  Minnesota  case,  the  pro- 
curing of  a  single  policy  through  brokers  was  held  not  "acting 
as  agent"  for  the  company  issuing  the  policy.^^  In  a  prosecu- 
tion against  the  agent  of  a  foreign  insurance  company  for 
acting  as  agent  without  the  proper  certificate  of  the  Insurance 
Commission  it  was  held  immaterial  and  no  defense  that  the 
company  he  represented  had  complied  with  the  statute.^ ^ 
Under  Illinois  Act  1869,  making  it  unlawful  for  any  agent  or 
agents,  or  any  other  person  in  any  manner,  to  aid  an  insurance 
company,  not  incorporated  in  the  state,  and  not  entitled  to 
do  an  insurance  business  therein,  a  person  or  corporation  is 
liable  for  aiding  such  foreign  insurance  company  in  the 
transaction  of  insurance  business  in  any  manner,  although 
not  the  agent  of  the  company  in  the  ordinary  sense  of  the  term, 
and  although  acting  under  a  contract  with  the  insured  ex- 
pressly stating  that  such  person  or  corporation  is  his  agent 
only.®^  And  one  whose  business  is  to  negotiate  insurance  in 
domestic  companies  acts  as  an  insurance  broker  in  informing 
a  duly  licensed  agent  of  foreign  companies  that  certain  persons 
desire  to  obtain  insurance  on  their  lives,  within  Mass.  Stat. 
1887,  ch.  214,  §§  93-98,  providing  that  whoever  for  compen- 
sation "acts,  or  aids  in  any  manner,"  in  negotiating  contracts 
of  insurance  shall  be  deemed  an  insurance  broker  and  no  per- 
son shall  act  as  such  broker  without  procuring  a  license 
therefor.®^ 

«  Noble  V.  Mitchell,  100  Ala.  519,  25  L.  R.  A.  238,  164  U.  S.  367; 
post,  note  64. 

"  State  V.  Johnson.  42  Minn.  350. 

'=  People  V.  Peoples'  Ins.  Exchange,  126  111.  466,  2  L.  R.  A.  340; 
Pierce  v.  People,  106  111.  18. 

""  Pratt  V.  Burdon,  168  Mass.  596,  47  N.  E.  419.  As  to  what  consti- 
tutes doing  business  under  such  statutes,  see  Cooper  Mfg.  Co.  v. 
Ferguson,  113  U.  S.  727,  5  Sup.  Ct.  739;  State  v.  Johnson,  43  Minn. 
350. 


^  83  evidence  of  agency.  175 

Evidence  of  Agency. 

§  83.  Authority  of  an  agent  to  act  for  an  insurer  may  be  shown 
by  the  acts  and  conduct  of  the  parties  as  well  as  by  proof  of 
direct  authority. 

The  delivery  of  blank  policies  and  renewal  receipts  by  an 
insurer  to  an  agent  to  be  by  the  latter  filled  in  and  issued 
shows  the  authority  of  the  agent  to  represent  the  insurer  in  all 
matters  connected  with  soliciting  insurance  and  issuing,  can- 
celing, and  renewing  policies. 

The  admissions  of  the  officers  and  general  agents  of  the  in- 
surer, while  acting  within  the  line  of  their  duty,  as  to  the  au- 
thority of  an  agent  are  evidence  of  the  same. 

There  is  no  presumption  concerning  the  existence  or  extent 
of  an  agent's  authority.  Neither  an  individual  nor  a  corpora- 
tion can  be  bound 'by  the  acts  of  an  alleged  agent  without 
proof  of  the  agency.  Whether  the  relation  of  principal  and 
agent  exists  between  the  two  parties  is  generally  a  question  of 
fact.  But  where  facts  are  undisputed,  or  the  evidence  is  such 
that  only  one  inference  or  conclusion  can  properly  and  rea- 
sonably be  drawn  from  them,  it  then  becomes  the  province  and 
duty  of  a  court  to  determine  whether  they  create  any  agency, 
and  if  so,  with  Avhat  powers  and  limitations.  This  is  true 
Avhether  the  agency  is  sought  to  be  established  by  previous 
direct  authorization,  or  by  the  course  of  conduct  and  dealings 
of  the  parties  before  the  act  alleged,  or  by  subsequent  ratifica- 
tion. And  while  it  is  not  always  necessary  to  prove  an  ex- 
press contract  between  the  parties  in  order  to  establish  the 
relation  of  principal  and  agent,  either  that  must  be  done,  or 
the  acts,  dealings  and  conduct  of  the  parties  must  be  proved 
to  be  of  such  a  nature  that  the  relation  may  properly  be  in- 
ferred therefrom.  An  exception  to  this  rule  exists  of  course 
where  the  agency  is  created  by  statute.®^ 

"Ante,  note  1. 


176  AGENTS.  §  83 

Acts  and  Conduct  of  Parties. 

It  may  be  stated  as  a  general  rule  that  wherever  an  insur- 
ance company  holds  one  out  to  the  public  as  its  agent,  or 
knowingly  permits  one  to  act  as  its  agent  without  dissent, 
or  where  the  course  of  dealing  between  the  agent  and  insurer 
has  been  such  as  to  warrant  tlie  reasonable  presumption  of  au- 
thority in  the  agent,  the  insurance  company  will  not  be  heard 
to  deny  authority  in  such  agent  so  as  to  affect  the  rights  of 
third  parties  who  have  relied  and  acted  thereon  in  good  faith 
and  with  reasonable  prudence.^^  Aside  from  any  other  facts 
the  authority  of  an  agent  to  act  for  an  insurer  may  be  inferred 
from  the  course  of  dealing  between  them,  and  evidence  that 
tlie  agent  assumed  to  act  for  the  insurer  with  its  knowledge, 
but  without  its  dissent,  is  sufficients^  But  such  authority 
cannot  be  inferred  from  the  acts,  statements,  or  representa- 
tions of  the  agent  alone  though  he  assunied  to  act  for  the 

"' Hamilton  v.  Home  Ins.  Co..  94  Mo.  353;  Fay  v.  Richmond,  43  Vt. 
25;  Perkins  v.  Washington  Ins.  Co.,  4  Cow.  (N.  Y.)  645;  Lungstrass 
V.  German  Ins.  Co.,  57  Mo.  107;  Indiana,  B.  &  W.  Ry.  Co.  v.  Adam- 
son,  114  Ind.  282;  Woodbury  Sav.  Bank  &  Bldg.  Ass'n  v.  Charter  Oak 
F.  &  M.  Ins.  Co.,  31  Conn.  518;  Lightbody  v.  North  American  Ins.  Co., 
23  Wend.  (N.  Y.)  18.  In  McArthur  v.  Home  Life  Ass'n,  73  Iowa,  336, 
35  N.  W.  430,  the  court  held  the  insurer  bound  by  the  act  of  one  who 
claimed  to  be  its  agent,  who  forged  some  of  the  papers  in  an  ap- 
plication on  which  a  policy  was  issued  by  the  company  and  altered 
by  the  agent,  where  the  premium  was  paid  by  the  insured  without 
knowledge  of  the  fraudulent  acts  of  the  agent.  An  insurance  com- 
pany is  estopped  to  deny  that  one  sent  out  by  it  to  solicit  business 
for  it  is  its  agent,  although  the  policy  provides  that  no  person, 
unless  authorized  in  writing,  shall  be  deemed  to  be  its  agent.  Hart 
V.  Niagara  Fire  Ins.  Co.,  9  Wash.  620,  27  L.  R.  A.  86;  Spitz  v.  Mutual 
Ben.  Life  Ass'n,  5  Misc.  Rep.  245,  25  N.  Y.  Supp.  469. 

"Newman  v.  Springfield  F.  &  M.  Ins.  Co.,  17  Minn.  123  (Gil.  98); 
Guernsey  v.  American  Ins.  Co.,  17  Minn.  104  (Gil.  85);  Day  v.  Me- 
chanics' &  Traders'  Ins.  Co.,  88  Mo.  325;  Flynn  v.  Equitable  Life 
Ins.  Co.,  78  N.  Y.  568;  Mechem,  Agency,  §§  84,  276;  Connecticut  Mut. 
Life  Ins.  Co.  v.  Bulte.  45  Mich.  113. 


§  83  EVIDENCE    OF   AGENCY.  177 

insurer. '^^  Proof  of  ratification  or  adoption  of  an  unautlior- 
ized  act  by  an  agent  must  show  that  the  action  of  the  principal 
was  tahen  vnth  full  knowledge  of  the  acts  of  the  agent.'^-' 
Where  defendant's  cashier  made  representations  to  a  policy 
holder  in  its  office  on  a  matter  relating  to  the  business  of  the 
corporation  which  were  designed  to,  and  did,  affect  an  act 
beneficial  to  it,  and  which  was  acted  on  by  it,  it  was  held 
in  the  absence  of  proof  as  to  the  cashier's  authority,  that 
there  was  prima  facie  evidence  of  his  authority  to  bind  his 
principal.'^^  And  where  the  secretary  of  an  insurance  com- 
pany gave  his  assent  to  the  assignment  of  a  policy,  his  au- 
thority to  do  so  can  be  presumed."^^  The  appointment  of 
an  officer  who  acts  publicly  as  such  in  connexion  with  cor- 
porate affairs,  can  be  assumed  in  the  absence  of  anything 
warranting  a  contrary  inference. '^^  In  Enos  v.  St.  Paul  P. 
&:  M.  Ins.  Co.,  the  supreme  court  of  South  Dakota  held  that 
when  in  a  suit  against  an  insurer,  its  answer  alleged  that  it 
had  caused  an  examination  of  the  insured  to  be  had  after  the 
loss,  and  the  evidence  showed  that  at  such  examination  a  per- 
son appeared,  claimed  to  represent  the  company  and  conducted 
such  examination  apparently  for  it,  and  afterwards  in  reply 

"Cases  supra;  Huesinkveld  v.  St.  Paul  F.  &  M.  Ins.  Co.  (Iowa), 
76  N.  W.  696;  Marvin  v.  Wilber,  52  N.  Y.  270;  Reynolds  v.  Conti- 
nental Ins.  Co.,  36  Mich.  131;  Graves  v.  Horton,  38  Minn.  66;  Flem- 
ing V.  Hartford  Fire  Ins.  Co.,  42  Wis.  616;  Rahr  v.  Manchester  Fire 
Assur.  Co..  93  Wis.  255,  67  N.  W.  725. 

"Morse  v.  St.  Paul  F.  &  M.  Ins.  Co..  21  Minn.  407.  See  post, 
§  119. 

"Knauer  v.  Globe  Mut.  Life  Ins.  Co.,  16  Jones  &  S.  (N.  Y.)  454; 
Abraham  v.  North  German  Ins.  Co.,  40  Fed.  717. 

"Conover  v.  Mutual  Ins.  Co..  3  Denio  (N.  Y.),  254. 

"Bank  of  U.  S.  v.  Dandridge,  12  Wheat.  (U.  S.)  89;  Merchants' 
Bank  v.  State  Bank,  10  Wall.  (U.  S.)  644;  Fayles  v.  National  Ins. 
Co.,  49  Mo,  380;  Aetna  Ins.  Co.  v.  Maguire,  51  111.  342;  Indiana  B. 
&  W.  Ry.  Co.  V.  Adamson,  114  Ind.  282. 

KERR,  INS.—  13 


178  AGENTS.  §  83 

to  a  letter  from  tlie  assured  to  (he  company  In  regard  to  such 
examination,  the  same  person  wrote  an  answer,  purporting  to 
be  that  of  the  company,  "UT:'itten  on  one  of  its  letter  heads,  on 
which  such  person  was  advertised  as  the  adjuster  of  the  com- 
pany, the  jury  might  properly  find  that  such  person  was  the 
agent  of  the  company. '^^ 

Possession  of  Blank  Policies  as  Evidence  of  Agency. 

Where  an  insurance  company  entrusts  to  an  agent  blank 
policies,  and  renewal  receipts,  signed  by  its  president  and 
secretary,  to  be  filled  up  by  such  agent  when  issued,  it  consti- 
tutes him  its  agent  for  the  purpose  of  soliciting  and  procuring 
insurance  and  issuing  policies  for  it  thereon  and  renewing 
the  same,  and  all  matters  connected  tlierewith,  and  it  cannot 
question  the  general  authority  of  the  agent  to  act  for  it  in 
those  particulars.'^® 

Admissions  of  Officers  and  Agents. 

The  authority  of  an  agent  cannot  be  proved  by  the  mere 
declarations  or  admissions  of  the  agent  himself;  but  he  is  a 
competent  witness  upon  a  trial  to  testify  to  the  existence  of 
facts  which  constitute  the  agency.  The  agency  and  power  of 
a  subordinate  may  sometimes  be  proven  by  the  declarations 
and  admissions  made  by  a  managing  agent  while  acting  within 
the  scope  of  his  agency  and  when  they  relate  to  the  subject  or 

"4  S.  D.  639,  57  N.  W.  919;  Slater  v.  Capital  Ins.  Co.,  89  Iowa, 
628,  57  N.  W.  422. 

'"Carroll  v.  Charter  Oak  Ins.  Co.,  40  Barb.  (N.  Y.)  292;  Union  Ins. 
Co.  V.  McGookey.  33  Ohio  St.  555;  Train  v.  Holland  Purchase  Ins. 
Co.,  68  N.  Y.  208;  Howard  Ins.  v.  Owen's  Adm'rs,  94  Ky.  197.  But 
see  More  v.  New  York  Bowery  Fire  Ins.  Co.,  130  N.  Y.  537,  29  N.  E. 
757,  where  the  court  held  insurer  was  not  bound  by  an  oral  contract 
of  its  agent  to  insure  where  the  agent  told  plaintiff  that  his  powers 
were  limited  to  taking  and  forwarding  applications  for  approval  or 
rejection  of  the  company. 


§  84:  APPOINTMENT    OF    AGENTS.  179 

matters  "with  reference  to  wliicli  lie  was  empowered  to  act  for 
his  principal.  Thus,  the  affidavit  of  the  president  of  an  insur- 
ance company  made  to  procure  a  continuance  in  an  action  on 
account  of  the  absence  of  a  witness,  is  competent  evidence 
against  the  company  of  the  facts  stated  therein,  viz. :  that 
the  witness  mentioned  in  the  affidavit  was  as  stated  therein 
its  agent  with  the  powers  claimed  for  him  by  the  president 
in  the  affidavit.'^^ 

Appointment  of  Agents. 

§  84.  No  unusual  formalities  are  required  in  the  appointment 
of  agents  of  insurance  companies  unless  prescribed,  by  statute 
or  required  by  the  charter  or  by-laws  of  the  company. 

One  may  become  the  agent  of  an  insurance  company  with 
greater  or  less  power  according  to  the  circumstances  of  the 
given  case  (1)  by  virtue  of  a  special  contract  either  oral  or 
written;  (2)  by  virtue  of  some  general  principle  of  the  law 
of  agency;  (3)  by  custom  and  course  of  dealing  between  him 
and  the  insurer ;  (4)  by  his  assuming  to  act  for  the  insurer 
with  its  knowledge  and  without  its  dissent;  (5)  by  the  insurer 
adopting  an  agent's  unauthorized  action  on  its  behalf;  (6)  by 
an  insurer  holding  him  out  as  its  agent  or  clothing  him  with 
apparent  power  to  represent  it;  (7)  by  virtue  of  some  pro- 
vision in  the  application  or  policy  furnished  by  the  insurer ; 
(8)  through  some  statutory  provision;  (9)  through  some 
provision  of  an  insurer's  charter  or  by-laws  vesting  specific 
powers  in  certain  officers  or  other  persons  collectively  or  in- 
dividually; (10)  ex  necessUate.'^^     In  case  of  foreign  insur- 

"  Schreiber  v.  German-American  Hail  Ins.  Co.,  43  Minn.  367;  Cot- 
ton States  Life  Ins.  Co.  v.  Edwards,  74  Ga.  220;  Bartlett  v.  Fire- 
men's Fund  Ins.  Co.,  77  Iowa,  155,  41  N.  W.  601;  Mechem,  Agency, 
§  102;  Scott  V.  Home  Ins.  Co..  53  Wis.  238,  10  N.  W.  387;  Agricult- 
ural Ins.  Co.  V.  Potts,  55  N.  J.  Law,  158,  39  Am.  St.  Rep.  637. 

"Perkins  v.  Washington  Ins.  Co.,  4  Cow.  (N.  Y.)   646;   Joyce,  Ins. 


180  AGENTS.  §  85- 

ance  companies,  tlie  statutes  of  many  states  Impose  conditions- 
regulating  the  appointment  of  their  agents  within  the  state, 
and  require  the  appointment  of  agents  upon  whom  service  of 
process  may  be  made  in  suits  against  such  companies.  Some 
states  prohibit  the  agents  of  foreign  insurance  companies 
doing  business  within  a  state  without  procuring  from  the 
commissioner  of  insurance  a  certificate  of  authority.  A  for- 
eign corporation  cannot  enforce  any  contracts  made  by  it  or 
its  agents  where  the  law  has  not  been  obeyed ;  "^^  but  such  con- 
tracts can  be  enforced  against  the  insurer.^" 

.  Classification"  of  Agekts. 

§  85.  The  agents  here  considered  are  either 

(a)  General  agents. 

(b)  OflB-cers  of  the  insurer,  or 

(c)  Special  or  local  agents. 

Insurance  agents  are  (1)  general;  or  (2)  officers  of  the  in- 
surer; or  (3)  special  with  either  plenary  or  limited  powers,, 
depending  upon  the  terms  of  the  grant  of  their  power  and 
upon  the  authority  exercised  by  them  with  the  assent  of  their 
principals.  The  nature  of  the  agency  and  the  extent  of  an 
agent's  powers  are  to  be  determined  by  the  same  rules  that 
control  in  respect  to  other  agencies.     An  insurer  may  limit 

§§  390  et  seq.,  408;  Emery  v.  Boston  Marine  Ins.  Co.,  138  Mass. 
398;  Independent  Mat.  Ins.  Co.  v.  Agnew,  34  Pa.  St.  96;  Greenleaf 
V.  Moody,  13  Allen  (Mass.),  363;  Witherell  v.  Maine  Ins.  Co.,  49 
Me.  200;  Newmark  v.  Liverpool  &  L.  F.  &  L.  Ins.  Co.,  30  Mo.  160; 
Leiber  v.  Liverpool,  L,  &  G.  Ins.  Co.,  6  Bush  (Ky.),  639;  Goodwillie 
V.  McCarthy,  45  111.  186;  Bradford  v.  Homestead  Fire  Ins.  Co.,  54 
Iowa,  598,  7  N.  W.  48;  Pacific  Mut.  Ins.  Co.  v.  Frank,  44  Neb.  320, 
62  N.  W.  454;  Fayles  v.  National  Ins.  Co.,  49  Mo.  380;  Mound  City 
Mut.  Life  Ins.  Co.  v.  Huth,  49  Ala.  529. 

"McCanna  &  Fraser  Co.  v.  Citizens'  T.  &  S.  Co.  (C.  C.  A.),  76  Fed.. 
420,  35  L.  R.  A.  236;  Randall  v.  Tuell,  89  Me.  443,  38  L.  R.  A.  143; 
Seamans  v.  Christian  Bros.  Mill.  Co.,  66  Minn.  205.  68  N.  W.  1065. 

•"Ganser  v.  Fireman's  Fund  Ins.  Co.,  34  Minn.  372,  25  N.  W.  943. 


§  86  GENERAL    AGENTS.  181 

the  powers  of  its  agents,  and  when  either  actual  knowledge 
of  a  limitation  on  an  agent's  power  or  snch  notice  thereof 
as  a  prudent  man  is  bound  to  regard,  is  brought  home  to  the 
insured,  he  is  estopped  from  claiming  that  such  limitation 
does  not  exist,  and  from  asserting  in  the  agent  powers  in  oppo- 
sition to  such  limitation.^  ^ 

Same  —  Genekal  Agents. 

§  86.  A  general  agent  of  an  insurance  company  is  one  •who 
has  all  the  powers  of  his  principal  in  relation  to  those  matters 
in  which  he  represents  his  principal. 

The  insurer  is  bound  by  the  knowledge  of  and  notice  to  its 
general  agent. 

A  general  agent  has  the  power  to  institute  civil  proceedings 
to  collect  money  due  his  principal.  As  to  his  power  to  insti- 
tute criminal  prosecutions,  quaere. 

Who  is  a  General  Agent. 

The  term  ''general  agent,"  in  insurance  matters,  is  often 
used  with  reference  to  the  geogi-aphical  extent  of  an  agent's 
authority,  in  contradistinction  to  a  "special"  or  "local"  agent 
who  may  have  equal  powers  within  a  more  limited  area. 
Whether  an  agent  belongs  to  one  class  or  the  other  is  often  a 
question  of  fact  depending  on  all  the  circumstances  and  sur- 
roundings of  the  case  and  the  parties.  Strictly  speaking 
the  term  "general  agent"  is  descriptive  of  one  who  stands  in 
the  place  of  a  representative  or  officer  of  a  company.  Such 
an  agent  may  generally  make  the  contract  which  the  insurer 
is  empowered  to  make.^^     An  agent  who  is  intrusted  with 

'^  Weidert  v.  State  Ins.  Co.,  19  Or.  261,  20  Am.  St.  Rep.  809.  "An 
universal  agent  is  one  authorized  to  transact  all  of  the  business  of 
his  principal  of  every  kind.  A  general  agent  is  an  agent  who  is  em- 
powered to  transact  all  of  the  business  of  his  principal  of  a  particu- 
lar kind  or  in  a  particular  place.  A  special  agent  is  one  authorized 
to  act  only  in  a  specific  transaction."     Mechem,  Agency,  §  6. 

'^Ewell's  Evans,  Agency,  p.  21;  Thompson,  Corp.  §  4878. 


182  AGENTS.  §  86 

the  management  of  tlie  company's  affairs  in  a  state  is  a  gen- 
eral agent,  thoiigli  liis  powers  be  restricted  to  a  single  state.^^ 
An  agent  authorized  to  receive  and  accept  proposals  for  risks, 
subject  to  the  approval  of  the  company,  to  issue  and  deliver 
policies,  and  renew  the  same,  and  receive  premiums  therefor, 
who  has  been  supplied  with  blanks  signed  by  the  president  to 
be  filled  and  countersigned,  is  a  general  agent.  ^^  Likewise 
an  agent  authorized  to  issue  and  renew  policies,  and  to  trans- 
act the  business  of  the  insurer  at  a  particular  place.^^ 

*»  Southern  Life  Ins.  Co.  v.  Booker,  9  Heisk.  (Tenn.)  606;  Hart- 
ford L.  &  A.  Ins.  Co.  V.  Hayden's  Adm'r,  90  Ky.  39;  Boehen  v.  Will- 
iamsburg City  Ins.  Co.,  35  N.  Y.  131;  Continental  Ins.  Co.  v.  Ruck- 
man,  127  111.  364,  27  N.  E.  77. 

"Georgia  Home  Ins.  Co.  v.  Kinnier's  Adm'x,  28  Grat.  (Va.)  88; 
Painter  v.  Industrial  Life  Ass'n,  131  Ind.  68;  German  Ins.  Co.  v. 
Gray,  43  Kan.  497;  Phenix  Ins.  Co.  v.  Hunger,  49  Kan.  178;  Millville 
Mut.  M.  &  F.  Ins.  Co.  v.  Mechanics'  &  W.  B.  &  L.  Ass'n,  43  N.  J. 
Law,  652;  King  v.  Council  Bluffs  Ins.  Co.,  72  Iowa,  310;  West  v. 
Norwich  Union  F.  Ins.  Co.,  10  Utah,  448;  Howard  Ins.  Co.  v.  Owen's 
Adm'rs,  94  Ky.  197;  Newark  Machine  Co.  v.  Kenton  Ins.  Co.,  50  Ohio 
St.  558;  Viele  v.  Germania  Ins.  Co.,  26  Iowa,  9;  Goode  v.  Georgia 
Home  Ins.  Co.,  92  Va.  392,  30  L.  R.  A.  842;  Hartford  Fire  Ins.  Co. 
V.  Orr,  56  111.  App.  629;  Harding  v.  Norwich  Union  F.  Ins.  Co.,  10 
S.  D.  64,  71  N.  W.  755.  "It  is  clear  that  a  person  authorized  to  ac- 
cept risks,  to  agree  upon  and  settle  the  terms  of  insurance  and  to 
carry  them  into  effect  by  issuing  and  renewing  policies,  must  be 
regarded  as  the  general  agent  of  the  company."  Pitney  v.  Glen's 
Falls  Ins.  Co.,  65  N.  Y.  6.  See,  also,  Post  v.  Aetna  Ins.  Co.,  43  Barb. 
(N.  Y.)  359;  Carroll  v.  Charter  Oak  Ins.  Co.,  40  Barb.  (N.  Y.)  292; 
Lightbody  v.  North  American  Ins.  Co.,  23  Wend.  (N.  Y.)  18;  Mc- 
Ewen  V.  Montgomery  County  Mut.  Ins.  Co.,  5  Hill  (N.  Y.),  105; 
Gloucester  Mfg.  Co.  v.  Howard  Fire  Ins.  Co.,  5  Gray  (Mass.),  498; 
Krumm  v.  Jefferson  Ins.  Co.,  40  Ohio  St.  225.  The  part  of  the  opin- 
ion in  Pitney  v.  Glen's  Falls  Ins.  Co.,  65  N.  Y.  6,  above  quoted,  is 
made  part  of  the  text  in  May,  Ins.  §  126.     See,  also,  §  129. 

«' Pitney  v.  Glen's  Falls  Ins.  Co.,  61  Barb.  (N.  Y.)  335,  65  N.  Y.  6; 
Continental  Ins.  Co.  v.  Ruckman,  127  111.  364;  Travelers'  Ins.  Co. 
V.  Harvey,  82  Va.  949;  Cole  v.  Union  Cent.  Life  Ins.  Co.  (Wash.), 
60  Pac.  68,  47  L.  R.  A.  204. 


86  GENERAL   AGENTS. 


183 


Powers  of  General  Agent. 

The  absolute  powers  of  a  general  agent  of  an  insurance  com- 
pany are  difficult  of  precise  definition.  They  vary  in  dif- 
ferent cases  according  to  the  power  given  the  agent  by  his 
principal,  the  power  which  the  agent  assumes  to  exercise  with 
the  acquiescence  of  the  principal,  the  distance  between  the 
agency  and  the  home  office,  the  customs  of  the  business  in  the 
locality  in  which  the  agency  is  situated,  and  the  necessities 
and  surroundings  of  the  given  case.^®  While  he  cannot  dis- 
pense with  or  modify  the  essential  character  or  substance  of 
the  contract,  he  can,  even  in  the  case  of  a  mutual  company 
where  greater  strictness  is  sometimes  required,  determine  as 
to  the  amount  and  nature  of  the  risk  and  the  rate  of  premium. 
He  may  make  such  memoranda  and  indorsements  modifying 
the  general  provisions  of  the  policy,  and  even  inconsistent 
therewith  as  in  his  discretion  seems  proper,  before  the  policy 
is  delivered  and  accepted.  He  may  also  insert  by  memoran- 
dum or  indorsement  a  description  of  the  property  insured,  in- 
consistent with  the  description  of  the  same  contained  in  the 
application.  His  acts  and  knowledge  are  those  of  his  prin- 
cipal. He  may  appoint  and  employ  sub-agents,  adjusters, 
and  appraisers  if  necessary,  for  the  furtherance  of  the  inter- 
ests of  his  principal.^'^     A  general  agent  of  a  foreign  insur- 

*"See  ante,  "General  Agents;"  Eclectic  Life  Ins.  Co.  v.  Fahren- 
krug,  68  111.  463;  Travellers'  Ins.  Co.  v.  Edwards,  122  U.  S.  457;  Mc- 
Gurk  V.  Metropolitan  Life  Ins.  Co.,  56  Conn.  528;  Eastern  R.  Co. 
V.  Relief  Fire  Ins.  Co.,  105  Mass.  570;  Union  Mut.  Ins.  Co.  v.  Wilk- 
inson, 13  Wall.  (U.  S.)  235;  Lungstrass  v.  German  Ins.  Co.,  57  Mo. 
107;  Jervis  v.  Hoyt,  2  Hun  (N.  Y.),  637;  Greenleaf  v.  Moody,  13 
Allen    (Mass.),  363. 

"Biddle,  Ins.  §§  116,  121;  Eastern  R.  Co.  v.  Relief  Fire  Ins.  Co., 
105  Mass.  570;  Post  v.  Aetna  Ins.  Co.,  43  Barb.  (N.  Y.)  351;  Con- 
tinental Ins.  Co.  V.  Ruckman,  127  111.  364;  Manhattan  Fire  Ins.  Co. 
V.  Weill  Ullman,  28  Grat.  (Va.)  389;  Pitney  v.  Glen's  Falls  Ins.  Co., 
65  N.  Y.  6;   Harding  v.  Norwich  Union  F.  Ins.  Soc,  10  S.  D.  64,  71 


184:  AGENTS.  §  86 

ance  company  doing  business  in  Canada  will  be  deemed  to  be 
possessed  of  all  tbe  powers  of  an  agent  at  the  head  office  of  the 
company.^^  Whatever  he  does  and  says  in  soliciting,  issuing 
and  delivering  policies  and  collecting  premiums  has  the  same 
effect  as  if  done  by  the  company  itseK,  even  though  it  may 
be  contrary  to  his  special  instructions  of  which  the  other  party 
had  no  notice.^^  Thus  a  policy  issued  upon  subject  matter 
beyond  the  territory  in  which  a  general  agent  is  authorized 
to  act,  is  valid  unless  the  want  of  authority  is  brought  home 
to  the  insured.^**  And  a  general  agent  may,  in  the  absence 
of  a  known  restriction  upon  his  authority,  bind  his  principal 
by  delivering  a  policy  without  requiring  payment  of  the  pre- 
mium, notwithstanding  that  the  application  signed  by  the 
insured  provided  that  the  policy  should  not  be  binding  upon 
the  company  imtil  the  cash  premium  was  received  by  it  or  its 
agent  during  the  lifetime  of  the  person  assured.^  ^  He  has 
authority  to  adjust  and  settle  losses  and  waive  proofs  of 
loss;^^  and  to  bind  his  principal  by  a  contract  of  employment 
for  the  solicitation  of  risks,  unless  the  person  employed  had 

N.  W,  755;  Planters'  Mut.  Ins.  Co.  v.  Rowland,  66  Md.  236.  But  see 
Gore  V.  Canada  Life  Assur.  Co..  119  Mich.  136,  77  N.  W.  650. 

^  Campbell  v.  National  Life  Ins.  Co.,  24  Up.  Can.  C.  P.  133. 

«' Fireman's  Fund  Ins.  Co.  v.  Norwood  (C.  C.  A.),  69  Fed.  71; 
Story,  Agency,  §§  18,  126  et  seq.;  Biddle,  Ins.  §§  116-121;  Ruggles  v. 
American  Cent.  Ins.  Co..  114  N.  Y.  421;  Georgia  Home  Ins.  Co.  v. 
Kinnier's  Adm'x,  28  Grat.  (Va.)  88.  Post,  "Collection  of  Premi- 
ums." 

"^Lightbody  v.  North  American  Ins.  Co.,  23  Wend.  (N.  Y.)  18. 

^'Southern  Life  Ins.  Co.  v.  Booker,  9  Heisk.  (Tenn.)  606;  Cole  v. 
Union  Cent.  Ins.  Co.  (Wash.),  60  Pac.  68,  47  L.  R.  A.  204,  But  see 
post,  notes  268  et  seq. 

«' Little  V.  Phoenix  Ins.  Co.,  123  Mass.  380;  Travelers'  Ins.  Co.  v. 
Harvey,  82  Va.  949;  German  Ins.  Co.  v.  Gray,  43  Kan.  497;  Swain  v. 
Agricultural  Ins.  Co.,  37  Minn.  390.  Post,  "Waiver  of  Proofs  of 
Loss." 


•§  86  GENERAL   AGENTS. 


185 


notice  of  private  restrictions  upon  tlie  agent's  aiithority.^-"^  A 
statement  by  a  general  agent  of  a  corporation  in  the  course 
•of  his  employment  as  to  a  fact  within  his  oflficial  knowledge, 
touching  the  status  of  a  mattei'  intrusted  to  him  is  admissible 
in  evidence  on  behalf  of  the  party  with  whom  the  corporation 
was  dealing  at  the  time.*^^  He  may  orally  consent  to  contem- 
porary insurance  on  the  property  in  another  company,  not- 
withstanding a  prohibition  in  the  policy  against  taking 
:additional  insurance  without  written  consent  indorsed  on  the 
policy.  He  can  dispense  with  a  condition  orally  thougli  the 
policy  requires  it  to  be  in  writing.^^  And  may  waive  a 
condition  inserted  in  the  policy  issued  by  his  company.^*^  He 
has  authority  to  demand  an  appraisement  and  may  waive  the 
same  after  it  has  been  made;'''^  but  he  cannot  bind  the  com- 
pany by  an  agreement  to  receive  a  less  premium  that  that  fixed 
by  the  policy.^* 

An  insurance  company  is  bound  by  the  knowledge  of  its 
general  agent  concerning  the  title  to  the  insured  property  and 
by  his  act  in  issuing  a  policy  thereon  without  a  written  appli- 

»' Equitable  Life  Assur.  Co.  v.  Brobst,  18  Neb.  526.  Post,  "Sub- 
agents." 

"  Agricultural  Ins.  Co.  v.  Potts,  55  N.  J.  Law,  158,  39  Am.  St.  Rep. 
637;   ante,  note  77. 

"^^  Coles  V.  Jefferson  Ins.  Co..  41  W.  Va.  261,  23  S.  E.  732;  Gold- 
■water  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  39  Hun  (N.  Y.),  176; 
Steen  v.  Niagara  Fire  Ins.  Co.,  89  N.  Y.  315.  Can  waive  method  of 
waiver  and  binds  company  by  his  construction.  Carrigan  v.  Lycom- 
ing Fire  Ins.  Co..  52  Vt.  418. 

••Kruger  v.  Western  F.  &  M.  Ins.  Co.,  72  Cal.  91,  1  Am.  St.  Rep. 
42;  Imperial  Fire  Ins.  Co.  v.  Dunham,  117  Pa.  St.  460,  2  Am.  St. 
Rep.  686.    Post,  note  198. 

"  Northern  Assur.  Co.  v.  Samuels,  11  Tex.  Civ.  App.  417,  33  S.  W. 
239. 

'^  Brown  v.  Massachusetts  Mut.  Life  Ins.  Co..  59  N.  H.  298,  47  Am. 
Rep.  205.    Post,  notes  259-270. 


186  AGENTS.  §  86 

cation  ;^^  and  Is  chargeable  ■^■itli  the  knowledge  of  its  general 
agent  concerning  the  custom  of  receiving  premiums  after 
tliej  become  due.^°°  Notice  to  a  general  agent  of  an  insurer, 
of  a  sale,  or  conveyance,  or  change  of  possession  of  property 
insured,  and  a  waiver  by  him  of  the  condition  of  the  policy 
of  the  company  against  it,  bind  the  company. ^''^ 

Power  of  General  Agent  to  Institute  Civil  or  Criminal  Pro- 
ceedings. 

The  institution  of  civil  proceedings  to  collect  money  due  his 
principal  is  within  the  scope  of  the  agency  of  a  general  agent 
of  an  insurance  company ;  but  it  is  more  than  doubtful  whether 
the  institution  of  criminal  proceedings  on  behalf  of  his  prin- 
cipal against  embezzling  sub-agents,  employed  by  the  general 
agent  and  personally  liable  to  him,  would  under  any  circum- 
stances be  within  the  scope  of  his  agency.  An  insurance  com- 
pany is  not  liable  for  the  torts  of  its  general  agent  in  the  course 
of  and  within  the  scope  of  his  agency,  Avithout  its  participa- 
tion, ratification  or  direct  authority,  when  the  tortious  act  was 
committed  for  a  purpose  at  least  partially  personal  to  the 
agent. ^'^^  But  in  Michigan  it  was  held  that  a  general  agent 
for  a  district  embracing  several  states  had  such  authority  in 
any  one  of  them,  though  his  office  be  in  another,  as  will  make 
his  principal  liable  for  a  malicious  prosecution  in  its  name 
with  his  connivance  in  either  state.  ^^^ 

■"•  Liverpool  &  L.  &  G.  Ins.  Co.  v.  Ende,  65  Tex.  118. 

^•^  Phoenix  Mut.  Life  Ins.  Co.  v.  Hinesley,  75  Ind.  1;  Union  Mut. 
Ins.  Co.  V.  Wilkinson,  13  Wall.  (U.  S.)  222;  Miller  v.  Mutual  Ben. 
Life  Ins.  Co.,  31  Iowa,  216. 

"'Planters'  Mut.  Ins.  Co.  v.  Rowland,  66  Md.  236;  Millville  Mut. 
M.  &  F.  Ins.  Co.  V.  Mechanics'  &  W.  B.  &  L.  Ass'n,  43  N.  J.  Law, 
652. 

"-Larson  v.  Fidelity  Mut.  Life  Ass'n,  71  Minn.  101,  73  N.  W. 
711;  Norman  v.  Insurance  Co.  of  North  America  (111.),  4  Ins.  Law  J. 
827. 

"■''Turner  v.  Phcenix  Ins.  Co.,  55  Mich.  236,  21  N.  W.  326. 


§  87  OFFICERS    OF   INSURER    AS    AGENTS.  187 

Acts  Not  Within  Scope  of  Power  of  General  Agent— Illustra- 
tions. 

General  authority  given  an  agent  to  issue  policies  and  con- 
tracts of  reinsurance  throughout  the  country  in  cases  where  a 
Lloyd's  Association  has  a  similar  amount  of  insurance  on  the 
same  risk,  does  not  include  authority  to  reinsure  a  Lloyd's 
Association  of  which  he  is  the  general  attorney,  against  one 
half  of  a  risk  which  the  latter  has  outstanding. ^^^  When  an 
insurance  company  rejects  an  application  after  part  of  the 
premium  has  been  paid  to  one  of  its  general  agents,  and  the 
agent  by  arrangement  with  the  applicant  retains  the  premium 
note  given,  and  the  cash  paid,  and  attempts  to  induce  the 
company  to  reconsider  its  action,  the  company  is  not  liable  for 
loss  occurring  after  it  had  rejected  the  application.^*'^  An 
insurance  company  is  not  liable  for  advertising  bills  con- 
tracted by  its  general  agent  without  special  authority  in  the 
absence  of  a  custom  giving  him  power  to  contract  such  debts 
on  behalf  of  his  principal. ^^^ 

Officers  of  Insurer  as  Agents. 

§  87.  The  oflacers  of  an  insurance  company  are  its  agents,  and 
are  governed  by  the  rules  applicable  to  other  agents. 

Since  a  corporation  must  perform  all  its  acts  through  its 
officers  primarily  and  the  agents  appointed  by  them,  it  fol- 
lows that  in  the  sum  total  of  the  powers  of  the  officers  must  be 
found  the  authority  to  discharge  all  the  corporate  functions. 
The  powers  of  the  different  officers  are  fixed  by  the  provisions 
of  the  charter  or  articles  of  incorporation  and  the  constitution 
and  by-laws  togetlier  with  the  statutory  enactments  of  the  place 
of  incorporation  and  of  the  lex  loci  contractus.     It  is  ele- 

*"*  Timberlake  v.  Beardsley,  22  App.  Div.  (N.  Y.)   439. 

•"■■'  Otterbein  v.  Iowa  State  Ins.  Co.,  57  Iowa,  274. 

•"»  United  States  Life  Ins.  Co.  v.  Advance  Co.,  80  111.  549. 


188  AGENTS.  §  88 

mental  that  everyone  is  lield  to  know  the  statutory  and  written 
law  regulating  the  acts  of  the  corporation  and  its  agents.  The 
authority  of  an  officer  to  bind  an  insurer  must  be  shown  by 
the  party  asserting  it.-^*^'''  And  an  insurance  company  is  not 
bound  by  notice  coming  to  the  knowledge  of  its  president 
unless  he  is  shown  to  have  authority  to  act  for  it  in  the  prem- 
ises. ■'"^  The  power  to  represent  absent  members  and  vote 
in  their  behalf,  expressly  conferred  upon  the  board  of  di- 
rectors, involves  the  exercise  of  discretion,  and  cannot  be 
delegated  except  under  express  grant  of  authority. ^°^ 

Same  —  Acts,  Admissions,  and  Declarations. 

§  88.  The  acts,  admissions,  declarations  and  representations 
of  an  officer  acting  within  the  scope  of  his  authority  bind  the 
company. 

Admissions  made  by  the  treasurer  and  secretary  within  the 
scope  of  their  authority  bind  the  company  as  do  all  repre- 
sentations made  by  them.^^°  The  knowledge  of  the  president 
binds  the  company  if  received  within  the  line  of  his  duty,^^^ 
and  representations  made  by  the  cashier  of  an  insurer, ^^^  and 
the  admissions  of  the  president  or  manager  ;^^^  but  hearsay 
information  received  by  an  officer  of  a  company  upon  or  con- 
cerning matters  not  within  the  scope  of  his  powers  and  duties, 

^"^  Ante,  §§  69-72. 

^°' Home  Insurance  &  Banking  Co.  v.  Lewis,  48  Tex.  622;  Tripp 
V.  Northwestern  Live  Stock  Ins.  Co.,  91  Iowa,  278,  59  N.  W.  1. 

'•^  Farmers'  Loan  &  Trust  Co.  v.  Aberle,  18  Misc.  Rep.  257,  41  N.  Y. 
Supp.  638. 

"°  First  Baptist  Church  v.  Brooklyn  Fire  Ins.  Co.,  18  Barb. 
(N.  Y.)  69:  Cotton  States  Life  Ins.  Co.  v.  Edwards,  74  Ga.  220; 
Muhleman  v.  National  Ins.  Co.,  6  W.  Va.  508;  ante,  note  77. 

"^  Home  Insurance  &  Banking  Co.  v.  Lewis,  48  Tex.  622. 

"-Knauer  v.  Globe  Mut.  Life  Ins.  Co..  16  Jones  &  S.  (N.  Y.)  454; 
Abraham  v.  North  German  Ins.  Co.,  40  Fed.  717. 

"' Schreiber  v.  German- American  Hail  Ins.  Co.,  43  Minn.  367; 
Eartlett  v.  Fireman's  Fund  Ins.  Co.,  77  Iowa,  155,  41  N.  W.  601. 


§  88  ACTS,  ADMISSIONS,  AND    DECLARATIONS.  189 

does  not  bind  the  company. ^^^  Where  the  secretary  and 
agent  of  the  insurer  with  full  knowledge  of  the  premises,  and 
without  inquiring  of  the  insured,  put  a  value  upon  the  prem- 
ises insured  the  company  cannot  complain  of  misrepresenta- 
tions as  to  the  value. -^^^  The  officers  of  an  insurance  company 
in  Indiana,  not  authorized  to  do  business  in  Illinois,  in  re- 
ceiving by  mail  an  application  from  a  person  in  Illinois  for 
insurance  in  property  there  situated,  issuing  a  policy  thereon 
and  sending  it  to  Illinois,  are  chargeable  with  knowledge  that 
they  are  participating  in  an  act  to  be  consummated  by  agents 
in  Illinois  forbidden  by  the  laws  of  the  latter  state.  Their 
knowledge  is  that  of  the  company. ^^^  The  requirements  of  a 
policy  as  to  proofs  of  loss  may  be  waived  by  a  letter  written 
by  the  secretary  at  the  office  of  the  company,  as  a  reply  of  the 
company  to  a  notice  of  loss,  notwithstanding  a  provision  of 
the  policy  that  no  officer,  agent  or  representative  can  waive 
any  condition  except  by  a  writing  indorsed  on  the  policy. 
Such  provisions  do  not  apply  to  the  company  itself.  ^^^  The 
secretary  of  an  insurance  company  may  bind  it  by  waiving 
the  provisions  of  a  policy,  which  gives  it  sixty  days  after 
proofs  of  loss  have  been  made  in  which  to  pay.^^^  The  acts 
of  the  president  and  secretary  performed  in  the  office  of  the 
company  within  the  scope  of  their  apparent  power,  whether 
they  are  written  or  verbal,  whether  they  make  a  contract, 
waive  a  forfeiture  or  give  consent,  bind  the  company. ^^^     The 

"*  Supreme  Council  of  A.  L.  H.  v.  Green,  71  Md.  263,  17  Am.  St. 
Rep.  527. 

"°  Redford  v.  Mutual  Fire  Ins.  Co..  38  Up.  Can.  Q.  B.  538. 

"•  Indiana  Millers'  Mut.  Fire  Ins.  Co.  v.  People,  65  111.  App.  355. 

'"  Powers  V,  New  England  Fire  Ins.  Co.,  68  Vt.  390. 

"'  Farmers'  Mut.  Fire  Ins.  Co.  v.  Ensminger,  12  Wkly.  Notes  Cas. 
(Pa.)  9;  Georgia  Home  Ins.  Co.  v.  Jacobs,  56  Tex.  366. 

""Hartford  Life  &  Annuity  Ins.  Co.  v.  Eastman,  54  Neb.  90,  74 
N.  W.  394;   Dilleber  v.  Knickerbocker  Life  Ins.  Co.,  76  N.  Y.  567; 


190  AGENTS.  §  89 

financial  collector  of  a  local  order  of  a  mutual  benefit  society 
may  extend  the  time  in  which  members  may  pay  their  assess- 
ments, especially  where  his  action  is  suj)ported  by  a  custom 
of  doing  so  without  objection. ^^"^  A  mutual  company  is 
bound  by  the  action  of  its  secretary  in  giving  notice  to  a 
policy-holder.  ^^^ 

SUBOEDINATE  LoDGES, 

§  89.  Subordinate  lodges  are  usually  agents  of  their  grand 
lodge. 

In  a  mutual  benefit  life  insm'ance  company,  the  fact  of 
membership  carries  with  it  the  obligations  derived  from-  the 
rules  of  the  society  as  well  as  the  obligations  imposed  by  the 
general  laws  of  insurance.  A  member  is  presumed  to  know 
and  is  bound  by  such  rules  and  laws.  Subordinate  lodges 
cannot  by  the  mere  assumption  of  authority  invest  themselves 
with  j)owers  which  they  do  not  possess;  nor  will  either  an 
applicant  for  membership,  or  a  member,  be  heard  to  assert 
in  such  subordinate  lodges  power  or  authority  especially  re- 
served in  the  constitution  or  by-laws  to  a  superior  lodge, 
except  in  cases  Avhere  custom  or  usage  has  established  the 
right  of  the  subordinate  lodge  to  exercise  such  power  and 
authority  in  the  place  of  or  on  behalf  of  the  superior  body. 
The  mere  statement  in  the  constitution  or  by-laws  of  a  mutual 
organization  composed  of  subordinate  lodges  and  a  grand 
lodge  that  the  former  are  the  agents  of  their  members,  and  not 
the  agents  of  the  latter  body,  will  not  prevail  over  the  legal 
effect  of  the  actual  status  of  the  bodies  toward  each  other  as 
established  by  their  general  business  transactions  and  rela- 

First  Baptist  Church  v.  Brooklyn  Fire  Ins.  Co.,  19  N.  Y.  305;  Marcus 
V.  St.  Louis  Mut.  Life  Ins.  Co..  68  N  Y.  625. 

"•'Whiteside  v.  Supreme  Conclave  I.  O.  H.,  82  Fed.  275. 

"•Olmstead  v.  Farmers'  Mutual  Fire  Ins.  Co.,  50  Mich.  200. 


§  89  SUBOEDINATE    LODGES. 


191 


tions.^^^  A  mutual  benefit  organization  whose  by-laws  pro- 
vide that  all  applications  for  membership  approved  bv  tlic 
local  lodge  and  its  medical  examiner  shall  be  forwarded  to  the 
grand  officers  of  the  order  for  approval,  and  that  the  order 
shall  not  be  bound  until  a  certificate  be  issued  and  signed  by 
the  grand  president  and  grand  secretary,  is  not  liable  upon  the 
death  of  a  person  to  whom  such  certificate  had  not  is- 
sued, although  he  had  been  initiated  into  the  order  and  paid 
the  required  dues  and  assessments,  and  the  local  lodge  had 
failed  to  promptly  forward  his  application;^"-^  but  otherwise 
if  the  certificate  had  been  delivered  to  the  subordinate  lodge 
Avhich  neglected  to  deliver  it  to  the  member  J  ^^  A  certificate 
of  insurance  in  a  mutual  order  will  not  be  forfeited  for  a 
cause  known  to  the  subordinate  lodge  to  which  a  member 
belonged,  where  such  subordinate  lodge  thereafter,  with  full 
knowledge,  continued  to  treat  the  insurance  as  in  full  force, 
receiving  the  member's  dues  and  paying  the  money  over  to 
the  supreme  lodge.  ^^^  The  concealment  by  the  officers  of  a 
subordinate  lodge  of  the  falsity  of  the  answers  of  an  applicant 

'"^  Lorscher  v.  Supreme  Lodge,  K.  of  H.,  72  Mich.  316,  2  L.  R.  A. 
206;  Holland  v.  Taylor,  111  Ind.  122;  Protection  Life  Ins.  Co.  v. 
Foote,  79  111.  361;  Young  v.  Grand  Council  A.  O.  A.,  63  Minn.  506; 
Austerlitz  v.  Order  of  Chosen  Friends,  14  Nat.  Corp.  Rev.  630 
(1897);  Whiteside  v.  Supreme  Conclave  I.  O.  H.,  82  Fed.  275;  Clark 
v.  Mutual  Reserve  Fund  Life  Ass'n,  14  App.  (D.  C.)  154,  43  L.  R. 
A.  390;  Sovereign  Camp,  W.  of  W.,  v.  Rothschild,  15  Tex.  Civ.  App. 
463,  40  S.  AV.  553. 

'^^  Misselhorn  v.  Mutual  Reserve  Fund  Life  Ass'n,  30  Fed.  545; 
Kohen  v.  Mutual  Reserve  Fund  Life  Ass'n,  28  Fed.  705;  Kendall  v. 
Pacific  Mut.  Life  Ins.  Co.,  10  U.  S.  App.  256,  51  Fed.  689;  Mutual 
Life  Ins.  Co.  v.  Young's  Adm'r,  23  Wall.  (U.  S.)  85,  23  L.  Ed.  152; 
Elder  v.  Grand  Lodge  A.  O.  U.  Wi  (Minn.),  82  N.  W.  987;  Home 
Forum  Ben.  Order  v.  Jones,  5  Okla.  598,  50  Pac.  165. 

"*  Lorscher  v.  Supreme  Lodge  K.  of  H.,  72  Mich.  316,  2  L.  R.  A. 
206. 

""  High  Court  I.  O.  F.  v.  Schweitzer.  171  111.  325,  49  N.  E.  506. 


192  AGENTS.  §  90 

for  membership,  cannot  be  charged  to  the  applicant  unless  he 
requested  the  same.^^^  The  failure  of  the  secretary  of  a  local 
subordinate  branch  or  section  to  transmit  to  the  general  board 
of  control,  within  the  time  specified  by  the  general  law  of  an 
order,  moneys  paid  to  him  in  due  time  by  a  member,  will  not 
be  ground  for  forfeiture  of  the  policy  of  such  member,  since 
the  secretary's  negligence  is  not  chargeable  to  the  member, 
but  is  that  of  an  agent  of  the  order,  noj;withstanding  a  pro- 
vision in  the  general  laws  of  the  order  to  the  effect  that  he  is 
to  be  regarded  as  an  agent  of  the  member,  and  not  of  the  order, 
where  the  general  laws  also  require  the  member  to  pay  dues  to 
such  secretary  only,  and  provide  that  the  secretary  shall  trans- 
mit immediately  after  the  10th  of  each  month  all  moneys 
collected  by  him,  and  that  the  local  branch  shall  be  responsible 
to  the  board  of  control  for  all  such  moneys  collected  by  the 
secretary.  ^^'^ 

Special  or  Local  Agents. 

§  90.  Special  or  local  agents  of  insurance  companies  have 
only  limited  powers  within  limited  territory,  except  when 
particular  power  is  granted  to  them  to  act  in  certain  matters. 

The-  terms  "local"  and  "special"  agents  are  often  used 
interchangeably  in  speaking  of  the  agents,  other  than  gen- 
eral, of  an  insurance  company.  Properly  spealdng,  a  special 
agent    is    one    appointed    for    a    particular    purpose,    and 

"« Knights  of  Pythias  of  the  World  v.  Bridges,  15  Tex,  Civ.  App. 
196,  39  S.  W.  333. 

""•Supreme  Lodge 'k.  P.  v.  Withers,  177  U.  S.  260,  20  Sup.  Ct. 
612.  But  see  Nassauer  v.  Susquehanna  M.  F.  Ins.  Co.,  109  Pa.  St. 
509;  Eilenberger  v.  Protective  M.  F.  Ins.  Co.,  89  Pa.  St.  464;  Lycom- 
ing Fire  Ins.  Co.  v.  Ward.  90  111.  545;  Indiana  Ins.  Co.  v.  Hartwell, 
100  Ind.  566;  North  B.  &  M.  Ins.  Co.  v.  Crutchfield,  108  Ind.  518; 
Whiteside  v.  Supreme  Conclave  I.  O.  H.,  82  Fed.  275;  Campbell  v. 
Supreme  Lodge  K.  P.  of  W.,  168  Mass.  397,  47  N.  E.  109. 


§  90  SPECIAL   OR    LOCAL    AGENTS.  193 

a  local  agent  is  one  of  limited  powers  within  a  given  and 
confined  geographical  area.  To  this  class  belong  solicitors, 
brokers,  medical  examiners,  agents  to  accept  service  of  process, 
adjusters,  appraisers,  sub-agents  and  officers  of  insurance  com- 
panies, except  in  cases  where  general  or  specific  authority  is 
granted  by  the  charter,  by-laws,  conditions  of  policy,  statutes, 
or  necessities  of  the  case.  The  acts,  knowledge  and  represen- 
tations of  such  agents  witliin  the  scope  of  their  authority  bind 
their  principal.  The  term  "local"  -agent  conveys  no  other 
meaning  than  that  of  an  agent  at  a  particular  place  or  locality, 
but  whether  such  agent  has  general  or  limited  powers  is  not 
determined  by  simply  calling  him  a  local  agent.  The  agents 
of  insurance  companies  are  scattered  through  the  states  in 
thousands.  There  are  not  only  local  agents  appointed  in 
every  city  and  village,  but  also  so-called  general  agents,  who 
have  charge  of  a  large  territory,  and  whose  powers  are  usually 
much  greater  than  those  of  a  local  agent.  The  actual  powers 
of  both  classes  of  agents  may  be  different  from  their  apparent 
powers.  It  is  essential  to  remember  that  so  long  as  the  agent 
acts  within  the  apparent  scope  of  his  authority,  the  principal 
is  bound  by  his  acts,  though  they  may  be  in  excess  of  or  viola- 
tive of  his  authority.  ^^^ 

A  special  agency  properly  exists  where  there  is  a  delegation 
of  authority  to  do  a  single  act  or  particular  acts ;  in  contra- 
distinction to  a  general  agency,  where  there  is  a  delegation  of 
power  to  do  all  the  acts  connected  with  a  particular  trade, 
business  or  employment.  The  authority  of  the  agent  must 
be  deterpiined  by  the  nature  of  the  business  and  the  apparent 

'=*  Southern  Life  Ins.  Co.  v.  Booker,  9  Heisk.  (Tenn.)  607;  Bohen 
V.  Williamsburgh  City  Ins.  Co.,  35  N.  Y.  131;  Markey  v.  Mutual  Ben. 
Life  Ins.  Co..  103  Mass.  78;  Bodine  v.  Exchange  Fire  Ins.  Co.,  51 
N.  Y.  117;  Eclectic  Lifa  Ins.  Co.  v.  Fahrenkrug,  68  111.  463;  Warner 
V.  Peoria  M.  &  F.  Ins.  Co..  14  Wis.  345. 

KERR,  INS.— 13 


194  AGENTS.  §  90 

scope  of  liis  employment  therein.  It  cannot  be  narrowed  by 
priyate  or  imdisclosed  instructions  unless  there  is  something 
in  the  nature  of  the  business  or  the  circumstances  of  the  case 
to  indicate  that  the  agent  is  acting  under  special  instructions 
or  limited  powers.  ■^^'^ 

The  ordinary  and  usual  powers  of  local  agents  are  to  solicit 
insurance,  fix  rates,  issue  policies,  and  collect  premiums. 
They  may,  in  many  cases,  bind  the  principal  by  their  acts  in 
issuing  policies  with  knowledge  of  facts  violating  the  condi- 
tions of  the  policy,  by  giving  credit  for  premium,  and  by 
other  acts  generally  done  by  them  in  the  usual  course  of  busi- 
ness. But  whatever  incidental  powers  local  or  special  agents 
authorized  to  accept  applications  for  insurance,  fix  premiums, 
and  issue  policies,  may  have  in  connexion  with  the  issuance 
and  conditions  of  a  policy,  or  while  the  property  insured  is  in 
existence,  cease  when  the  subject  of  the  risk  is  destroyed; 
and,  when  a  claim  of  loss  is  asserted,  the  proceedings  to  estab- 
lish and  enforce  such  claim  are  not  impliedly  within  the  scope 
of  such  an  agency. -^^^  AVhere  an  agent's  authority  expressly 
excluded  the  power  to  insure  manufactories,  and  other  special 
hazards,  the  mere  circumstance  that  he  had  acted  as  local 
agent  of  the  company  was  not  equivalent  to  a  declaration  by  it 
of  authority  in  him  to  insure  every  kind  of  property  and  to 
exercise  unlimited  power.  The  proper  inference  would  be 
that  he  had  such  powers  only  as  were  conferred  by  his  com- 
mission, and  could  only  insure  in  the  mode  required  by  the 
company's  charter,  in  the  absence  of  a  custom  or  course  of 
dealing  to  the  contrary. ^^^  If  the  powers  of  an  agent  of  a 
mutual  company  are  limited  to  taking  insurance,  receiving 

'=°  Bliss,  Life  Ins.  §§  277,  281  et  seq.;   cases  supra. 
""  Ermentrout  v.  Glrard  F.  &  M.  Ins.  Co.,  63  Minn.  307,  30  L.  R. 
A.  246. 

"^  Reynolds  v.  Continental  Ins.  Co.,  36  Mich.  131. 


§  91  BROKERS   AND    SOLICITORS.  195 

fees  for  the  same,  and  receipting  therefor,  the  fact  tliat  the 
policy  was  obtained  by  him,  raises  no  legal  presumption  that 
he  was  authorized  to  receive  assessments  subsequently 
made.^^^  And  one  employed  as  a  clerk  or  agent  to  solicit 
insurance  and  renewals  of  policies,  and  ^^ithout  any  authority, 
except  such  as  might  arise  from  the  course  and  nature  of  his 
employment,  is  not  authorized  to  waive  the  payment  of  a  pre- 
mium on  a  contract  for  a  renewal. -^^^ 

Brokers  and  Solicitors. 

§  91.  Whether  an  insurance  broker  or  an  insurance  solicitor 
is  the  agent  of  the  insurer  or  of  the  insured  must  be  deter- 
mined from  the  facts  and  circumstances  of  each  case.  This 
rule  is  subject  to  the  statutory  regulations  before  mentioned. 

The  business  of  a  broker  is  to  serve  as  a  connecting  link  be- 
tween the  party  who  is  to  be  insured  and  the  party  who  is  to 
do  the  insuring,— to  bring  about  the  meeting  of  their  minds 
which  is  necessary  to  the  consummation  of  the  contract.  In 
the  discharge  of  his  business  he  is  the  representative  of  both 
parties  to  a  certain  extent. 

The  relation  of  a  broker  or  a  solicitor  to  insurer  and  in- 
sured, and  whether  he  is  the  agent  of  the  one  party  or  the  other 
in  a  given  case,  must  depend  on  the  facts  and  the  circumstan- 
ces of  that  case.  The  broker  or  the  solicitor  may  be  the  agent 
of  either  party  to  the  contract,  or  he  may  be  the  agent  of  each 
party  for  certain  purposes.  Thus  he  may  be  the  agent  of  the 
insured  in  making  the  application  and  representations  as  to 
llie  property,  and  the  agent  of  the  insurer  to  deliver  the 
policy  and  collect  the  premium.  In  any  case  he  represents 
his  principal  within  the  scope  of  his  authority  and  binds  his 
principal  by  his  acts,  knowledge  and  representations  within 
the  scope  of  such  authority.     A  solicitor  is  one  who  solicits  in- 

"-  Crawford  County  Mut.  Ins.  Co.  v.  Cochran,  88  Pa.  St.  230. 
"=  Hambleton  v.  Home  Ins.  Co.,  6  Biss.  91,  Fed.  Cas.  No.  5,972. 


196  AGENTS.  §  91 

surance  either  witli  or  witliout  precedent  autliority  from  an 
insurer.  A  broker  is  one  who  procures  insurance,  and  ne- 
gotiates between  the  insurer  and  the  insured.  In  the 
absence  of  previous  authority  to  represent  an  insurer,  solici- 
tors and  brokers  are  ordinarily  agents  of  the  insurer  for  the 
purpose  only  of  collecting  the  premium  and  delivering  the 
ix)licy.  In  other  respects  they  are  agents  of  the  insured;  ^^'^ 
and  their  powers  as  agents  of  the  insurer  end  when  the  policy 
is  delivered.  ^^^  One  soliciting  insurance  and  taking  the  ap- 
plication, will,  in  the  absence  of  notice  to  the  contrary,  be 
held  the  agent  of  the  company  which  accepts  the  application,, 
issues  the  policy,  and  retains  the  premium.  And  the  issuance 
of  the  policy  under  such  circumstances  estops  the  insurer  to- 
deny  his  agency. -^^^  But  the  solicitor  may  properly  be  held 
the  agent  of  the  applicant  for  the  purpose  of  holding  a  pre- 
mium note  in  escrow  until  the  maker  satisfies  himself  as  to 
the  conditions  of  the  contract. ^^'^  Domat  thus  defines  his 
functions :     "The  engagement  of  a  broker  is  like  to  that  of  a. 


"^Arff  V.  Star  Fire  Ins.  Co.,  125  N.  Y.  57;  Union  Ins.  Co,  v,  Chipp, 
93  111.  96;  East  Texas  Fire  Ins.  Co.  v.  Brown,  82  Tex.  631;  Security 
Ins.  Co.  V.  Mette,  27  111.  App.  324;  Allen  v.  German  American  Ins. 
Co.,  123  N.  Y.  6;  2  Am.  &  Eng.  Enc.  Law  (1st  Ed.),  595;  Gude  v. 
Exchange  Fire  Ins.  Co.,  53  Minn.  220.  In  Bernheimer  v.  City  of 
Leadville,  14  Colo.  518,  24  Pac.  332,  is  found  a  discussion  as  to  who 
are  brokers,  and  what  insurance  agents  come  within  the  terms  of 
an  ordinance  providing  for  the  payment  of  license  fees  by  insurance 
brokers.  See,  also,  Fromherz  v.  Yankton  Fire  Ins.  Co.,  7  S.  D.  187, 
63  N.  W.  784;  Wilber  v.  Williamsburg  City  Fire  Ins.  Co.,  122  N.  Y.. 
439;  Wood  v.  Firemen's  Fire  Ins.  Co.,  126  Mass.  316;  Newark  Fire 
Ins.  Co.  V.  Sammons.  110  111.  166. 

"'Linderv.  Fidelity  &  Casualty  Co.,  52  Minn.  304;  Goldin  v. 
Northern  Assur.  Co..  46  Minn.  471. 

""London  &  Lancashire  Fire  Ins.  Co.  v.  Gerteson  (Ky.),  51  S.  W.. 
617. 

"^Mehlin  v.  Mutual  Reserve  Fund  Life  Ass'n  (Ind.  T.),  51  S.  W.. 
1063. 


§  91  BROKERS    AND    SOLICITORS.  197 

proxy,  a  factor,  or  other  agent,  but  with  this  difference,  that 
the  broker  being  employed  by  persons,  who  have  opposite  in- 
terests to  manage,  he  is,  as  it  were,  agent  both  for  the  one  and 
the  other,  to  negotiate  the  commerce  and  affair  in  which  he 
concerns  himself.  Thus  his  engagement  is  two-fold,  and 
consists  in  being  faithful  to  all  the  parties  in  the  execution 
of  what  everyone  of  them  entrusts  him  wnth;  and  his  power 
is  not  to  treat,  but  to  explain  the  intentions  of  both  parties, 
and  to  negotiate  in  such  a  manner  as  to  put  those  who  employ 
him  in  a  condition  to  treat  together  personally."  ^^^  Story 
says  this  statement  of  the  functions  of  a  broker  is  "a  full  and 
exact  description  according  to  the  sense  of  our  law."^^^ 

Brokers  —  Agents  of  Insurer  — Illustrations. 

If  a  broker  acts  on  behalf  of  an  agent  of  an  insurance 
company  and  solicits  insurance  from  parties,  he  is  the  agent 
of  the  company  and  his  knowledge  is  imputed  to  it.  But 
if  the  assured  employs  the  broker  to  place  the  insurance 
for  him,  the  broker  is  the  agent  of  the  assured  and  not  of 
the  insurance  company.  ^^^  In  an  Indiana  case,  an  appli- 
cation for  a  line  of  insurance  was  made  to  an  insurance 
broker  in  Chicago.  He  in  turn  applied  to  a  firm  of  insur- 
ance brokers  also  in  Chicago  to  place  a  portion  of  the  insur- 
ance, no  particular  company  being  designated.  This  firm 
placed  the  insurance  in  part,  and  then  forwarded  to  the 
agent  of  the  defendant  at  Indianapolis  a  copy  of  the  de- 
scription of  the  risk  they  had  received  with  a  blank  fonn 
of  application  for  insurance,  without  mentioning  any  par- 

"''Domat,  Civil  Law  (Strahan's  Translation),  bk.  1,  tit.  17,  art.  1. 

""Story,  Agency  (9th  Ed.),  P-  31,  note  3;  Hooper  v.  People,  155 
U.  S.  648,  15  Sup.  Ct.  207;  How  v.  Union  Mut.  Life  Ins.  Co.,  80 
N.  Y.  32;  Monitor  Mut.  Ins.  Co.  v.  Young,  111  Mass.  537;  Hartford 
Fire  Ins.  Co.  v.  Reynolds.  36  Mich,  502. 

""Mohr  &  Mohr  Di&tilling  Co.  v.  Ohio  Ins.  Co.,  13  Fed.  74. 


19S  AGENTS.  .  §  91 

ticiilar  company.  Defendant  tliroiigli  said  agent  at  Indian- 
apolis, who  was  secretary  of  the  company,  wrote  up  the  policy 
and  forwarded  it  to  the  firm  of  insurance  brokers  who  de- 
livered it  to  the  brokers  from  whom  they  received  the  appli- 
cation and  he  delivered  it  to  the  assured.  The  firm  of 
insurance  brokers  in  this  instance,  as  on  former  occasions, 
Avith  the  knowledge  and  consent  of  defendant  retained  a 
portion  of  the  premium  for  their  services  and  remitted  the 
balance  to  defendant.  The  court  held  the  brokers  were 
agents  of  defendant  to  the  extent  that  it  was  bound  by  their 
knowledge  of  the  premises  insured.^^^  In  another  case  the 
plaintiff  contracted  for  insurance  with  one  who  was  not  an 
agent  of  defendant  nor  of  its  resident  agents.  Such  person 
received  from  plaintiff  the  premium,  which  was  transmitted, 
directly  or  indirectly,  by  him  to  the  company,  and  a  policy 
was  returned  through  him,  and  by  him  delivered  to  plaintiff, 
and  the  court  held  that  whether  defendant,  its  resident 
agents  or  plaintiff,  regarded  such  person  as  the  agent  of  the 
insurer  or  not,  he  was  such  in  the  eye  of  the  law,  notwith- 
standing the  policy  provided  that  "any  party,  other  than  the 
assured,  procuring  the  insurance,  either  at  the  office  of  the 
company  or  its  agents,  shall  be  considered  the  agent  of  the 
insured  and  not  of  this  company. "^"^^  Where  in  pursuance 
of  a  circular  issued  by  an  insurance  company  offering  com- 
missions for  business  procured,  a  broker  applies  for  insur- 
ance on  property  of  another  to  the  general  agent  of  the  com- 
pany, receives  the  policy  and  is  charged  with  the  premium, 
such  broker  is  agent  of  the  company  in  securing  the  insurance, 
notwithstanding  a  provision  of  the  policy  that  if  it  be  pro- 

'«  Indiana  Ins.  Co.  v.  Hartwell,  123  Ind.  177. 

^"  Bassell  v.  American  Fire  Ins.  Co.,  2  Hughes,  531,  Fed.  Cas.  No. 
1,094. 


91  BROKERS    AND    SOLICITORS. 


199 


cured  by  a  broker  liG  shall  be  considered  the  agent  of  the 

insured.  ^'*^ 

Brokers  —  Agents  of  Insured  —  Illustrations. 

In  a  recent  New  York  case,  Peckham,  J.,  says:     "What 
is  understood  under  the  designation  of  an  insurance  broker 
is,  one  who  acts  as  a  middleman  between  the  insured  and  the 
company,  and  who  solicits  insurance  from  the  public  under 
no  employment  from  any  special  company;  but  having  se- 
cured an  order,  he  either  places  the  insurance  with  the  com- 
pany selected  by  the  insurer,  or  in  the  absence  of  any  selec- 
tion by  him,  then  with  the  company  selected  by  such  broker. 
Ordinarily  the  relation  between  the  insured  and  the  broker 
is  that  between  the  principal  and  his  agent,  and  according  to 
Arnould  on  Insurance,   (2d  Ed.  vol.   1,  c.  5,  p.  108),  'the 
business  of  a  policy  broker  would  seem  to  be  limited  to 
receiving  instructions  from  his  principals  as  to  the  nature 
of  the  risk  and  the  rate  of  premium  at  which  he  wishes  to 
insure,  communicating  these  facts  to  the  underwriters,  ef- 
fecting the  policy  with  them  on  the  best  possible  terms  for  his 
employer,   paying  them   the  premium   and   receiving  from 
them  whatever  may  be  due  in  case  of  loss.'  "^''•*     A  broker 
or  solicitor,  if  not  in  any  way  previously  authorized  by  or  con- 
nected with  the  insurer,  is  the  agent  of  the  insured  in  procur- 
ing the  policy  and  in   any   representations  he  may  make 
concerning  the  property.     He  is  only  the  agent  of  the  insurer 
to  deliver  the  policy  and  collect  the  premium. ^^^     If  the 
insured  first  places  in  the  hands  of  an  insurance  broker,  who 

''•  Gaysville  Mfg.  Co.  v.  Phoenix  Mut.  Fire  Ins.  Co.,  67  N.  H.  457, 
3G  Atl.  367. 

•"Arff  V.  Star  Fire  Ins.  Co..  125  N.  Y.  57,  21  Am.  St.  Rep.  721. 

"'Gude  V.  Exchange  Fire  Ins.  Co..  53  Minn.  220;  Fromherz  v. 
Yankton  Fire  Ins.  Co.,  7  S.  D.  187.  63  N.  W.  784;  Rahr  v.  Manchester 
Fire  Assur.  Co..  93  Wis.  355,  67  N.  W.  725;    Wilber  v.  Williams- 


200  AGENTS.  '  §  91 

is  not  tlie  regular  agent  of  a  company,  a  written  application 
for  insurance,  lie  invests  him  with  an  indicium  of  agency 
and  is  bound  bj  statements  he  may  make  in  the  application, 
and  cannot  deny  that  he  was  his  agent. -'^^  Where  the  in- 
sured filled  out  an  application  and  gave  it  to  an  insurance 
agent  with  instructions  to  procure  insurance  in  any  good 
company,  and  such  agent  procured  insurance  on  such  appli- 
cation in  a  company  other  than  his  own,  he  was  held  to  be 
the  agent  of  the  insured.  ■'^'^ 

A  broker  is  not  the  agent  of  the  insurer  in  procuring 
insurance  where,  having  no  authority  from  or  blanks  of  the 
insurer,  he  requests  it  to  write  a  certain  policy,  which  it  does, 
and  for  his  seiwices  allows  him  a  commission  on  the  cash  pre- 
mium received. ^^^  A  broker  in  such  case  and  independently 
of  a  statute  on  the  subject,  is  the  agent  of  the  insured,  and 
his  acts  and  representations  within  his  authority  as  such 
agent  are  binding  upon  the  insured  though  for  some  purposes 
he  may  be  the  agent  for  the  insurer.  In  Wisconsin  he  is  the 
agent  of  one  who  employs  him  to  procure  insurance  in  respect 
to  everything  which  does  not  conflict  with  his  agency  for  the 
insurer  as  declared  by  Rev.  St.  Wis.  §  1977,  providing  that 
whoever  solicits  insurance  on  behalf  of  an  insurance  corpora- 
tion or  property  o^vner  shall  be  held  an  agent  of  such  corpora- 
burgh  City  Fire  Ins.  Co.,  122  N.  Y.  439.  See,  also,  John  R.  Davis 
Lumber  Co.  v.  Hartford  Fire  Ins.  Co..  95  Wis.  226,  70  N.  W,  86. 

'"Fame  Ins.  Co.  v.  Thomas,  10  111.  App.  545;  Kings  County  Fire 
Ins.  Co.  V.  Swigert,  11  111.  App.  590. 

"'Fame  Ins.  Co.  v.  Thomas,  10  111.  App.  545;  Seamans  v.  Knapp- 
Stout  &  Co.  Company,  89  Wis.  171;  How  v.  Union  Mut.  Life  Ins.  Co., 
80  N.  Y.  32. 

•"  Seamans  v.  Knapp-Stout  &  Co.  Company,  89  Wis.  171,  27  L.  R. 
A.  362;  Gude  v.  Exchange  Fire  Ins.  Co.,  53  Minn.  220;  Freedman  v. 
Providence  Wash.  Ins.  Co.,  182  Pa.  St.  64,  37  Atl.  909;  Allen  v.  Ger- 
man American  Ins.  Co.,  123  N.  Y.  6;  Ben  Franklin  Ins.  Co.  -v^ 
Weary,  4  111.  App.  74. 


§  91  BROKERS    AND    SOLICITORS.  201 

lion  to  all  intents  and  purposes,  and  lie  may  bind  the  insured 
in  matters  pertaining  to  the  procurement  of  the  policy.  ■''^^ 
The  loiowledge  of  a  broker  or  mere  soliciting  agent  is  not 
chargeable  to  the  insurer.  ^^^  One  ^vho  at  the  request  of  the 
insured  for  other  insurance  in  lieu  of  a  canceled  policy 
applied  to  another  firm  of  insurance  brokers  and  received 
from  them  a  policy  which  he  delivered  to  the  insured  is  not 
the  agent  of  the  company  issuing  the  last  policy.  ^^^  A 
broker  employed  by  insured  to  procure  a  policy  has  no  im- 
plied authority  to  collect  the  premium  for  the  company 
after  the  delivery  of  the  policy,  although  the  company  in- 
trusted the  policy  to  him  for  delivery.  ^^^  An  agent  or 
T3roker  of  a  fire  insurance  company  having  power  and  author- 
ity to  deliver  a  policy  issued  by  it  and  to  receive  the  premium 
thereon,  has  no  authority  nor  is  it  within  the  apparent  scope 
of  his  authority  to  bind  the  company  by  subsequently  altering 
the  contract  of  insurance  by  the  insertion  of  a  clause  binding 
the  company  to  pay  the  loss  to  one  other  than  the  insured, 
although  such  policy  was  w^ritten  for  the  assured  on  the 
application  of  the  agent.  ^^^ 

Solicitors. 

One  who  on  his  own  behalf  solicits  insurance,  submits 
applications  to  a  company,  and,  if  accepted,  receives  the  pol- 

"'  John  R.  Davis  Lumber  Co.  v.  Hartford  Fire  Ins.  Co.,  95  Wis.  226, 
70  N.  W.  84;  American  Fire  Ins.  Co.  v.  Brooks,  83  Md.  22.  34  Atl. 
373;  Standard  Oil  Co.  v.  Triumph  Ins.  Co.,  3  Hun  (N.  Y.),  591; 
Lange  v.  Lycoming  Fire  Ins.  Co.,  3  Mo.  App.  591;  Blackburn,  Low 
&  Co.  V.  Vigors,  17  Q.  B.  Div.  553. 

""Fromherz  v.  Yankton  Fire  Ins.  Co.,  7  S.  D.  187,  63  N.  W.  784; 
Gude  V.  Exchange  Fire  Ins.  Co.,  53  Minn.  220,  and  cases  in  preced- 
ing notes.  In  an  extreme  case,  Illinois  held  the  contrary.  Union 
Ins.  Co.  V.  Chipp,  93  111.  96. 

^'■'-  State  V.  Johnson,  43  Minn.  350. 

''=  Citizens'  Fire  Ins.  Co.  v.  Swartz,  21  Misc.  Rep.  671,  47  N.  Y. 
.Supp.  1107. 

'"Duluth  Nat.  Bank  v.  Knoxville  Fiie  Ins.  Co.,  85  Tenn.  76. 


202  AGENTS.  §  91 

icy,  and  on  its  delivery  collects  tlie  premium  T\diicli  he  pays, 
over  to  the  company,  receiving  a  commission  thereon,  without 
any  antecedent  authority  to  act  for  such  insurer,  has  not,, 
in  the  absence  of  statutory  provision  or  some  custom  or  mode 
of  transacting  business  on  the  part  of  the  insurer  which  would 
warrant  the  insured  in  believing  him  to  be  invested  with, 
greater  powers,  authority  to  bind  the  company  by  his  oral 
contract  to  insure,  nor  to  consent  to  the  procurement  of 
additional  insurance,  nor  to  waive  any  of  the  terms  or 
conditions  of  the  policy,  nor  does  his  knowledge  bind  the 
company.  Such  an  agent  is  the  representative  of  the  com- 
pany only  for  the  purposes  of  delivering  the  policy  and  col- 
lecting the  premium,  and  when  that  is  done  his  agency 
ceases.  •'^^  But  when  an  insurance  company  appoints  a  solic- 
itor its  agent  to  solicit,  take  and  transmit  to  it  applications  for 
insurance  to  be  by  it  accepted  or  rejected  the  rule  is  reversed^ 
and  the  solicitor  must  be  deemed  the  agent  of  the  company  in 
all  that  he  does  in  preparing  the  application  and  in  any  repre- 
sentation he  may  make  as  to  the  character  or  effect  of  the 
statements  therein  contained ;  and  this  rule  is  not  changed 
by  a  stipulation  in  the  policy  subsequently  issued  that  the 
acts  of  such  agent  in  making  out  the  application  shall  be 
deemed  the  acts  of  the  insured.  ^^^ 


'=^'Gude  V.  Exchange  Fire  Ins.  Co.,  53  Minn.  220;  Goldin  v.  North- 
ern Assur.  Co.,  46  Minn.  471;  People  v.  People's  Ins.  Exchange,  126 
111.  466,  2  L.  R.  A.  340;  Wilkins  v.  State  Ins.  Co.,  43  Minn.  177; 
Northriip  v.  Piza,  43  App.  Div.  284,  60  N.  Y.  Supp.  363. 

'''  Deitz  V.  Providence  Wash.  Ins.  Co.,  31  W.  Va.  851,  33  W.  Va, 
526;  Phoenix  Ins.  Co.  v.  Stark,  120  Ind.  444;  Rogers  v.  Phenix  Ins. 
Co.,  121  Ind.  570;  Niagara  Ins.  Co.  v.  Lee,  73  Tex.  641;  Crouse  v. 
Hartford  Fire  Ins.  Co..  79  Mich.  249;  Southern  Life  Ins.  Co.  v.  Mc- 
Cain, 96  U.  S.  84;  Kister  v.  Lebanon  Mut.  Ins.  Co.,  128  Pa.  St.  558, 
5  L.  R.  A.  646;  Hoose  v.  Prescott  Ins.  Co.,  84  Mich.  309,  11  L.  R.  A, 
340;  Whitney  v.  National  Masonic  Ace.  Ass'n,  57  Minn.  472. 


§  91  BROKEKS    AND    SOLICITORS.  203 

Powers  of  Solicitor  —  Illustrations. 

An  insured  is  cliargeable  with  knowledge  of  the  limitations 
upon  the  powers  of  a  soliciting  agent,  and  that  he  cannot 
bind  the  company  contrary  to  the  provisions  of  the  policy  by 
stating  that  it  will  make  no  difference  where  the  insured 
property  is  situated ;  ^^*^  and  witli  knowledge  that  he  cannot 
consent  to  an  assignment  of  the  policy. ^^^  lie  has  no  au- 
thority to  bind  the  company  by  declarations  as  to  the  validity 
of  the  certificate  or  as  to  the  rights  and  liabilities  of  the 
company,  when  not^made  in  the  discharge  of  his  duty  as 
agent  in  the  transaction  in  question  ;^^^  nor  accept  the  sur- 
render of  a  policy. ^^^  He  cannot  bind  his  principal  by  a 
contract  of  insurance  unless  there  is  proof  of  his  authority ;  ^®^ 
has  no  power  to  construe  an  application  for  insurance  and 
a  premium  note,  nor  to  declare  their  legal  effect  ;^*^^  cannot 
waive  a  forfeiture  of  any  of  the  conditions  of  the  policy  ;^^- 
cannot  consent  to  additional  insurance. ^®^^  An  agent  au- 
thorized to  solicit  and  receive  applications  for  insurance  has 
no  power  to  accept  an  application  and  bind  his  principal  by  a 
statement  made  to  the  applicant  that  the  risk  attached  at  a 
certain  moment. ^"^^  An  agreement  to  procure  a  policy  to  be 
issued,  does  not  create  a  present  liability  against  the  com- 

156  Dryer  v.  Security  Fire  Ins.  Co.,  94  Iowa,  471,  62  N.  W.  798. 

'"  Strickland  v.  Council  Bluffs  Ins.  Co.,  66  Iowa,  466,  23  N.  W.  926. 
But  see  Fitchner  v.  Fidelity  Mut.  Fire  Ass'n  (Iowa),  68  N.  W.  710. 

'■•^  Schoep  V.  Bankers'  Alliance  Ins.  Co.,  104  Iowa,  354,  73  N.  W. 
825. 

^'^  Susquehanna  Mut.  Fire  Ins.  Co.  v.  Swank,  102  Pa.  St.  17. 

'«"  Todd  V.  Piedmont  &  A.  Life  Ins.  Co..  34  La.  Ann.  63. 

'"'  Winchell  v.  Iowa  State  Ins.  Co.,  103  Iowa.  189,  72  N.  W.  503. 

1"  Hansen  v.  Citizens'  Ins.  Co.,  66  Mo.  App.  29;  Torrop  v.  Imperial 
Fire  Ins.  Co.,  26  Can.  Sup.  Ct.  585. 

"-"  Heath  v.  Springfield  Fire  Ins.  Co.,  58  N.  H.  414. 

'"Stockton  V.  Firemen's  Ins.  Co.,  33  La.  Ann.  577;  Summers  v. 
Commercial  Union  Assur.  Co..  6  Can.  Sup.  Ct.  19. 


204:  AGENTS.  §  92 

panj.^*'^  An  iinder^ATiter  is  not  bound  by  notice  of  a  fact 
to  its  solicitor  ;^^^  nor  by  notice  after  the  policy  has  issued, 
to  one  v:ho  effects  insurance  under  no  employment  by  it,  but 
for  a  commission  paid  by  it  to  him  for  such  risks  as  he 
obtains  and  it  chooses  to  accept.  In  such  case  his  agency 
ceases  with  the  delivery  of  the  policy.  ^^® 

Stipulations  in"  Policy  Regulating  Agency. 

§  92.  The  actual  status  of  an  agent  of  the  insurer,  as  to  nxat- 
ters  precedent  to  the  issuance  of  the  policy,  is  not  affected  by 
stipulations  in  the  policy  making  him  the  agent  of  the  insured. 

The  authorities  are  divided  on  this  question,  but  the  above 
rule  is  expressive  of  the  preponderance  of  the  law  on  the  sub- 
ject. And  indeed,  it  seems  most  consonant  with  justice  and 
reason,  that  an  insurer  should  not  be  heard  to  deny  that  it 
is  represented  by  those  whom  it  hires  and  sends  out  as  its 
agents,  or  that  such  agents  have  powers  necessary  to  the 
transaction  of  its  business.  The  true  status  of  an  agent  and 
his  legal  relation  to  both  insurer  and  insured  can  be  better  de- 
termined from  a  consideration  of  his  business  dealings  and 
relations  with  both  parties  than  from  the  terms  of  a  policy. 
of  the  contents  of  which  the  insured  had  no  information  or 
knowledge  until  after  its  delivery.  ^^'^ 

After  the  courts  had  generally  established  this  doctrine, 
€.  g.  that  soliciting  agents  of  insurance  companies  are  agents 
of  insurer  and  not  of  insured,  many  of  the  insurance  com- 
panies, in  order  to  obviate  it,  adopted  the  ingenious  device 

^•'^  Farmers'  &  Merchants'  Ins.  Co.  v.  Graham.  50  Neb.  818.  70 
N.  W.  386. 

""'  Tate  V.  Hyslop,  15  Q.  B.  Div.  268. 

""■Devens  v.  Mechanics'  &  Traders'  Ins.  Co.,  83  N.  Y.  168;  Heath 
y.  Springfield  Fire  Ins.  Co.,  58  N.  H.  414. 

!•'  Ante,  notes  1-6. 


§  92  STIPULATIONS    IN    POLICY    REGULATING    AGENCY.  205 

of  inserting  a  provision  in  tlie  policy  that  the  application, 
by  whomsoever  made,  whether  by  the  agent  of  the  company 
or  any  other  person,  should  be  deemed  the  act  of  the  insured 
and  not  of  the  insurer.  But,  as  has  been  well  remarked,  "A 
device  of  words  cannot  be  imposed  upon  a  court  in  place  of 
an  actuality  of  facts."  The  real  situation  cannot  be  hidden 
in  this  manner.  Such  a  clause  is  no  part  of  a  contract.  It  is 
an  attempt  to  reverse  the  law  of  agency,  and  to  declare  that  a 
party  is  not  bound  by  his  agent's  acts.  Whether  one  is  an 
agent  of  another  is  a  question  of  mixed  law  and  fact,  depend- 
ing on  the  authority  given  expressly  or  impliedly.  And  when 
a  contract  is,  in  fact,  made  through  the  agent  of  a  party, 
the  acts  of  that  agent  in  that  respect  are  binding  on  his  prin- 
cipal. It  w^ould  be  a  stretch  of  legal  principles  to  hold  that 
a  person  dealing  Avith  an  agent,  apparently  clothed  with 
authority  to  act  for  his  principal  in  the  matter  in  hand, 
could  be  affected  by  notice,  given  after  the  negotiations  were 
completed,  that  the  party  with  whom  he  had  dealt  should 
be  deemed  transformed  from  the  agent  of  one  party  into  the 
agent  of  the  other.  To  be  efficacious,  such  notice  should  be 
given  before  the  negotiations  are  completed.  The  application 
precedes  the  policy,  and  the  insured  cannot  be  presumed  to 
know  that  any  such  provision  will  be  inserted  in  the  latter. 
To  hold  that,  by  a  stipulation  unknown  to  the  insured  at  the 
time  he  made  the  application,  and  when  he  relied  upon  the 
fact  that  the  agent  was  acting  for  the  company,  he  could  be 
held  responsible  for  the  mistakes  of  such  agent,  would  be  to 
impose  burdens  upon  the  insured  -ikvhich  he  never  anticipated. 
Hence  if  the  agent  was  the  agent  of  the  company  in  the  matter 
of  making  out  and  receiving  the  application,  he  cannot  be 
converted  into  an  agent  of  the  insured  by  merely  calling  him 
such  in  the  policy  subsequently  issued  ;  nor  is  there  any  differ- 
ence between  stock  and  mutual  insurance  companies  in  this 


206  '  AGENTS.  §  92 

respect.  It  was  formerly  held  in  New  York^^^  that  where 
tlie  insured  had  contracted  that  the  person  who  procured 
the  insurance  should  he  deemed  his  agent,  he  must  be  bound 
by  the  agreement;  but  in  subsequent  cases^^^  tliis  doctrine  was 

'°^»  Rohrbach  v.  Germania  Fire  Ins.  Co.,  62  N.  Y.  47,  20  Am.  Rep. 
451;  Alexander  v.  Germania  Fire  Ins.  Co.,  66  N.  Y,  464. 

'""Whited  V.  Germania  Fire  Ins.  Co.,  76  N.  Y.  415,  32  Am.  Rep. 
330;  Sprague  v.  Holland  Purchase  Ins.  Co.,  69  N.  Y.  128.  In  Pat- 
ridge  V.  Commercial  Fire  Ins.  Co.,  17  Hun  (N.  Y.),  95,  it  was  said  of 
the  agency  clause:  "This  is  a  provision  which  deserves  the  con- 
demnation of  courts,  whenever  it  is  relied  upon  to  work  out  a  fraud, 
as  it  is  in  this  case."  In  Continental  Ins.  Co.  v.  Pearce,  39  Kan. 
396,  18  Pac.  291,  it  is  said:  "This  is  but  a  form  of  words  to  attempt 
to  create  on  paper  an  agency,  which  in  fact  never  existed.  *  *  » 
The  real  fact,  as  it  existed,  cannot  be  hidden  in  this  manner;  much 
less  can  it  be  destroyed,  and  something  that  did  not  in  reality  exist 
be  placed  in  its  stead.  The  substance  is  superior  to  the  mere  drap- 
ery of  words  with  which  one  party  wishes  to  bring  into  existence 
and  clothe  an  unreal  authority."  In  Indiana  it  is  also  held  that  a 
recital  in  the  policy  that  the  broker  obtaining  an  insurance  is  the 
agent  of  the  insured  is  not  conclusive  upon  that  subject.  Indiana 
Ins.  Co.  v.  Hartwell,  100  Ind.  566.  In  North  British  &  M.  Ins.  Co.  v. 
Crutchfield,  108  Ind.  518,  9  N.  E.  458,  the  agency  clause  was  held 
to  be  absolutely  void  as  applied  to  a  local  agent,  upon  whose  counter 
signature  the  validity  of  the  policy,  by  its  terms,  was  made  to  de- 
pend. In  Boetcher  v.  Hawkeye  Ins.  Co.,  47  Iowa,  253,  it  was  held 
that,  if  the  assured  had  the  right  to  believe  the  soliciting  agent  was 
the  agent  of  the  company,  the  insertion  of  a  clause  in  the  policy 
providing  that  he  was  the  agent  of  the  assured  constituted  a  fraud 
upon  the  latter,  of  which  the  company  could  not  take  advantage. 
Nassauer  v.  SuSQuehanna  M.  &  F.  Ins.  Co.,  109  Pa.  St.  509;  Kister  v. 
Lebanon  Mut.  Ins.  Co.,  128  Pa.  St.  553,  5  L.  R.  A.  646;  Lycoming 
Fire  Ins.  Co.  v.  Ward,  90  111.  545;  Kausal  v.  Minnesota  Farmers' 
Mut.  Fire  Ass'n,  31  Minn.  17;  Planters'  Ins.  Co.  v.  Myers,  55  Miss. 
479,  30  Am,  Rep.  521;  Schunck  v.  Gegenseitiger  Wittwen  &  Waisen 
Fond,  44  Wis.  369;  Grace  v.  American  Cent.  Ins.  Co.,  109  U.  S.  278, 
3  Sup.  Ct.  207;  Whiteside  v.  Supreme  Conclave  I.  0.  H.,  82  Fed. 
275;  Supreme  Lodge  K.  P.  v.  Withers,  177  U.  S.  260,  20  Sup.  Ct.  615; 
McElroy  v.  British  American  Assur.  Co.  (C.  C.  A.),  94  Fed.  990; 
Arff  V.  Star  Fire  Ins.  Co.,  125  N.  Y.  57.  See,  contra,  Campbell  v.  Su- 
preme Lodge  K.  P.  of  the  World,  168  Mass.  397,  47  N.  E.  109;  Wilber 
V.  Williamsburgh  City  Fire  Ins.  Co.,  122  N.  Y.  439. 


§  92  STIPULATIONS    IN    POLICY    KEGULATING    AGENCY.  207 

lield  to  be  limited  to  such  acts  as  the  agent  performed  in  the 
obtaining  of  the  policy  and  not  applicable  to  renewals. 

But  while  such  stipulations  are  ineffectual  to  change  the 
status  of  one  who  is  in  fact  the  agent  of  the  insurer  so  as  to 
make  him  instead  the  agent  of  the  insured,  they  are  valid  and 
effective  as  controlling  the  status  of  persons  operating  on  their 
own  account  or  on  behalf  of  the  assured,  and  not  representing 
the  insurer  in  procuring  the  insurance.  ^"^^ 

In  a  Maryland  case,  the  agent  of  a  company  which  had 
issued  a  policy  on  the  property  was  applied  to  for  a  renewal 
thereof.  He  declined  to  accept  the  risk  entire,  but  issued 
a  policy  for  a  portion  of  the  amount  desired  and  procured 
a  policy  in  defendant  company  for  a  similar  amount.  Both 
policies  came  to  insured  tlirough  one  not  an  agent  of  de- 
fendant to  whom  payment  of  the  premium  was  made.  The 
policy  issued  by  it  provided  that  "any  person,  other  than  the 
assured,  wdio  may  have  procured  this  insurance  to  be  taken  by 
this  company,  shall  be  deemed  to  be  the  agent  of  the  assured 
named  in  the  policy,  and  not  of  this  company,  under  any 
circumstances  whatever,  or  in  any  transaction  relating  to  this 
insurance."  The  court  held  that  these  facts  formed  a  proper 
basis  for  the  application  of  the  provision  quoted,  and  de- 
fendant was  not  bound  by  the  acts  of  the  agents  of  the  other 
company.  ^'^^ 

""Kister  v.  Lebanon  Mut.  Ins.  Co.,  128  Pa.  St.  553,  5  L.  R.  A.  646; 
Davis  V.  Aetna  Mut.  Fire  Ins.  Co.,  67  N.  H.  335,  27  Ins.  Law  J.  549, 
39  Atl.  902;  Estes  v.  Aetna  Mut.  Fire  Ins.  Co.,  67  N.  H.  462,  33  Atl. 
535;  Sowden  v.  Standard  Ins.  Co.,  44  Upper  Can.  Q.  B.  95,  5  Ont. 
App.  290;  Fowler  v.  Preferred  Ace.  Ins.  Co.,  100  Ga.  330,  28  S.  E. 
398;  Globe  Mut.  Life  Ins.  Co.  v.  Wolff,  95  U.  S.  329;  New  York  Life 
Ins.  Co.  V.  Fletcher,  117  U.  S.  519. 

•^Atlantic  Ins.  Co.  v.  Carlin.  58  Md.  336;  Wilber  v.  Williamsburgh 
City  Fire  Ins.  Co..  122  N.  Y.  439. 


208  AGENTS.  §  93- 

Agents  of  Mutual  Compakies. 

§  93.  There  is  no  diflFerence  in  this  regard  between  the  pow- 
ers of  agents  of  stock  and  agents  of  mutual  companies  prior  to 
the  delivery  and  acceptance  of  the  policy. 

It  is  often  contended  that  tlie  difference  in  tlie  character  of 
"stock"  and  "mutual"  insurance  companies  makes  a  differ- 
ence in  the  relative  duties  of  the  applicant  and  the  company^ 
and  in  the  authority  of  the  agents  employed ;  that  in  the  case 
of  a  mutual  company,  the  application  is  in  effect  not  merely 
for  insurance,  but  for  admission  to  membership, — the  appli- 
cant himself  becoming  a  member  of  the  company  upon  the  is- 
suance of  the  policy.  This  distinction  is  usually  based  upon 
the  ground  thut  the  stipulations  held  binding  upon  the  in- 
sured are  contained  in  the  charter  or  by-laws  of  the  company, 
and  that  a  person  applying  for  membership  is  conclusively 
bound  by  the  terms  of  such  charter  and  by-laws.  It  is  true 
that  in  the  case  of  a  mutual  company  the  insured  becomes  in 
theory  a  member  of  the  company  upon  the  issuance  of  the  pol- 
icy. But  in  applying  and  contracting  for  insurance,  the  ap- 
plicant and  the  company  are  as  much  two  distinct  persons  as 
in  the  case  of  a  stock  company,  and  there  is  no  reason  for 
holding  the  agent  who  takes  the  application  any  less  the  agent 
of  the  insurer  in  the  one  case  than  in  the  other.  The  member- 
ship does  not  begin  until  the  policy  is  issued.  As  to  all  previous 
negotiations  the  agent  acts  only  forthe  company.^'^^^  But  after 

'"'*  Russell  V,  Detroit  Mut.  Fire  Ins.  Co..  80  Mich.  407,  45  N.  W. 
356;  Grace  v.  American  Cent.  Ins,  Co.,  109  U.  S.  278,  3  Sup.  Ct.  207; 
Harle  v.  Council  Bluffs  Ins.  Co.,  71  Iowa.  401,  32  N.  W.  396;  Kister 
V.  Lebanon  Mut.  Ins.  Co.,  128  Pa.  St.  553;  Boetcher  v.  Hawkeye 
Ins.  Co.,  47  Iowa,  253;  Planters'  Ins.  Co.  v.  Myers,  55  Miss.  479; 
Deitz  V.  Providence  Wash:  Ins.  Co.,  31  W.  Va.  851,  33  W.  Va.  526; 
Newark  Fire  Ins.  Co.  v.  Sammons,  110  111.  166;  Coles  v.  Jefferson 
Ins.  Co.,  41  W.  Va.  261,  23  S.  E.  732;  American  Fire  Ins.  Co.  v. 
Brooks,  83  Md.  22,  34  Atl.  373;  Sullivan  v.  Phenix  Ins.  Co.,  34  Kan. 


§  94  STIPULATIONS    IN    APPLICATION.  2U9 

an  applicant  has  accepted  a  policy  in  a  mutual  company  and 
has  thereby  become  a  member  he  is  bound  by  all  the  stipula- 
tions in  the  policy  and  all  the  conditions  and  provisions  of  the 
charter  and  by-laws.  He  is  chargeable  with  notice  and  knowl- 
edge of,  and  is  conclusively  presumed  to  know,  the  extent  and 
limitations  of  the  agent's  x^ower  and  authority  as  fixed  by  the 
charter  or  by-law^s.^'^^ 

Stipulations  in  Application  Regulating  Agency. 

§  94.  An  applicant  for  a  policy  of  insurance  is  bound  by  a 
stipulation  in  his  written  application  that  a  third  person  par- 
ticipating in  the  negotiations  shall,  for  the  purposes  of  procur- 
ing the  policy,  be  deemed  his  agent,  and  not  the  agent  of  the 
insurer. 

Where  an  insurance  policy  is  based  upon  a  written  applica- 
tion such  application  is  the  initial  step  towards  the  consumma- 
tion of  the  contract.  It  is  in  itself  an  agreement  of  the  parties, 
wherein  they  are  privileged,  unless  prevented  by  statute,  to 
make  such  stipulations  as  they  choose  concerning  the  conduct 
of  subsequent  negotiations  and  proceedings ;  and  no  principle 
of  law  is  violated  by  enabling  the  parties  to  say  who  are  the 
agents  of  each  party,  and  what  shall  be  the  status  of  agents. 

170;  Kausal  v.  Minnesota  Farmers'  Mut.  Fire  Ins.  Ass'n,  31  Minn. 
17;  Joyce,  Ins.  §  393;  May,  Ins.  §  139  et  seq. 

"^Morawetz,  Priv.  Corp.  §501;  Bacon,  Ben.  Soc.  426;  Niblack, 
Mut.  Ben.  Soc.  §§  12,  166;  Miller  v.  Hillsborough  Mut.  Fire  Assur. 
Ass'n,  42  N.  J.  Ea.  461;  Leonard  v.  American  Ins.  Co.,  97  Ind.  299; 
Brewer  v.  Chelsea  Mut.  Fire  Ins.  Co.,  14  Gray  (Mass.),  209;  Mer- 
serau  v.  Phoenix  Mut.  Life  Ins.  Co.,  66  N.  Y.  274;  Sovereign  Camp  W. 
of  W.  V.  Rothschild,  15  Tex.  Civ,  App.  463,  40  S.  W.  553;  Manufact- 
urers' &  Merchants'  Mut.  Ins.  Co.~v.  Gent,  13  111.  App.  308;  Coles  v. 
Iowa  State  Mut.  Ins.  Co.,  18  Iowa,  425;  Mitchell  v.  Lycoming  Mut. 
Ins.  Co.,  51  Pa.  St.  402;  Bauer  v.  Samson  Lodge,  K.  P.,  102  Ind.  262; 
Fugure  v.  Mutual  Soc.  of  St.  Joseph,  46  Vt.  362;  Fitzgerald  v. 
Metropolitan  Ace.  Ass'n.  106  Iowa,  457,  76  N.  W.  809;  ante,  note  122, 
"Subordinate  Lodges  as  Agents." 
KERR,  INS.— 14 


210  AGENTS.  §  94 

The  reasoning  in  supiDort  of  the  rule  laid  down  in  thfe  previous 
section,  is  based  upon  the  theory  that  the  insured  has  no  knowl- 
edge of  stipulations  in  the  policy  regulating  agency  until  the 
contract  is  completed,  and  that  such  stipulations  are  not 
brought  to  his  notice  till  the  pohcy  is  delivered.  But  this 
reasoning  has  no  relevancy  in  a  discussion  of  the  rights  of  the 
parties  to  stipulate  for  themselves  in  the  application.  It  is 
competent  for  any  party  or  corporation  to  employ  an  agent  in 
the  negotiation  of  a  contract,  whether  of  insurance  or  other- 
wise, and  to  amplify  or  limit  the  powers  of  such  agent.  And 
if  an  aj)plicant  signs  a  contract  making  a  solicitor  his  agent  in 
the  matters  then  pending,  he  is  held  to  have  knowledge  of  its 
contents ;  and  he  w^ill  not  be  heard  to  say  after  Ms  application 
has  been  accepted  and  acted  on,  that  he  did  not  know  the  con- 
tents of  his  proposal  upon  which  the  subsequent  contract  is 
based ;  he  is  estopped  to  assert  such  a  claim  in  a  suit  wherein 
he  relies  upon  and  seeks  to  enforce  such  contract.  It  may  well 
be  argued  in  certain  cases  that  fraud  will  justify  the  rescis- 
sion of  the  contract  where  the  applicant  can  bring  himself 
within  the  rules  of  law  entitling  him  to  relief  from  a  contract 
which  he  did  not  intend  to  make ;  but  one  cannot  be  heard  to 
assert  and  disaffirm  his  contract  in  the  same  action.  He  must 
take  it  cum  onere  or  reject  it  altogether.  He  cannot  main- 
tain his  action  on  the  policy,  issued  upon  his  proposal,  and  at 
the  same  time  repudiate  the  terms  of  his  proposal.  A  pro- 
vision of  an  application  that  the  person  taking  it  and  the 
medical  examiner  shall  be  and  are  the  agents  of  the  applicant 
and  not  the  agents  of  the  insurer  in  the  preparation  of  the 
application  and  as  to  all  statements  and  answers  contained 
therein  is  binding  upon  the  insured ;  and  false  statements 
and  answers  are  chargeable  to  and  imputed  to  the  insured 
even  though  he  answered  the  questions  truthfully  and  the 


§  94r  STIPULATIOiS'S    REGULATING    AGENCY.  211 

false  answers  were  inserted  by  the  agent  without  the  knowl- 
edge of  the  insured. ^"^^ 

Limitations  of  Rule. 

A  provision  in  an  application  making  a  general  agent  of  the 
insurer  the  agent  of  the  insured  cannot  change  the  legal  status 
of  the  agent. ^''■^  The  declarations  made  bj  a  medical  ex- 
aminer in  his  letter  to  his  insurance  company,  as  to  the  habits 
of  the  applicant,,  are  not  binding  upon  the  latter  notwith- 
standing the  fact  that  the  application  provides  that  the  medi- 
cal examiner  is  the  agent  of  the  applicant  in  filling  up  the 
same,  and  the  applicant  knew  that  under  certain  conditions  a 
letter  was  to  be  written  to  the  company  by  the  medical  ex- 
aminer in  relation  to  the  application  and  the  examination. ^'^'^ 
The  stipulation  in  an  application  that  "the  application  has 
been  made,  prepared,  and  written  by  the  applicant,  or  by  his 
own  proper  agent"  does  not  make  the  agent  of  the  insurer,  who 

"==New  York  Life  Ins.  Co.  v.  Fletcher.  117  U.  S.  519;  Maier  v.  Fi- 
delity Mut.  Ins.  Ass'n  (C.  C.  A.),  78  Fed.  5G6;  Ward  v.  Metropolitan 
Life  Ins.  Co.,  66  Conn.  227;  Ketcham  v.  American  Mut.  Ace.  Ass'n, 
117  Mich.  521,  76  N.  W.  5;  McCoy  v.  Metropolitan  Life  Ins.  Co.,  133 
Mass.  82;  Flynn  v.  Equitable  Life  Assur.  Soc,  67  N.  Y.  500;  Lee  v. 
Guardian  Life  Ins.  Co.,  2  Cent.  Law  J.  495;  Messelback  v.  Norman, 
122  N.  Y.  578;  Globe  Mut.  Life  Ins.  Co.  v.  Wolff,  95  U.  S.  329;  Knick- 
erbocker Life  Ins.  Co.  v.  Norton,  96  U.  S.  240;  Hubbard  v.  Mutual 
Reserve  Fund  Life  Ass'n,  80  Fed.  681;  Bernard  v.  United  Life  Ins. 
Ass'n,  14  App.  Div.  (N.  Y.)  142,  43  N.  Y.  Supp.  527;  Chamberlain  v. 
Prudential  Ins.  Co.  (Wis.),  85  N.  W,  128;  Wilber  v.  Williamsburgh 
City  Fire  Ins.  Co.,  122  N.  Y,  439;  Walsh  v.  Hartford  Fire  Ins.  Co., 
73  N.  Y.  5;  Clevenger  v.  Mut.  Life  Ins.  Co.,  2  Dak.  114,  3  N.  W.  313. 
See  post,  note  218;  Ebert  v.  Mutual  Reserve  Fund  Life  Ass'n,  81 
Minn.  116,  83  N.  W.  507. 

"'Coles  V.  Jefferson  Ins.  Co.,  41  W.  Va.  261,  25  Ins.  Law  J.  247, 
23  S.  E.  722. 

"°  Massachusetts  Ben.  Life  Ass'n  v.  Robinson,  104  Ga.  256,  7  Ins. 
Law  J.  (N.  S.)  1003,  42  L.  R.  A.  261;  Endowment  Rank,  K.  P.,  v. 
Cogbill.  99  Tenn.  28.  26  Ins.  Law  J.  920.  41  S.  W.  340. 


212  AGENTS.  §  US' 

solicits  the  insurance,  the  agent  of  tlie  insured  for  tlie  purpose 
of  taking  the  ai)plication,  so  that  the  insured  "will  be  bound  bj 
the  mistake  or  fraud  of  the  agent  in  transcribing  his  answers 
to  the  questions  in  the  application,^'''^ 

Befoke  Issuance  of  Policy, 

§  95,  An  insurer  is  always  bound  by  the  acts,  knowledge, 
fraud,  mistake  and  representations  of  its  agents  while  they  act 
within  the  scope  of  their  real  or  apparent  authority. 

The  insurer  is  chargeable  with  the  knowledge  of  its  agent, 

(a)  Acquired  by  him  in  the  line  of  his  duty,  or 

(b)  Had  in  mind  by  him  during  the  discharge  of  his  duty. 
Notice  to  an  insurance  agent,  at  the  time  of  receiving  an  ap- 
plication or  issuing  or  renewing  a  policy,  of  facts  material  to 
the  risk  is  notice  to  the  insurer. 

The  great  preponderance  of  decided  cases  hold  that  the 
agents  of  an  insurance  company  authorized  to  procure  appli- 
cations for  insurance  and  to  forward  them  to  the  company  for 
acceptance  are  the  agents  of  the  insurers,  and  not  of  the  in- 
sured, in  all  that  they  say  or  do  in  procuring  or  preparing 
the  applications.  Public  policy  and  good  faith  require  that 
the  persons  clothed  by  the  insurance  companies  with  power  to 
examine  proposed  risks,  and  fill  out^  receive,  and  approve 
applications  for  insurance,  shall  bind  their  principals  by  acts 
done  and  knowledge  acquired  by  them  in  the  execution  of  such 
power.  ^'^'^ 

"''O'Farrell  v.  Metropolitan  Life  Ins.  Co.,  22  App.  Div.  495,  48 
N.  Y.  Supp.  199;  rehearing  denied  in  48  N.  Y.  Supp.  695. 

^"Home  Fire  Ins.  Co.  v.  Gurney,  56  Neb.  306,  76  N.  W.  553;  Home 
Fire  Ins.  Co.  v.  Fallon,  45  Neb.  554;  Kausal  v.  Minnesota  Farmers' 
Mut.  Fire  Ins.  Ass'n,  31  Minn.  17,  and  cases  cited;  Quinn  v.  Metro- 
politan Life  Ins.  Co.  10  App.  Div,  483,  41  N.  Y.  Supp.  1060;  Tooker 
V.  Security  Trust  Co.,  26  App.  Div.  372,  49  N,  Y.  Supp.  814;  Metro- 
politan Ace.  Ass'n  V,  Clifton,  63  111.  App.  197;  Coles  v.  Jefferson  Ins, 
Co.,  41  W.  Va.  261,  23  S.  E.  732;  Marston  v.  Kennebec  Mut.  Life  Ins. 
Co.,  89  Me.  266,  36  Atl.  389;  German  Ins.  Co.  v.  Gray,  43  Kan.  497, 
8  L.  R.  A,  70;  Equitable  Life  Ins.  Co,  v.  Hazel  wood,  75  Tex,  338,  7 


§  95  BEFORE    ISSUANCE    OF    POLICY.  213 

Acts  of  Agents. 

If  the  agent  of  insurer  assumes  the  responsibili tj  of  valu- 
ing the  property  he  insures,  and  was  not  influenced  bv  the  rep- 
resentations or  refusal  of  the  insured  to  answer  questions, 
the  eonipanv  is  bound. ^"^  "When  the  insured  signs  the  ap- 
plication in  blank  and  the  agent  of  the  insurer,  without  au- 
thority or  direction  from  insured,  fills  out  the  blanks  therein, 
the  company  cannot  take  advantage  of  any  misstatements 
contained  in  it.^^^  If  the  agent  of  insurer  writes  the  answers 
concerning  the  title  of  insured  to  the  property  without 
making  inquiries  of  him  the  question  of  waiver  is  for  the 
jury,  notwithstanding  a  provision  in  the  policy  declaring 
that  it  shall  be  void  if  the  true  state  of  the  title  is  not  dis- 
closed. •'^^  An  insurer  cannot  take  advantage  of  the  fact  that 
its  agent  who  took  the  application  for  the  insured,  signed 
the  latter's  name  thereto  with  his  authority  ;^^^  and  after  re- 
,ceiving  a  premium  and  issuing  a  policy  therefor  based  on 
an  apj)lication  filled  up  by  its  authorized  agent,  is  estopped  to 
set  up  false  answers  therein,  unless  the  applicant  was  aware 
at  the  time  the  answers  were  being  written,  or  before  signing 
the  application,  that  they  were  written  falsely  to  defraud 
the  company. ^^^ 

L.  R.  A.  217;  Continental  Life  Ins.  Co.  v.  Chamberlain,  132  U.  S. 
304.  There  is  no  difference  in  this  particular  between  agents  of 
stock  and  mutual  companies;  nor  between  regularly  appointed  and 
statutory  agents.  Bourgeois  v.  Northwestern  Nat.  Ins.  Co.,  86  Wis. 
609,  57  N.  W.  348;  Boyle  v.  Northwestern  Mut.  Relief  Ass'n,  95  Wis. 
312,  70  N.  W.  351;  Continental  Life  Ins.  Co.  v.  Chamberlain,  supra. 

m  Perry  v.  Mechanics'  Mut.  Ins.  Co.,  11  Fed.  485. 

''"  Kingston  v.  Aetna  Ins.  Co.,  42  Iowa,  46. 

""  Dahlberg  v.  St.  Louis  Mut.  F.  &  M.  Ins.  Co.,  9  Mo.  App.  584. 

"'Prudential  Ins.  Co.  v.  Cummins'  Adm'r,  19  Ky.  Law  Rep.  1770, 
27  Ins.  Law  J.  637,  44  S.  W.  431. 

'"■  Southern  Ins.  Co.  v.  Hastings,  64  Ark.  255,  41  S.  W.  1093. 


2U  AGENTS.  §  95 

"What  Knowledge  of  Agent  Binds  Insurer. 

A  principal  is  bound  witli  notice  of  sucli  facts  as  come  to 
his  agent's  knowledge  wliile  acting  within  the  scope  of  his 
agency,  or  had  in  mind  by  the  agent  while  discharging  his 
duty.  Knowledge  acquired  by  an  agent  in  the  taking  or 
preparation  of  an  application,  or  in  and  about  the  issuing 
of  a  policy  in  connection  with  the  subject  matter  thereof, 
is  imputed  to  the  insurer.  And  the  insurer  is  chargeable 
with  the  soliciting  agent's  knowledge  concerning  the  falsity 
of  statements  made  in  the  application.  ^^^  And  notice  to 
an  agent's  clerk  is  notice  to  the  agent  and  hence  to  the  prin- 
cipal. ^^^  But  a  provision  that  the  agent's  knowledge  of  the 
falsity  of  any  statement  made  by  the  assured  shall  not  affect 
the  company's  right  to  declare  the  policy  void  on  account  of 
a  breach  of  warranty  is  binding  on  the  assured. ^^^  In  order 
to  avoid  the  effect  of  a  condition  against  prior  insurance, 
proof  that  the  agent  who  took  the  application  was  put  upon 
inquiry  is  insufiicient.  It  must  be  slio\vn  that  the  agent  ac- 
tually knew  of  outstanding  insurance.  He  cannot  be  held 
to  have  such  knowledge  where  he  mistakenly  supposed  the 

"'  German  Ins.  Co.  v.  Gray,  43  Kan.  497,  8  L.  R.  A.  70;  Kauffman  v. 
Robey,  60  Tex.  308;  Massachusetts  Life  Ins.  Co.  v.  Eshelman,  30 
Ohio  St.  657;  Smith  v.  Niagara  Fire  Ins.  Co.,  60  Vt.  682,  1  L.  R.  A. 
217;  McGurk  v.  Metropolitan  Life  Ins.  Co.,  56  Conn.  528,  1  L.  R.  A. 
563;  Wade,  Notice,  §  687;  Stone  v.  Hawkeye  Ins.  Co.,  68  Iowa,  737; 
Phenix  Ins.  Co.  v.  Searles,  100  Ga.  97,  27  S.  E.  779;  Richmond  v. 
Niagara  Fire  Ins.  Co.,  79  N.  Y,  230;  Mullin  v.  Vermont  Mut.  Fire 
Ins.  Co.,  58  Vt.  113;  Couch  v.  Rocliester  German  Fire  Ins.  Co.,  25 
Hun  (N.  Y.),  469;  Forward  v.  Continental- Ins.  Co.,  142  N.  Y.  382,  2h 
L.  R.  A.  637. 

'"'  Bennett  v.  Council  Bluffs  Ins.  Co.,  70  Iowa,  600,  31  N.  W.  948. 

^'^  Hutchison  v.  Hartford  Life  &  Annuity  Ins.  Co.  (Tex.),  39 
S.  W.  325;  Ebert  v.  Mutual  Reserve  Fund  Life  Ass'n,  81  Minn.  116, 
83  N.  W.  507. 


§  95  BEFORE    ISSUANCE    OF    POLICY. 


215 


other  insurance  to  have  lapsed ;  ^^'^  and  the  knowledge  must  be 
of  matters  mentioned  in  the  policy  and  application. ^^^ 

A  different  rule  obtains  in  South  Carolina,  where  it  is* 
held  that  an  insurer  cannot  claim  a  forfeiture  of  a  policy 
for  violation  of  its  conditions,  if  the  agent  who  issued  the 
policy  had  information  which,  if  i>ursued,  would  have  led 
to  actual  knowledge  of  the  existence  of  the  facts  on  account 
of  which  the  forfeiture  was  claimed,  even  though  he  did  not 
have  any  actual  knowledge  at  the  time  of  issuing  the  pol- 
{Qj^rss  Knowledge  of  a  fact- received  by  an  agent  at  a  time 
when  he  is  not  acting  as  such,  if  actually  had  in  mind  by  the 
agent  when  he  subsequently  acts  for  his  principal,  will,  as 
respects  that  transaction,  be  imputed  to  the  principal ;  ^^^  but 
the  agent's  knowledge  of  matters  affecting  the  risk  acquired 
while  attending  to  his  own  affairs  will  not  be  chargeable  to 
his  principal  unless  it  was  present  in  his  mind  when  the 
policy  was  issued,  or  when,  in  the  line  of  his  duty  to  his  prin- 
cipal, he  did  some  act  recognizing  the  validity  of  the  policy 
after  its  issuance. ^^"^  The  insurer  is  not  chargeable  with 
notice  of  a  chattel  mortgage  on  the  insured  property  though 
its  agent  who  issued  the  policy  had  previously  acquired 
knowledge  of  the  mortgage  in  the  capacity  of  notary  public 

"» Steele  v.  German  Ins,  Co.,  93  Mich.  81,  18  L.  R.  A.  85. 

»"Enos  V.  Sun  Ins.  Co.,  67  Cal.  621;  Traders'  Ins.  Co.  v.  Cassell 
(Ind.  App.),  50  Cent.  Law  J.  248.  In  Mississippi  it  is  held  that  no- 
tice to  an  agent  whose  authority  is  limited  to  soliciting,  receiving, 
and  submitting  applications,  and  delivering  policies  and  collecting 
premiums,  that  one  who  is  about  to  insure  a  general  stock  of  mer- 
chandise keeps  gunpowder  in  his  store,  is  not  notice  to  the  prin- 
cipal.   Liverpool  &  L.  &  G.  Ins.  Co.  v.  Van  Os,  63  Miss.  431. 

"'  Gandy  v.  Orient  Ins.  Co.,  52  S.  C.  224,  29  S.  E.  655. 

"'Wilson  V.  Minnesota  Farmers'  Mut.  Fire  Ins.  Ass'n,  36  Minn. 
112. 

'"o  Phoenix  Ins.  Co.  v.  Flemming,  65  Ark.  54,  39  L,  R.  A.  789. 


216  AGENTS.  §  95 

and  attorney  for  tlie  insured.  ^^-^  Knowledge  of  tlie  condi- 
tion of  property  acquired  by  an  agent  in  connection  with  his 
duties  as  agent  of  another  company,  some  days  before  tlie 
issuing  of  the  policy  in  suit,  does  not  create  the  presumption 
that  he  knew  the  previous  condition  still  existed  when  he 
issued  the  latter  policy,  and  that  he  intended  to  waive  any 
provisions  of  the  policy,  when  it  further  appears  that  the 
insured  had  previously  agreed  to  put  the  property  into  the 
condition  required  by  the  policy  ;^^^  but  the  mere  fact  that 
several  months  have  elapsed  between  the  time  when  an  agent 
received  notice  of  the  condition  of  property  insured  and  the 
issuing  of  the  policy,  the  notice  coming  in  the  course  of  the 
negotiations  for  the  placing  of  the  insurance  does  not  as  a 
matter  of  law  disconnect  the  notice  and  the  policy.  ^^^  No- 
tice received  by  the  secretary  of  the  insurer  through  an  agent 
of  the  company  at  a  different  place  than  that  where  the  prop- 
erty was  situated  and  after  the  issuance  of  the  policy,  of  the 
fact  that  a  cotton  gin  was  maintained  in  the  insured  building, 
is  not  such  a  notice  as  compelled  the  insurer  to  claim  a  for- 
feiture immediately.^^*  It  is  not  a  reason  for  the  avoidance 
of  a  policy  that  there  was  a  failure  to  state  all  the  material 
facts  in  the  application,  when  such  facts  were  known  to  the 
insurer's  agent  w^ho  Avrote  the  application ;  ^^^  nor  that  the 
premises  were  used  for  purposes  other  than  those  set  forth 
in  the  application  and  policy  when  the  agent  had  full  knowl- 

"1  Shaffer  v.  Milwaukee  Mechanics'  Ins.  Co.,  17  Ind.  App.  204,  46 
N.  E.  557. 

i»*  Merchants'  Ins.  Co.  v.  New  Mexico  Lumber  Co.,  10  Colo.  App. 
223,  26  Ins.  Law  J.  969.  51  Pac.  174. 

193  Weber  v.  Germania  Fire  Ins.  Co.,  16  App.  Div.  596,  44  N.  Y. 
Supp.  976. 

"*  Texas  Banking  &  Insurance  Co.  v.  Hutchins,  53  Tex.  61. 

"='Post,  note  199;  Aetna  Life  Ins.  Co.  v.  Paul,  10  111.  App.  431. 


§  90  WHAT    AN    AGENT   MAT    WAIVE.  217 

edge  of  all  the  uses  when  he  received  the  application. '^^^  If 
a  policy  is  issued  solely  npon  the  judgment  of  the  agent  of  the 
insurer  after  an  inspection  of  the  premises  covered  by  it,  his 
knowledge  as  to  the  character  of  the  property  and  the  man- 
ner of  its  use  before  it  Avas  insured  is  the  knowledge  of  tlio 
company.  ^'^'^ 

What  an  Agent  mat  Waive. 

§  96.  Since  the  acts  and  knowledge  of  the  agent,  within  the 
limitations  already  defined,  are  chargeable  to  and  bind  his 
principal,  and 

Since,  as  we  shall  hereafter  see,  the  insurer  waives 

(a)  The  existence  of  prohibited  conditions  in,  or 

(b)  Forbidden  use  of  the  property  insured  by  issuing  a 

policy  with  knowledge  of  such  conditions  or 
use,  it  follows: 
ri)  That  an  agent  authorized  to  issue  policies  can 
bind  his  principal  by  insuring  property  with 
actual  knowledge  of  a  breach  of  the  conditions 
of  the  policy:  and  that 

(2)  The  issuing  or  renewing  of  a  policy  of  insurance 

by  an  agent  who  has  knowledge  of  an  existing 
breach  of  conditions  is  a  waiver  by  the  insurer 
of  such  breach:  and 

(3)  Will  estop  the  insurer  from  insisting  upon  a  for- 

feiture on  account  of  such  breach. 

From  what  has  already  been  said,  it  is  evident  that  all 
knowledge  concerning  the  condition,  use,  ownership,  occu- 
pancy or  title  of  property  about  to  be  insured,  and  all  knowl- 
edge of  any  facts  concerning  a  life  about  to  be  insured,  and 
all  knowledge  in  any  way  material  to  or  in  any  manner  affect- 
ing the  risk  about  to  be  insured,  whatever  be  tlie  form  or 
nature  of  the  insurance,  which  comes  to  an  agent  whether 
in  soliciting  insurance,  or  in  receiving  applications,  or  in  or 

>»''  Imperial  Fire  Ins.  Co.  v.  Shimer,  96  111.  580.  But  see  Birming- 
ham Fire  Ins.  Co.  v.  Kroegher,  83  Pa.  St.  64. 

'"'  Brink  v.  Merchants'  &  Mechanics'  Ins.  Co.,  49  Vt.  442. 


218  AGENTS.  §  96 

about  tlie  making  of  the  contract  or  issuing  tlie  policy, 
becomes  the  knowledge  of  his  principal.  The  conditions 
and  stipulations  usually  found  in  policies  of  insurance, 
e.  g.  prohibiting  certain  use  of  the  insured  property,  against 
change  in  title,  or  encumbrance  or  other  insurance  or  va- 
cancy, etc.,  are  insert-ed  for  the  protection  and  benefit  of  the 
insurer  by  whom  they  may  be  waived;  and  an  insurer  by 
issuing  a  policy  waives  all  objections  on  account  of  matters 
(concerning  the  insured  property)  of  which  it  had  prior 
knowledge;  and  those  matters  cannot  be  set  up  to  defeat  an 
action  on  the  policy. 

It  follows,  therefore,  that  the  knowledge  of  an  agent  au- 
thorized to  issue  policies,  of  facts  wdiich  render  the  policy 
voidable  at  the  insurer's  option,  is  the  knowledge  of  the  in- 
surer;  and  if,  wath  knowledge  of  such  facts,  the  agent  issues  a 
policy,  which  but  for  such  knowledge  would  have  been  void- 
able or  even  absolutely  void,  the  insurer  will  be  estopped  to 
assert  any  defense  arising  out  of  the  facts  so  known  to  its 
agent,  and  will  be  held  to  have  waived  all  rights  to  avoid 
the  policy,  because  of  such  facts.  This  is  so,  even  if  the 
policy  denies  the  right  of  an  agent  to  waive  any  of  its  pro- 
visions, or  proliibits  any  waiver,  except  in  writing  indorsed 
upon  the  policy  or  attached  thereto.  An  insurance  company 
cannot  relieve  itself  from  the  legal  consequences  which  the 
knowledge  of  its  agent  imposes  upon  it  by  providing  in  the 
policy  that  "the  use  of  general  terms,  or  anything  less  than 
a  distinct,  specific  agreement,  clearly  expressed  and  indorsed 
on  the  policy,  shall  not  be  construed  as  a  waiver  of  any 
printed  or  written  condition  or  restriction  therein ;"  that  the 
agent  "has  no  authority  to  waive,  modify  or  strike  from  the 
policy  any  of  its  printed  conditions ;"  that  his  assent  to  an 
increase  of  risk  is  not  binding  upon  the  company  until  it  is 
indorsed  upon  the  policy  and  the  increased  premium  paid; 


g  9G  WHAT    AN    AGENT   MAY    WAIVE.  219 

and  tliatj  in  case  the  policy  shall  become  void  by  the  violation 
of  any  condition  thereof,  the  agent  has  no  power  to  revive 
it ;  ^^^  nor  by  a  provision  of  the  policy  that  no  person  except 
the  president  or  secretary  is  authorized  to  make  alterations 
or  discharge  contracts  or  waive  forfeitures. ^^^ 

"«Gans  V.  St.  Paul  F.  &  M.  Ins.  Co.,  43  Wis.  108;  Trustees  of 
St.  Clara  Female  Academy  v.  Northwestern  Nat.  Ins.  Co.,  98  Wis. 
257,  73  N.  W.  768;  Hartford  Fire  Ins.  Co.  v.  Keating,  86  Md.  130,  3? 
Atl.  29;  Patridge  v.  Commercial  Fire  Ins.  Co.,  17  Hun  (N.  Y.),  95; 
Whited  V,  Germania  Fire  Ins.  Co.,  76  N.  Y.  415;  Forward  v.  Conti- 
nental Ins.  Co.,  142  N.  Y.  382,  25  L.  R.  A.  637;  ante,  note  96. 

^"^'John  Hancock  Mut.  Life  Ins.  Co.  v.  Schlink,  175  111.  284,  51 
N.  E.  795.  See,  also,  Russell  v.  Detroit  Mut.  Fire  Ins.  Co.,  80  Mich. 
407,  45  N.  W.  356;  Kausal  v.  Minnesota  Farmers'  Mut.  Fire  Ins. 
Ass'n,  31  Minn.  17;  Germania  Life  Ins.  Co.  v.  Koehler,  168 '111.  2B3, 
4S  N.  E.  297;  Home  Ins.  Co.  v.  Mendenhall,  164  111.  458;  McGurk  v. 
Metropolitan  Life  Ins.  Co.,  56  Conn.  528,  1  L.  R.  A.  563;  -Commer- 
cial Ins.  Co.  v.  Spankneble,  52  111.  53;  Boetcher  v.  Hawkeye  Ins. 
Co.,  47  Iowa,  253;  German  Ins.  Co.  v.  Gray,  43  Kan.  497,  8  L.  R.  A. 
70;  Firemen's  Ins.  Co.  v.  Horton,  170  111.  258;  Richmond  v.  Niagara 
Falls  Ins.  Co.,  79  N.  Y.  230;  Smith  v.  Commonwealth  Ins.  Co.,  49 
Wis.  322;  Oakes  v.  Manufacturers'  F.  &  M.  Ins.  Co.,  135  Mass.  248. 
Compare  Pottsville  Mut.  Fire  Ins.  Co.  v.  Fromm,  100  Pa.  St.  347; 
Alston  V.  Greenwich  Ins.  Co.,  100  Ga.  282,  29  S.  E.  266. 
Illustrations  of  Waiver  of  Conditions  of  Policy. 

Requiring  sole  and  unconditional  ownership:  A  provision  in  a 
policy  for  forfeiture  in  case  the  title  of  the  assured  is  other  than 
sole  and  unconditional  ownership  is  waived,  notwithstanding  a  pro- 
vision prohibiting  the  agent  from  waiving  any  of  its  conditions, 
except  in  writing  upon  or  attached  thereto,  where  the  agent  solicit- 
ing the  insurance  receives  and  transmits  the  application,  delivers 
the  policy,  and  receives  the  premium  with  knowledge  that  the  as- 
sured does  not  own  the  sole  and  unconditional  title.  Scott  v.  Ger- 
man Ins.  Co.,  69  Mo.  App.  337;  Home  Ins.  Co.  v.  Duke,  84  Ind.  253: 
Phenix  Ins.  Co.  v.  Searles.  100  Ga.  97.  27  S.  E.  779;  Caldwell  v. 
Fire  Ass'n  of  Philadelphia,  177  Pa.  St.  492;  Graham  v.  American 
Fire  Ins.  Co.,  48  S.  C.  195,  26  S.  E.  323;  Germania  Fire  Ins.  Co.  v. 
Hick,  125  111.  361;  Trustees  of  St.  Clara  Female  Academy  v.  North- 
western Ins.  Co..  98  Wis.  257,  73  N.  W.  767.  But  see,  contra,  Liver- 
pool &  L.  &  G.  Ins.  Co.  V.  Van  Os,  63  Miss.  431. 

And  so  with    a    condition    against  additional    insurance.     Home 


220  AGENTS.  §  97 

Fraud  and  Mistake  of  Agent. 

§  97.  The  insurer  is  bound  by  the  act  of  its  agent  who,  either 
intentionally  or  negligently,  writes  false  answers  in  an  appli- 
cation, which  the  applicant  signs  in  good  faith,  believing  that 
it  contains  the  answers  he  has  given. 

Where  an  applicant  for  insurance  answers  fully  and  lion- 
•estlj,  but  the  agent  of  the  insurer  intentionally  or  negli- 
gently writes  false  and  untrue  answers,  or  omits  to  write 

Fire  Ins.  Co.  v.  Wood,  50  Neb.  381,  69  N.  W.  941;  Gandy  v.  Orient 
Ins.  Co.,  52  S.  C.  224,  29  S.  B.  655;  Erb  v.  Fidelity  Ins.  Co.,  99 
Iowa,  727,  69  N.  W.  261;  Strauss  v.  Phenix  Ins.  Co.,  9  Colo.  App. 
386,  48  Pac.  822;  Schroeder  v.  Springfield  F.  &  M.  Ins.  Co.,  51  S.  C. 
180,  28  S.  E.  371;  Cans  v.  St.  Paul  F.  &  M.  Ins^.  Co.,  43  Wis.  108. 

And  a  condition  against  vacancy:  Jordan  v.  State  Ins.  Co.,  64 
Iowa,  216;  Prendergast  v.  Dwelling  House  Ins.  Co.,  67  Mo.  App. 
427;  Menk  v.  Home  Ins.  Co.,  76  Cal.  51. 

And  a  condition  against  incumbrance:  Harding  v.  Norwich  Union 
Fire  Ins.  Soc,  10  S.  D.  64,  71  N.  W.  755;  Crescent  Ins.  Co.  v.  Camp, 
71  Tex.  503;  Russell  v.  Detroit  Mut.  Fire  Ins.  Co.,  80  Mich.  407; 
Phoenix  Ins.  Co.  v.  Warttemberg  (C.  C.  A.),  79  Fed.  245,  26  Ins.  Law 
J.  552. 

Against  misrepresentation  or  concealment:  By  issuing  a  policy 
with  knowledge  of  the  true  condition  of  the  title  of  the  property 
Insured,  insurer  is  estopped  to  claim  a  breach  of  a  condition  of  the 
policy  rendering  it  void  if  the  insured  shall  have  concealed  or  mis- 
represented any  material  fact  or  circumstance  concerning  the  sub- 
ject of  the  insurance.  Queen  Ins.  Co.  v.  May  (Tex.),  43  S.  W.  73; 
Firemen's  Ins.  Co.  v.  Horton,  170  111.  258;  Graham  v.  American  Fire 
Ins.  Co..  48  S.  C.  195,  26  S.  E.  323.      ' 

Iron-safe  clause:  But  the  waiver  of  an  iron-safe  clause  by  an 
agent  at  the  time  of  issuing  the  policy  is  ineffectual,  when  the 
policj'  stipulates  against  the  power  of  the  agent  to  waive  conditions. 
Post,  note  235;  Roberts,  Willis  &  Taylor  Co.  v.  Sun  Mut.  Ins.  Co., 
13  Tex.  Civ.  App.  64,  35  S.  W.  955.  Contra,  Home  Fire  Ins.  Co.  v. 
Gurney,  56  Neb.  306,  76  N.  W.  553.  An  agent  cannot  waive  a  provis- 
ion that  "no  insurance  would  be  binding  until  actual  payment  of 
the  premium"  where  the  policy  itself  contains  a  provision  that  none 
of  the  terms  can  be  waived  by  any  one  except  the  secretary  of  the 
company.  Wilkins  v.  State  Ins.  Co.,  43  Minn.  177.  The  knowledge 
of  the  general  agent  of  an  insurer  of  the  custom  of  stove  merchants 


§  97  FRAUD  A^D  MISTAKE  OF  AGENT.  221 

doTVTi  some  answers  in  the  application,  and  the  applicant 
signs  his  name  thereto  in  good  faith  believing  that  it  con- 
tains the  answers  he  has  given,  the  company  is  bonnd  by  the 
act  of  its  agent,  and  cannot  relieve  itself  from  liability  on 
account  of  the  mistake,  omission  or  representations  in  the 
application. 2'^*'     Where   a  mistake  in  issuing  a  policy,   as 

to  use  and  have  on  the  premises  gasoline  for  the  purpose  of  exhibit- 
ing stoves,  and  of  the  fact  that  the  insured  has  been  in  the  habit  of 
so  using  gasoline,  has  no  effect,  either  as  an  estoppel  or  as  a  waiver 
of  a  clause  avoiding  the  policy  for  the  use  or  keeping  of  gasoline 
upon  the  premises,  "notwithstanding  any  usage  or  custom  of  trade 
or  manufacture."  Fischer  v.  London  &  L.  Fire  Ins.  Co.,  83  Fed.  807. 
in  Cases  of  Life  Insurance: 

A  policy  is  not  rendered  void  by  a  statement  in  the  application 
that  the  applicant  had  never  used  intoxicating  liquors  except  occa- 
sionally, and  had  never  been  other  than  a  sober  and  temperate  man, 
where  the  agent  knew  that  the  applicant  had  taken  the  Keeley  treat- 
ment for  the  liquor  habit.  De  Witt  v.  Home  Forum  Ben.  Order,  95 
Wis.  305,  70  N.  W.  476.  And  notice  to  an  agent  authorized  to  receive 
premiums  that  an  insured  from  whom  he  receives  a  premium  is  re- 
siding in  prohibited  territory,  contrary  to  the  prohibition  of  the 
policy,  is  notice  to  the  company.  Germania  Life  Ins.  Co.  v.  Koehler, 
168  111.  293,  48  N.  E.  297;  Quinn  v.  Metropolitan  Life  Ins.  Co.,  10 
App.  Div.  483,  41  N.  Y.  Supp.  1060.  But  see  Flynn  v.  Equitable  Life 
Assur.  Soc,  67  N.  Y.  500,  where  the  court  held  the  medical  examiner 
was  not  the  insurer's  agent  in  filling  out  the  application,  where  the 
statements  in  the  application  were  stipulated  to  be  warranties. 

=<">  Phoenix  Ins.  Co.  v.  Warttemberg  (C.  C.  A.),  79  Fed.  245,  26  Ins. 
Law  J.  552;  Grattan  v.  Metropolitan  Life  Ins.  Co.,  92  N.  Y.  274; 
Swan  V.  Watertown  Fire  Ins.  Co.,  96  Pa.  St.  37;  German  Ins.  Co.  v. 
Gray,  43  Kan.  497,  8  L.  R.  A.  70;  Whitney  v.  National  Masonic  Ace. 
Ass'n,  57  Minn.  472;  Phenix  Ins.  Co.  v.  Golden,  121  Ind.  524;  Stone 
V.  Hawkeye  Ins.  Co.,  68  Iowa,  737;  Equitable  Life  Ins.  Co.  v.  Hazle- 
wood,  75  Tex.  338,  7  L.  R.  A.  217;  Smith  v.  Farmers'  &  Mechanics' 
Mut.  Fire  Ins.  Co.,  89  Pa.  St.  287;  Gray  v.  National  Ben.  Ass'n,  111' 
Ind.  531,  11  N.  E.  477;  Continental  Life  Ins.  Co.  v.  Chamberlain, 
132  U.  S.  304;  Farmers'  Ins.  Co.  v.  Williams,  39  Ohio  St.  584;  Coles 
V.  Jefferson  Ins.  Co.,  41  W.  Va.  261,  23  S.  E.  732;  O'Farrell  v.  Metro- 
politan Life  Ins.  Co.,  22  App.  Div.  495,  48  N.  Y.  Supp.  199,  695.  But 
see  New  York  Life  Ins.  Co.  v.  Fletcher,  117  U.  S.  519. 


222  AGENTS.  §  97 

where  it  names  a  person  not  owner  of  tlie  property  insured 
as  the  person  assured,  is  the  fault  of  the  agent,  the  principal 
cannot  take  advantage  of  it."*'^  Nor  can  an  insurer  repudiate 
such  fraud  or  mistake  of  its  agent,  and  thus  escape  the  obliga- 
tions of  its  contracts,  merely  because  the  assured  accepted 
in  good  faith  the  act  of  the  agent  without  examination  ;^*'2 
or  take  advantage  of  a  provision  forfeiting  the  premiums  if 
the  warranties  are  not  true;  but  upon  canceling  the  policy 
must  return  the  unearned  premium ;  ~^^  or  of  a  misstatement 
in  the  application,  if  the  insured  stated  the  facts  truthfully 
and  in  good  faith,  where  the  application  was  written  by  the 
agent  and  assented  to  by  the  assured  in  reliance  upon  the 
advice  and  sujDerior  knowledge  of  the  agent  ;^*^"*  and  knowl- 
edge that  an  insurance  agent  cannot  issue  a  policy,  does  not 
prevent  an  applicant  from  relying  upon  him  to  write  the 
answers  in  the  application.  ^^^ 

Misrepresentations  of  Agents. 

An  insurance  company  is  bound  by  the  misrepresentations 
of  its  agent  while  acting  within  the  general  scope  of  his 
authority.  It  is  liable  to  third  parties  in  a  civil  action 
for  frauds,  deceits,  concealments,  misrepresentations,  and 
omissions  of  duty  of  its  general  agent  in  the  course  of  his 
employment,  although  his  misconduct  was  not  authorized  or 
ratified  by  it,  when  his  acts  are  apparently  within  the  scope 


^"  Poughkeepsie  Sav.  Bank  v.  Manhattan  Fire.  Ins.  Co.,  30  Hun 
(N.  Y.),  473;  Vezina  v.  Canada  P.  &  M.  Ins.  Co.,  9  Quebec  Law 
Rep.  65. 

'""'  Kister  v.  Lebanon  Mut.  Ins.  Co.,  128  Pa.  St.  553,  5  L.  R.  A.  646. 

^"^  McDonald  v.  Metropolitan  Life  Ins.  Co,  (N.  H.),  38  Atl.  500. 

=""  Phoenix  Ins.  Co.  v,  Warttemberg  (C.  C.  A.),  79  Fed.  245,  26  Ins. 
Law  J.  552. 

^"'  Bowlus  V.  Phenix  Ins.  Co.,  133  Ind.  106,  20  L.  R.  A.  400. 


§  97  FRAUD  AND  MISTAKE  OF  AGENT.  223 

of  liis  authority,  tlioiigli  not  so  in  fact. -°^  Frandulcnt  mis- 
representations made  by  a  solicitor  to  an  applicant  concern- 
ing the  terms  of  the  policy  to  be  issued,  are  ground  for  re- 
scission of  the  contract,  although  the  policy  contained  a  pro- 
vision that  no  statements  made  by  the  agent  should  bind  the 
company. ^'^'^  An  insurance  company  is  estopped  to  deny 
the  renewal  of  a  policy  when  its  agents  authorized  to  make 
contracts  of  insurance  Tepresented  to  the  insured  that  it  had 
been  renewed,  and  received  and  appropriated  money  which 
they  had  good  reason  to  believe  was.  paid  to  cover  the  cost 
of  renewal.^*'^  Where  defendant's  agent  represented  that 
plaintiff  might  use  a  stove  on  board  the  vessel  insured  when 
he  was  fitting  her  up  for  use  in  the  spring,  though  his  book 
of  instructions  provided  that  the  risk  was  to  include  or- 
dinary refitting  in  the  spring,  and  that  the  policy  was  to 
specify  the  kind  of  fuel  to  be  burned,  it  was  held  that  de- 
fendant was  bound  by  the  representation,  and  the  risk  in- 
cluded the  use  of  a  stove  for  that  purpose. ^"^^  But  a  misrep- 
resentation by  a  soliciting  agent  as  to  the  conditions  of  the 
policies  of  a  rival  company,  is  not  such  fraud  as  to  relieve  the 
insured  from  his  contract  to  pa}'  a  premium,  where  the  means 
of  information  were  equally  open  to  both  parties ;  ^^°  and 
false  statements  by  an  agent  inducing  a  settlement  of  a  loss 
are  not  actionable. ^^^ 

'"'New  York  Life  Ins.  Co.  v.  McGowan,  18  Kan.  300;  Hopkins  v. 
Hawkeye  Ins.  Co..  57  Iowa,  203. 

^"  McCarty  v.  New  York  Life  Ins.  Co.,  74  Minn.  530,  77  N.  W.  426. 
And  by  talking  a  premium  note  payable  to  himself.  First  Nat.  Bank 
of  Dubuque  v.  Getz,  96  Iowa,  139,  64  N.  W.  799;  Godfrey  v.  New 
York  Life  Ins.  Co.,  70  Minn.  224,  73  N.  W.  1. 

^"^  International  Trust  Co.  v.  Norwich  Union  Fire  Ins.  Soc,  17 
C.  C.  A.  608,  71  Fed.  81;  McCabe  v.  Aetna  Ins.  Co.  (N.  D.),  81  N.  W. 
426;  post,  notes  253-255. 

"^  Lyon  V.  Stadacona  Ins.  Co.,  44  Up.  Can.  Q.  B.  472. 

""American  Steam-Boiler  Ins.  Co.  v.  Wilder,  39  Minn.  350. 

^'Thompson  v.  Phoenix  Ins.  Co.,  75  Me.  55. 


224 


AGENTS. 


§97 


While  tlie  insured  is  justified  in  loolving  to  tlie  agent  for 
information  and  directions  in  tlie  preparation  of  the  applica- 
tion, and  may  rely  on  a  reasonable  construction  j)ut  upon  an 
ambiguous  provision  of  a  policy  by  an  agent  of  the  .insurer, 
he  cannot  assert  the  representations  and  promises  of  the  agent 
against  the  plain  and  unambiguous  terms  and  stipulations 
of  the  policy.  When  the  policy  is  executed  and  delivered  it 
becomes  the  contract  of  the  parties.  In  it  all  prior  negotia- 
tions and  transactions  of  the  parties  are  merged.  If  it  is  not 
the  contract  for  which  the  insurer  bargained,  he  can  refuse 
to  accept  it;  but  he  cannot  accept  it  and  make  it  the  basis 
of  a  claim  against  the  insurer  without  subscribing  to  all  its 
terms  and  conditions. ^^^  Thus,  where  it  was  provided  in  the 
policy  that  no  representations  made  by  the  person  who  pro- 
cured the  application  therefor  should  be  binding  on  the 
company  unless  reduced  to  writing  and  presented  to  the  of- 
ficers of  the  company  at  the  home  office,  a  New  Tork  court 
held  that  statements  made  by  an  agent  and  not  reduced  to 
writing  could  not  be  proven  in  an  action  against  the  company 
for  false  representations,  and  breach  of  contract  based  there- 
on ;  that  where  a  pamphlet,  issued  by  the  company,  contained 
a  full  and  true  statement  of  the  plan  of  insurance  adopted, 
and  there  was  no  concealment  or  misrepresentation  concern- 
ing it,  contemporaneous  suggestions  made  by  the  agent  of  the 
company  as  to  the  comparative  superiority  of  the  plan  were 
recommendations  and  expressions  of  his  own  opinion,  related 
to  the  future,  and  were  not  imputable  to  the  company.^^^  In 
Maryland  an  insurer  brought  suit  to  recover  on  a  premium 


"=  Union  Mut.  Life  Ins.  Co.  v.  Mowry,  96  U.  S.  544;  Wilkins  v. 
State  Ins.  Co.,  43  Minn.  177;  Quinlan  v.  Providence  Wash.  Ins.  Co., 
133  N.  Y.  360. 

="  Simons  v.  New  York  Life  Ins.  Co.,  38  Hun  (N.  Y.),  309;  Ebert 
V.  Mutual  Reserve  Fund  Ass'n,  81  Minn.  116,  83  N.  W.  507. 


§  98  COLLUSION    BETWEEN    AGENT   AND   INSURED.  225 

note  containing  a  promise  that  tlie  maker  wonlcl  pay  "in  such 
portions,  and  at  such  time  or  times,  as  the  directors  of  said 
company  may,  agi-eeably  to  their  act  of  incorporation,  re- 
quire." The  act  made  all  insured  by  the  corporation  mem- 
bers of  it,  and  provided  that  the  balance  due  on  any  premium 
should  be  payable  in  part  or  wholly  at  the  discretion  of  the 
directors.  The  application  signed  by  insured  recited  that  the 
company  would  not  be  bound  by  any  act  or  statement  made  to 
or  by  the  agent,  restricting  its  rights  or  varying  its  w^ritten 
or  printed  contract,  unless  inserted  therein  in  writing.  Oral 
evidence  was  held  inadmissible  to  show  that  when  the  insur- 
ance was  effected  the  company's  general  agent  represented  to 
defendant  that  he  had  made  special  arrangements  with  the 
company  whereby  defendant  would  be  liable  to  pay  only  a 
certain  per  cent., on  his  note.^^^ 

Collusion  Between  Agent  and  Insured. 

g  98.  The  agent  does  not  bind  the  insurer  by  any  ^et  done  in 
furtherance  of  a  fraudulent  and  collusive  agreement  between 
him  and  the  insured. 

As  has  been  seen,  an  agent  is  appointed  to  further  the  in- 
terests of  his  principal,  and  will  not  be  permitted,  without  his 
principal's  full  knowledge  and  consent,  to  represent  the  other 
party  also  in  the  same  transaction.  No  one  can  suppose  that 
an  insurer  clothes  an  agent  with  authority  to  perpetrate  a 
fraud  upon  itself.  When  an  agent  is  perpetrating  a  fraud 
upon  his  principal  in  furtherance  of  an  agreement  between 
himself  and  any  third  party  there  is  no  agency  in  respect  to 
that  transaction;  and  to  hold  his  principal  responsible  for 
his  acts  and  in  favor  of  the  one  with  whom  the  agent  colludes, 
would  be  a  monstrous  injustice.     If  the  assured  is  a  party 

"*  Lycoming  Fire  Ins.  Co.  v.  Langley,  62  Md.  196. 
KERR,  INS.— 15 


226  AGENTS.  §  99 

to  or  an  accomplice  in,  or  participates  in  tlie  fraudulent  act, 
lie  cannot  take  advantage  of  it.^^^  Thus  where  a  false  state- 
ment was  made  by  the  insured  concerning  his  health,  and  the 
answers  "were  the  basis  of  the  contract,  which  provided  that 
if  they  were  untrue  the  policy  would  be  void,  and  the  agent 
had  knowledge  of  the  falsity,  it  was  held  that  notice  to  the 
agent  did  not  operate  as  notice  to  the  company;  that  the 
agent  had  no  authority  to  accept  false  answers  and  that  the 
false  statement  was  a  fraud  which  could  not  be  taken  advan- 
tage of  by  the  representatives  of  the  party  who  made  it.^^^  But 
it  has  been  held  where  the  insurer's  agents  solicited  a  party 
to  insure  his  life,  which  he  refused  to  do,  but  suggested  taking 
a  policy  in  his  father's  name  on  his  father's  life,  for  his  own 
benefit,  and  without  the  knowledge  of  the  father  and  with 
that  of  the  agents,  application  was  made  in  the  name  of  the 
former,  and  a  policy  issued  as  if  he  had  made  the  application, 
that  the  knowledge  and  privity  of  the  agents  prevented  the 
transaction  from  being  a  fraud  upon  the  company. ^^"^ 

Same  —  Knowledge  of  Agent  that  Wakeanties  are  False. 

§  99.  Many  authorities  hold  that  where  by  the  terms  of  the 
policy  the  statements  m.ade  in  the  application  are  warranties, 
the  agent's  knowledge  of  the  untruth  or  falsity  of  such  state- 
ments before  the  delivery  of  the  policy  does  not  bind  the  in- 
surer, except  in  cases  where  the  relation  and  status  of  the  agent 
is  fixed  by  statute. 

This  is  the  view  taken  by  the  supreme  court  of  the  United 
States  and  by  the  federal  courts.    In  the  case  of  New  York 

"'Lewis  V.  Phoenix  Mut.  Life  Ins.  Co.,  39  Conn.  100;  New  York 
Life  Ins.  Co.  v.  Fletcher.  117  U.  S.  519. 

""  Galbraith's  Adm'r  v.  Arlington  Mut.  Life  Ins.  Co.,  12  Bush 
(Ky.),  29;  Smith  v.  Cash  Mut.  Fire  Ins.  Co.,  24  Pa.  St.  323;  Lowell 
V.  Middlesex  Mut.  Fire  Ins.  Co.,  8  Cush.  (Mass.)  127;  Ketcham  v. 
American  Mut.  Ace.  Ass'n,  117  Mich.  521,  76  N.  W.  5;  Cook  v.  Stand- 
ard Life  &  Ace.  Ins.  Co.,  84  Mich.  12,  47  N.  W.  568. 

=^"  Guardian  Mut.  Life  Ins.  Co.  v.  Hogan,  80  111.  35. 


§  99  KNOWLEDGE    OF    AGENT    OF    FALSE    AVAKKANTIES.  227 

Life  Ins.  Co.  v.  Fletcher,  a  person  had  applied  in  St.  Louis 
to  an  agent  of  the  company  for  an  insurance  on  his  life.  The 
agent,  under  general  instructions,  questioned  him  on  subjects 
material  to  the  risk.  He  made  answers  which,  if  correctly 
written  down,  and  transmitted  to  the  company,  would  have 
probably  caused  it  to  decline  the  risk.  The  agent,  without 
the  Icnowledge  of  the  applicant,  wrote  down  false  answers, 
concealing  the  truth,  which  were  signed  by  the  applicant 
without  reading,  and  by  the  agent  transmitted  to  the  com- 
pany, and  the  company  thereupon  assumed  the  risk.  It  was 
conditioned  in  the  policy  that  the  application  and  answers 
were  parts  of  it,  and  it  was  stipulated  in  the  application  that 
the  answers  therein  were  warranties  and  that  no  statement 
to  the  agent  not  thus  transmitted  should  be  binding  on  his 
principal;  and  a  copy  of  the  answers  with  these  conditions 
conspicuously  printed  upon  it,  was  attached  to  the  policy. 

Field,  J.,  said :  "It  is  conceded  that  the  statements  and  rep- 
resentations contained  in  the  answers,  as  written,  of  the  as- 
sured to  the  questions  propounded  to  him  in  his  application, 
respecting  his  past  and  present  health,  were  material  to  the 
risk  to  be  assumed  by  the  company,  and  that  the  insurance 
was  made  upon  the  faith  of  them,  and  upon  his  agreement 
accompanying  them,  that  if  they  were  false  in  any  respect, 
the  policy  to  be  issued  upon  them  should  be  void.  It  is 
sought  to  meet  and  overcome  the  force  of  this  conceded  fact  ' 
by  proof  that  he  never  made  the  statements  and  representa- 
tions to  which  his  name  is  signed  ;  that  he  truthfully  answered 
those  questions ;  that  false  answers  written  by  an  agent  of  the 
company  were  inserted  in  place  of  those  actually  given,  and 
were  forwarded  with  the  application  to  the  home  office ;  and  it 
is  contended  that,  such  proof  being  made,  the  plaintiff  is  not 
estopped  from  recovering.  But  on  the  assumption  that  the  fact 
as  to  the  answers  was  as  stated,  and  that  no  further  obligation 


228  I     AGENTS.  §9^ 

rested  njDon  tlie  assured  in  connection  witli  tlie  policy,  it  is- 
not  easy  to  perceive  how  the  company  can  be  precluded  from 
setting  up  their  falsity,  or  how  any  rights  upon  the  policy 
ever  accrued  to  him.  It  is,  of  course,  not  necessary  to  argue 
that  the  agent  had  no  authority  from  the  company  to  falsif}' 
the  answers,  or  that  the  assured  could  acquire  no  right  by 
virtue  of  his  falsified  answers.  Both  he  and  the  company 
were  deceived  by  the  fraudulent  conduct  of  the  agent.  The 
assured  was  placed  in  the  position  of  making  false  repre- 
sentations in  order  to  secure  a  valuable  contract  which,  upon 
a  truthful  report  of  his  condition,  could  not  have  been  ob- 
tained. By  them  the  company  was  imposed  upon  and  in- 
duced to  enter  into  the  contract.  In  such  a  case,  assuming 
that  both  parties  acted  in  good  faith,  justice  would  require 
that  the  contract  be  canceled  and  the  premiums  returned.  As 
the  present  action  is  not  for  such  a  cancellation,  the  only  re- 
covery which  the  plaintiff  could  properly  have  upon  the  facts 
he  asserts,  taken  in  connection  with  the  limitation  upon  the 
powers  of  the  agent,  is  for  the  amount  of  the  premiums  paid, 
and  to  that  only  would  he  be  entitled  by  virtue  of  the  statute 
of  Missouri." 

"But  the  case  as  presented  by  the  record  is  by  no  means  as 
favorable  to  him  as  we  have  assumed.  It  was  his  duty  to 
read  the  application  he  signed.  He  knew  that  upon  it  the 
policy  would  be  issued,  if  issued  at  all.  It  would  introduce 
great  uncertainty  in  all  business  transactions,  if  a  party 
making  written  proposals  for  a  contract,  with  representations 
to  induce  its  execution,  should  be  allowed  to  show,  after  it 
had  been  obtained,  that  he  did  not  know  the  contents  of  his 
proposals,  and  to  enforce  it,  notwithstanding  their  falsity  as 
to  matters  essential  to  its  obligation  and  validity.  Contracts 
could  not  be  made,  or  business  fairly  conducted,  if  such  a 
rule  should  prevail ;  and  there  is  no  reason  why  it>  should  be 


§  99  KNOWLEDGE    OF  AGENT    OF    FALSE   -WARKANTIES.  229 

applied  merely  to  contracts  of  insurance.  There  is  nothing 
in  -their  nature  which  distinguishes  them  in  this  particular 
from  others.  But  here  the  right  is  asserted  to  prove  not  only 
that  the  assured  did  not  make  the  statements  contained  in  his 
answers,  but  that  he  never  read  the  application,  and  to  recover 
upon  a  contract  obtained  by  representations  admitted  to  be 
false,  just  as  though  they  were  true.  If  he  had  read  even 
llie  printed  lines  of  his  application,  he  would  have  seen  that 
it  stipulated  that  the  rights  of  the  company  could  in  no  respect 
be  affected  by  his  verbal  statements,  or  by  those  of  its  agents, 
unless  the  same  were  reduced  to  Avriting  and  forwarded  witli 
his  application  to  the  home  office.  The  company,  like  any 
other  principal,  could  limit  the  authority  of  its  agents,  and 
thus  bind  all  parties  dealing  with  them  with  knowledge  of  the 
limitation.  It  must  be  presumed  that  he  read  the  applica- 
tion, and  was  cognizant  of  the  limitations  therein  expressed. 
*  *  *  He  is,  tlierefore,  bound  by  its  statements.  *  *  * 
If  the  policy  can  stand  with  the  application  avoided,  it  must 
stand  upon  parol  statements  not  communicated  to  the  com- 
pany. This,  of  course,  cannot  be  seriously  maintained  in 
the  face  of  its  notice  that  only  statements  in  writing  for- 
warded to  its  officers  would  be  considered.  A  curious  result 
is  the  outcome  of  the  instruction.  If  the  agents  committed 
no  fraud  the  plaintiff  cannot  recover,  for  the  answers  reported 
are  not  true ;  but  if  they  did  commit  the  imputed  fraud  he 
may  recover,  although,  upon  the  answers  actually  given,  if 
truly  reported,  no  policy  would  have  issued.  Such  anoma- 
lous conclusions  cannot  be  maintained." 

"There  is  another  view  of  this  case  equally  fatal  to  a  re- 
covery. Assuming  that  the  answers  of  the  assured  were 
falsified,  as  alleged,  the  fact  would  be  at  once  disclosed  by  the 
copy  of  the  application,  annexed  to  the  policy,  to  which  his 
attention  was  called.     He  would  have  discovered  by  inspcc- 


230  AGENTS.  §  99 

tion  that  a  fraud  had  been  perpetrated,  not  only  upon  Idmself 
but  upon  the  company,  and  it  would  have  been  his  duty  to 
make  the  fact  known  to  the  company.  He  could  not  hold 
the  policy  without  approving  the  action  of  the  agents  and 
thus  becoming  a  participant  in  the  fraud  committed.  The 
retention  of  the  policy  was  an  approval  of  the  application 
and  of  its  statements.  The  consequences  of  that  approval 
cannot  after  his  death  be  avoided."  No  one  can  claim  the 
benefit  of  an  executory  contract  fraudulently  obtained,  after 
the  discovery  of  the  fraud,  without  approving  and  sanction- 
ing it.^^^     In  a  later  case  this  court  sustained  a  statutory 

'''117  U.  S.  519;  ante,  note  173;  Globe  Mut.  Life  Ins.  Co.  v.  Wolff. 
95  U.  S.  329;  Knickerbocker  Life  Ins.  Co.  v.  Norton,  96  U.  S.  240; 
Loehner  v.  Home  Mut.  Ins.  Co.,  17  Mo.  247;  Ryan  v.  World  Mut.  Life 
Ins.  Co.,  41  Conn.  168;  Lewis  v.  Phoenix  Mut.  Life  Ins.  Co.,  39  Conn. 
100;  Simons  v.  New  York  Life  Ins.  Co.,  38  Hun  (N.  Y.),  309;  Lycom- 
ing Fire  Ins.  Co.  v.  Langley,  62  Md.  196;  American  Ins.  Co.  v.  Nei- 
berger,  74  Mo.  167;  Richardson  v.  Maine  Ins.  Co.,  46  Me.  394;  Rey- 
nolds V.  Atlas  Ace.  Ins.  Co.,  69  Minn.  94;  Singleton  v.  Prudential 
Ins.  Co.,  11  App.  Div.  (N.  Y.)  403;  Phosnix  Ins.  Co.  v.  Warttemberg, 
26  Ins.  Law  J.  552  (C.  C.  A.),  79  Fed.  245;  Ketcham  v.  American 
Mut.  Ace.  Ass'n,  117  Mich.  521,  76  N.  W.  5;  Maier  v.  Fidelity  Mut. 
Life  Ass'n,  47  U.  S.  App.  322,  78  Fed.  566,  26  Ins.  Law  J.  292; 
Cleaver  v.  Traders'  Ins.  Co.,  65  Mich.  527;  Cook  v.  Standard  Life  & 
Ace.  Ins.  Co.,  84  Mich.  12;  Gould  v.  Dwelling  House  Ins.  Co.,  90 
Mich.  302;  Ward  v.  Metropolitan  Life  Ins.  Co.,  66  Conn.  227.  For 
similar  holdings  where  the  application  limits  agent's  powers,  though 
statements  are  not  warranties,  see  McCoy  v.  Metropolitan  Life  Ins. 
Co.,  133  Mass.  82;  Bernard  v.  United  Life  Ins.  Ass'n,  14  App.  Div. 
142,  43  N.  Y.  Supp.  527;  Shannon  v.  Gore  District  Mut.  Fire  Ins.  Co., 
37  Upper  Can.  Q.  B.  380  (one  judge  dissenting). 

Where  the  statements  of  insured  are  made  warranties,  knowledge 
of  insurer's  agent  that  they  are  untrue  does  not  bind  insurer.  Foot 
v.  Aetna  Life  Ins.  Co.,  61  N.  Y.  571;  Flynn  v.  Equitable  Life  Ass. 
Soc,  67  N.  Y.  500.  Otherwise  if  statements  are  not  warranties. 
Rohrbach  v.  Aetna  Ins.  Co.,  62  N.  Y.  613;  Grattan  v.  Metropolitan 
Life  Ins.  Co.,  80  N.  Y.  281,  92  N.  Y.  274.  For  holdings  adverse  to 
New  York  Life  Ins.  Co.  v.  Fletcher,  117  U.  S.  519,  see  German  Ins. 
Co.  V.  Gray,  43  Kan.  497,  8  L.  R.  A.  70;  Phenix  Ins.  Co.  v.  Golden, 


§  100  POWER    OF    AGENT    AFTER    ISSUANCE    OF    POLICY.  231 

provision  making  the  person  soliciting  tlie  insurance  tlie 
company's  agent,  notwithstanding  a  contrary  stipulation  in 
the  application,  and  held  that  in  such  case  the  rule  established 
in  New  York  Life  Ins.  Co.  v.  Fletcher  did  not  apply,  and 
that  the  act  and  knowledge  of  the  agent  bound  the  com- 
pany.^^^ 

PowEK  OF  Agen"t  After  TssuAisrcE  of  Policy. 

§  100.  An  insurance  agent  who  has  authority  to  take  risks 
and  issue  policies  can,  in  the  absence  of  known  restrictions 
placed  on  his  authority  either  by  his  principal  or  by  statutory 
enactment,  waive  the  conditions  of  the  policy  after  it  has  been 

issued.  ^20 

Following  the  rule  that  the  powers  of  an  agent  are  co-exten- 
sive with  the  business  entrusted  to  his  care,  and  that  he  is  pos- 
sessed of  all  the  authority  necessary  to  the  full  and  complete 
discharge  of  his  duty  to  his  principal,  it  has  been  held  that,  in 
the  absence  of  any  known  limitations  of  his  presumptive  au- 
thority, an  agent  invested  with  power  to  issue  policies  has  au- 
thority to  cancel  them;^^^  to  consent  to  alterations  in  the 
insured  property  ;^^^  to  consent  to  the  assignment  of  a  pol- 

121  Ind.  524;  Stone  v.  Hawkeye  Ins.  Co.,  68  Iowa,  737;  Smith  r. 
Farmers'  &  Mechanics'  Mut.  Fire  Ins.  Co.,  89  Pa.  St.  287;  Equitable 
Life  Ins.  Co.  v.  Hazlewood,  75  Tex.  338,  7  L.  R.  A.  217. 

"» Continental  Life  Ins.  Co.  v.  Chamberlain.  132  U.  S.  304. 

=='"  Niagara  Fire  Ins.  Co.  v.  Brown,  123  111.  356;  Grubbs  v.  North 
Carolina  Ins.  Co.,  108  N.  C.  472;  May,  Ins.  §  511;  Germania  Life  Ins. 
Co.  V.  Koehler,  63  111.  App.  188,  168  111.  293;  Alexander  v.  Conti- 
nental Ins.  Co.,  67  Wis.  422;  Union  Mut.  Ins.  Co.  v.  Wilkinson,  13 
Wall.  (U.  S.)  222.  As  to  right  of  agents  to  waive  conditions  of 
standard  policy,  see  Straker  v.  Phenix  Ins.  Co.,  101  W's.  413,  77 
N.  W.  753;  Anderson  v.  Manchester  Fire  Assur.  Co.,  59  Minn.  189; 
Hicks  V.  British  American  Assur.  Co.,  162  N.  Y.  284,  48  L.  R.  A.  428. 

"'  Runkle  v.  Citizens'  Ins.  Co.,  6  Fed.  143. 

'=^  Packard  v.  Dorchester  Mut.  Fire  Ins.  Co.,  77  Me.  144. 


232  AGENTS.  §  100 

icj;^^^  to  correct  tbe  policy  before  loss  so  as  to  make  it  cor- 
respond with  tlie  real  agreement  of  the  parties  ;^^^  to  consent 
to  the  sale  and  encumbering  of  the  property ;  ^^^  to  consent  to 
other  insurance  in  other  companies  contrary  to  the  conditions 
of  the  policy ;  ^^^  to  waive  the  conditions  of  the  policy  regard- 
ing the  use  of  gasoline  on  the  premises ;  ^"'^  to  consent  to  the 
removal  of  the  property  insured  ;^^^  to  waive  a  condition  of 
a  policy  avoiding  it  if  the  insured  is  not  in  sound  health  at 
date  of  execution  of  policy  ;-^^  to  bind  the  insurer  by  his  fail- 
ure to  make  a  proper  indorsement  on  the  policy,  upon  being 
inquired  of  about  the  necessity  therefor  ;^^^  to  waive  the 
conditions  of  a  life  insurance  policy  forbidding  the  assured 
to  reside  within  certain  specified  territory. ^^^ 

An  insurance  company,  whose  authorized  agent  assures  the 
assig-nee  for  creditors  of  the  insured  after  such  assignee 
has  sold  the  insured  property,  that  the  policy  need  not  be 
transferred  until  after  the  deed  is  made  to  the  purchaser,  and 
which  subsequently  claims  from  the  assignee  an  assessment 
for  another  loss,  cannot  escape  liability  for  a  loss  occurring 
before  the  execution  of  the  deed  on  the  gi'ound  that  there 

^^'Chauncey  v.  German  American  Ins.  Co.,  60  N.  H.  428;  Spring- 
field P.  &  M.  Ins.  Co.  V.  Davis  (Ky.),  37  S.  W.  582;  Frane  v.  Burling- 
ton Ins.  Co.,  87  Iowa,  288,  54  N.  W.  237;  German  Ins.  Co.  v.  Penrod. 
35  Neb.  273,  53  N.  W.  74. 

"*  Taylor  v.  State  Ins.  Co.,  98  Iowa,  521,  67  N.  W.  577;  Warner  v. 
Peoria  M.  &  F.  Ins.  Co..  14  Wis.  345. 

"^Manchester  v.  Guardian  Assur.  Co.,  151  N.  Y.  88;  Silverberg  v. 
Phenix  Ins.  Co.,  67  Cal.  36;  Rediker  v.  Queen  Ins.  Co.,  107  Mich. 
224.  65  N.  W.  105;  King  v.  Cox,  63  Ark.  204,  37  S.  W.  877. 

^»  Schomer  v.  Hekla  Fire  Ins.  Co.,  50  Wis.  575. 

^"  Arkell  v.  Commerce  Ins.  Co.  v.  69  N.  Y.  191,  7  Hun,  455. 

=="-«  New  England  F.  &  M.  Ins.  Co.  v.  Schettler,  38  111.  166. 

==»  Hilt  V.  Metropolitan  Life  Ins.  Co.,  110  Mich.  517,  68  N.  W.  300. 

*^  Allen  V.  St.  Louis  Ins.  Co.,  85  N.  Y.  473. 

"^Germania  Life  Ins.  Co.  v.  Koehler,  168  111.  293. 


§  100         POWER    OF    AGENT    AFTER    ISSUANCE    OF    POLICV.  233 

has  been  no  transfer  of  tlie  policy;-"-  and  is  bound  by  a 
notice  to  such  agent  that  the  premises  have  become  vacant, 
ahhoug-h  such  knowledge  was  imparted  to  him  as  agent  for 
the  owner  of  the  premises  for  the  purpose  of  renting  the 
same.^^^  An  agent's  authority  to  alter  or  modify  a  policy 
by  oral  or  written  agTcement,  may  be  inferred  from  a  course 
•of  dealing  acquiesced  in  by  the  principal, ^^"^^  even  though 
the  policy  provided  to  the  contrary. ^^^  But  a  waiver  of 
the  "iron  safe"  clause  by  an  insurance  agent  at  the  time  of 
issuing  a  policy  is  ineffectual,  where  the  policy  stipulates 
against  the  power  of  the  agent  to  waive  conditions. -■^'^  ^\Tien 
the  policy  provides  that  no  action  should  be  brought  upon  it 
unless  it  was  begun  within  twelve  months  after  loss  or  damage 
occurred,  and  the  assured  has  assented  to  the  stipulation  by 
accepting  the  policy,  it  is  not  in  the  power  of  local  agents 
or  of  adjusting  agents,  in  the  absence  of  express  authority 
from  the  company's  managing  officers,  to  waive  it  after  loss 
or  damage  had  occurred,  unless  fraud  has  been  perpetrated 
on  the  insured  which  induced  him  to  delay  bringing  suit  until 
after  the  bar  of  the  contract  attached. ^^^ 

Power  of  Broker  or  Solicitor  After  Delivery  of  Policy. 

An  insurance  broker  or  soliciting  agent  whose  business  is 
merely  to  solicit  insurance,  present  applications  therefor  to 

"=  Highlands  v.  Lurgan  Mut.  Fire  Ins.  Co.,  177  Pa.  St.  566. 

-'"  Clay  V.  Phoenix  Ins.  Co.,  97  Ga.  44,  25  S.  E.  417. 

=33a  j)ey  V.  Mechanics'  &  Traders'  Ins.  Co.,  88  Mo.  325. 

'"Knickerbocker  Ins.  Co.  v.  Norton,  96  U.  S.  234. 

"^Roberts  v.  Sun  Mut.  Ins.  Co.,  13  Tex.  Civ.  App.  64,  35  S.  W. 
955;  Quinlan  v.  Providence  Wash.  Ins.  Co.,  133  N.  Y.  356;  Egan  v'. 
Westchester  Ins.  Co.,  28  Or.  289,  42  Pac.  611;  East  Texas  Fire  Ins. 
Co.  v.  Kempner,  87  Tex.  229;  Sutherland  v.  Eureka  F.  &  M.  Ins.  Co., 
110  Mich.  668,  68  N.  W.  985.  Contra,  Home  Fire  Ins.  Co.  v.  Gurney, 
56  Neb.  306,  76  N.  W.  553.     See  ante,  note  199. 

■'"  Underwriters'  Agency  v.  Sutherlin,  55  Ga.  266. 


234  AGENTS.  §  101 

the  agents  of  the  insurance  company,  and  if  accepted  to  re- 
ceive the  policies,  deliver  them  to  the  insured,  and  collect 
the  premiums,* has  no  further  powers;  and  cannot  thereafter 
bind  the  insurer  by  his  consent  to  the  procuring  of  other 
insurance  on  the  property  and  cannot  waive  the  provisions  of 
the  policy  in  that  regard.  ^^''^  Nor  can  he  bind  the  company 
by  subsequently  altering  the  policy  so  as  to  make  it  payable 
to  one  other  than  the  insured.^^^ 

Known  Limitations  on  Agent's  Powee. 

§  101.  An  agent  cannot  waive  conditions  contrary  to  his 
known  instructions  or  in  violation  of  known  limitations  of  his 
power. 

Where  an  insured  applied  to  an  agent  for  a  vacancy  permit 
and  was  told  by  the  agent  that  the  insurer  would  not  allow  him 
to  issue  such  a  permit,  he  cannot  establish  a  waiver  by  the 
insurer  of  the  provisions  of  the  policy  prohibiting  vacancy 
by  proof  of  an  oral  waiver  thereafter  made  by  the  agent.  ^^* 
Nor  will  the  act  of  the  agent  in  stating  to  the  insured  that  it 
will  not  be  necessary  for  him  to  keep  a  set  of  books  in  an  iron 
safe  as  required  by  the  policy,  bind  the  insurer  where  the 
policy  requires  such  a  waiver  to  be  in  writing  and  attached 
to  the  policy.  ^■^^ 

"'Goldin  V.  Northern  Assur.  Co.,  46  Minn.  471;  Duluth  Nat.  Bank 
V.  Knoxville  Fire  Ins.  Co.,  85  Tenn.  76;  Oshkosh  Match  Works  v. 
Manchester  Fire  Assur.  Co..  92  Wis.  510,  66  N.  W.  525;  Citizens' 
Fire  Ins.  Co.  v.  Swartz,  21  Misc.  Rep.  671,  47  N.  Y.  Supp.  1107;  Queen 
-Ins.  Co.  V.  Young,  86  Ala.  424. 

"■'Duluth  Nat.  Bank  v.  Knoxville  Fire  Ins.  Co.,  85  Tenn.  76,  4 
Am.   St.  Rep.   744. 

-'^  Sutherland  v.  Eureka  F.  &  M.  Ins.  Co.,  110  Mich.  668,  68  N.  W. 
985;  McCleary  v.  Orient  Ins.  Co.  (Tex.),  32  S.  W.  583;  Jackson  v. 
Mutual  Ben.  Life  Ins.  Co.,  79  Minn.  44,  81  N.  W.  545,  82  N.  W.  366. 

-'"Roberts  v.  Willis  &  Taylor  Ins.  Co.,  13  Tex.  Civ.  App.  64,  35 
S.  Vv^.  955;  Egan  v.  Westchester  Ins.  Co.,  28  Or.  289,  42  Pac.  611;  East 
Texas  Fire  Ins.  Co.  v.  Kempner,  87  Tex.  229.     See  note  256. 


§§  102,  103         limitations  fixed  by  policy.  235 

What  Constitutes  Waiver  by  Agent. 

§  102.  The  mere  knowledge  by  an  agent  of  the  violation  of 
the  condition  of  a  policy  does  not  constitute  a  waiver.  There 
must  be  some  affirmative  act  or  word  evidencing  an  intention 
to  waive  the  rights  of  the  insurer. 

Thus  tlie  agent's  knowledge  before  the  issuing  of  the  policy, 
of  the  intention  of  the  proposed  insured  to  effect  other  insur- 
ance, will  not  render  ineffective  a  stipulation  avoiding  the 
policy  in  case  of  such  other  insurance.^^^ 

A  condition  as  to  the  future  use  of  the  insured  premises 
is  not  waived  by  the  mere  knowledge  on  the  part  of  an  agent 
of  the  insurer  that  the  property  is  occupied  for  an  unlawful 
use.  His  language  and  conduct  must  be  such  as  to  reasonably 
imply  an  intention  to  waive  such  condition  or  consent  to 
such  use;  and  the  issuing  of  a  permit  to  use  the  premises 
for  an  extra  hazardous  purpose  for  a  specified  period  does  not 
allow  the  continuation  of  the  use  beyond  the  time  specified  in 
the  permit. ^■^^ 

Same  —  Limitations  Fixed  by  Policy. 

§  103.  The  insurer  often  limits  and  defines  the  powers  of  its 
agents  by  specific  provisions  of  the  policy.  Among  the  more 
common  provisions  of  this  nature  are 

(a)  That  only  certain  agents  can  waive  the  terms  of  the  policy. 

(b)  That  no  officer  or  agent  can  waive  them. 

(e)  That  a  waiver  must  be  in  writing  indorsed  on  the  policy. 

After  a  policy  is  issued  and  accepted,  the  insured  is  bound  to 
know  and  take  notice  of  all  its  provisions  limiting  or  restrict- 
ing the  powers  of  the  agents  of  the  insurer  in  their  further 
dealings  relating  to  the  policy  and  the  property  insured. 

="  United  Firemen's  Ins.  Co.  v.  Thomas  (C.  C.  A.),  82  Fed.  406; 
Home  Ins.  Co.  v.  Wood,  50  Neb.  381,  69  N.  W.  841;  Sutherland  v. 
Eureka  F.  &  M.  Ins.  Co.,  110  Mich.  668;  Cable  v.  United  States  Ins. 
Co.,  Ill  Fed.  31. 

=*'Betcher  v.  Capital  Fire  Ins.  Co.,  78  Minn.  240;  Concordia  Fire 
Ins.  Co.  Y.  Johnson,  4  Kan.  App.  7,  45  Pac.  722.  See  Straker  v. 
Phenix  Ins.  Co.,  77  N.  W.  752. 


236  AGENTS.  §  103 

If  one  dealing  wltli  an  agent  knows  tliat  lie  is  acting  under 
a  circumscribed  or  limited  authority  and  that  his  act  is  out- 
side of  and  transcends  the  authority  conferred,  the  principal  is 
not  bound ;  it  is  immaterial  whether  the  agent  is  a  general  or 
a  special  one.  Where  restrictions  upon  the  agent's  power 
apj)ear  in  a  policy,  the  insured  is  bound  to  take  notice  of 
tJiem;  and  in  the  absence  of  evidence  tending  to  show  that 
his  powers  have  been  enlarged  by  the  usage  of  the  company, 
its  course  of  business,  or  by  its  consent  express  or  implied, 
the  policy  must  control  and  the  authority,  as  limited,  must 
he  regarded  as  the  measure  of  the  agent's  power,^^^  e.  g.  if 
an  open  policy  provides  only  for  the  insurance  of  property 
owned  or  held  in  trust  or  on  commission,  or  sold  and  not 
delivered,  an  agTeement  on  the  part  of  the  agent  to  insure 
property  not  coming  within  such  language  is  void.^"*^^  Thus 
where  a  policy  in  terms  denies  to  any  agent,  local  or  general, 
the  power  to  waive  any  of  its  conditions  and  reserves  that 
authority  solely  to  the  company  or  some  officers  of  the  com- 
pany, a  waiver  by  an  agent  cannot  bind  the  company. ^^'*  A 
provision  that  no  agent  is  empowered  to  waive  any  of  the 

="Quinlan  v.  Providence  Wash.  Ins.  Co.,  133  N.  Y.  356;  Wilkins 
V.  State  Ins.  Co.,  43  Minn.  177;  Roberts,  Willis  &  Taylor  Co.  v.  Sun 
Mut.  Ins.  Co.,  13  Tex.  Civ.  App.  64,  35  S.  W.  955;  Fowler  v.  Preferred 
Ace.  Ins.  Co.,  100  Ga.  ■830,  28  S.  E.  398;  Monitor  Mut.  Fire  Ins.  Co. 
V.  Buffum,  115  Mass.  343;  Cleaver  v.  Traders'  Ins.  Co.,  65  Mich. 
527,  32  N.  W.  660;  Merserau  v.  Phoenix  Mut.  Life  Ins.  Co.,  66  N.  Y. 
274;  Catoir  v.  American  Life  Insurance  &  Trust  Co.,  33  N.  J.  Law, 
487;  Northwestern  Nat.  Ins.  Co.  v.  Mize  (Tex.),  34  S.  W.  670;  Bur- 
lington Ins.  Co.  V.  Gibbons,  43  Kan.  15,  19  Am.  St.  Rep.  118;  Weidert 
V.  State  Ins.  Co.,  19  Or.  261,  20  Am.  St.  Rep.  809.  But  see  Home  Ins. 
Co.  V.  Gilman.  112  Ind.  7. 

=«»  First  Nat.  Bank  of  Waxahachie  v.  Lancashire  Ins.  Co.,  62  Tex. 
461. 

"^Marvin  v.  Universal  Life  Ins.  Co.,  85  N.  Y.  278;  Hale  v.  Me- 
chanics' Mut.  Fire  Ins.  Co.,  6  Gray  (Mass.),  169;  Wilkins  v.  State 
Ins.  Co.,  43  Minn.  177. 


§  104  ONLY    CERTAIN    OFFICERS    CAN    WAIVE.  237 

conditions  of  the  policy  without  special  authorization  refers 
to  special,  not  general,  agents. ^^^  These  limitations  are  for 
the  benefit  of  the  company  and  may  be  insisted  upon  or 
waived  by  it.  The  company  is  not  bound  to  act  upon  its 
declarations  in  the  policy  that  its  agents  have  limited  powers ; 
it  may  at  any  time  by  course  of  dealing  or  by  contract  give 
them  unlimited  authority. ^^^  A  restriction  in  a  policy  upon 
an  agent's  authority  cannot  be  construed  to  refer  to  his  acts 
or  knowledge  prior  to  the  delivery  of  the  policy.^^'^ 

Same  —  Stipulations    that    Only    Certain  Officers  Can 

Waive. 

§  104.  A  condition  in  a  policy  of  insurance  that  its  terms 
can  be  changed  by  certain  agents  only,  is  valid. 

The  forfeiture  of  a  contract  of  insurance,  or  a  condition 
w^hich  is  essential  to  the  continuance  of  such  contract,  cannot 
be  waived  by  an  agent  when  the  contract  itself  declares 
(a)  that  he  shall  not  have  power  to  waive  it,  or,  (b)  that 
only  certain  officers  of  the  company,  which  do  not  include  him, 
shall  have  such  powder;  unless  it  appears  that  subsequent 
to  the  execution  of  the  contract,  authority  has  been  given  to 
the  agent  to  w- aive  the  forfeiture  or  condition,  or  the  company 
has  knowingly  permitted  him  to  exercise  such  power. ^^^  In 
a  Wisconsin  case  the  policy  w^as  issued  to  the  owner,  payable 
to  a  mortgagee  as  interest  should  appear,  conditioned  that  if 
the  property  should  thereafter  be  incumbered  without  the 

=*'  Carrigan  v.  Lycoming  Fire  Ins.  Co.,  5-3  Vt.  418. 

^^^  Knickerbocker  Life  Ins.  Co.  v.  Norton,  96  U.  S.  234;  Godfrey  v. 
New  York  Life  Ins.  Co.,  70  Minn.  224,  73  N.  W.  1. 

="  Grouse  v.  Hartford  Fire  Ins.  Co.,  79  Mich.  249,  44  N.  W.  497; 
Zell  V.  Herman  Farmers'  Mut.  Ins.  Co.,  75  Wis.  521,  44  N.  W.  828. 

="  Porter  v.  United  States  Life  Ins.  Co.,  160  Mass.  183;  Lyndsay 
V.  Niagara  Dist.  Mut.  Fire  Ins.  Co.,  28  Up.  Can.  Q.  B.  326;  Wilkins 
V.  State  Tns.  Co..  43  Minn.  177. 


238  AGENTS.  §  105 

consent  of  insurer's  secretary  in  writing,  tlie  policy  was  to 
become  void.  It  was  expressed  in  the  policy  '"tliat  no  of- 
ficer, agent  or  employe,  or  any  person  or  persons,  except 
the  secretary  in  writing,  can  in  any  manner  waive  any  of  the 
conditions  of  this  policy,  which  is  made  and  accepted  on  the 
above  express  conditions."  During  the  life  of  the  policy 
the  mortgage  existent  when  the  policy  issued  was  paid,  and 
another  mortgage  was  issued  without  consent.  Held,  that 
a  local  agent  could  not  bind  his  principal  by  verbal  consent 
to  the  execution  of  a  second  mortgage.^^^ 

Same  —  Stipulations  that  No  Officer  Can  Waive. 

§  105.  A  provision  "  that  no  ofacer,  agent  or  representative 
can  waive  any  of  the  provisions  except  in  writing  indorsed 
thereon  "  is  void. 

This  restriction  is  so  broad  that  it  applies  alike  to  every 
officer,  agent  and  representative  of  the  company;  and,  as  a 
corporation  can  only  act  through  such  agencies,  the  substance 
of  the  provision  is  that  the  company  shall  not  be  held  to  have 
waived  any  of  the  terms  or  conditions  of  the  policy  unless 
its  waiver  be  expressed  by  a  written  endorsement  on  the  pol- 
icy.    That  is  to  say,  in  other  words,  that  one  of  the  parties 

^"Hankins  v.  Rockford  Ins.  Co..  70  Wis.  1,  35  N.  W.  34;  Merserau 
V.  Phoenix  Mut.  Life  Ins.  Co.,  66  N.  Y.  274;  Marvin  v.  Universal  Life 
Ins.  Co.,  85  N.  Y.  278;  O'Reilly  v.  Corporation  of  London  Assur.  Co., 
101  N.  Y.  575;  Kyte  v.  Commercial  Union  Assur.  Co.,  144  Mass.  43; 
Mclntyre  v.  Michigan  State  Ins.  Co.,  52  Mich.  188;  Bowlin  v.  Hekla 
Fire  Ins.  Co.,  36  Minn.  433;  Shuggart  v.  Lycoming  Fire  Ins.  Co.,  55 
Cal.  408;  Enos  v.  Sun  Ins.  Co.,  67  Cal.  621;  Leonard  v.  American  Ins. 
Co.,  97  Ind.  299;  Winnesheik  Ins.  Co.  v.  Holzgrafe,  53  111.  516; 
Universal  Mut.  Fire  Ins.  Co.  v.  Weiss,  106  Pa.  St.  20;  Pottsville  Mut. 
Fire  Ins.  Co.  v.  Minnequa  Springs  Imp.  Co.,  100  Pa.  St.  137;  Stark 
County  Mut.  Ins.  Co.  v.  Hurd,  19  Ohio,  149;  Evans  v.  Trimountain 
Mut.  Fire  Ins.  Co.,  9  Allen  (Mass.),  329,  But  see  Planters'  Ins.  Co. 
V.  Rowland,  66  Md.  236. 


§  1U5  STIPULATIONS    THAT   NO    OFFICER   CAN    WAIVE.  230 

to  a  contract,  wliicli  is  not  required  bj  law  to  be  in  writing, 
cannot,  subsequent  to  tlie  making  of  tbe  contract,  waive,  by 
parol,  provisions  which  had  been  incorporated  into  the  con- 
tract for  his  own  benefit.  A  contracting  party  cannot  so  tic 
his  own  hands  and  so  restrict  his  own  legal  capacity  for  future 
action,  that  he  has  not  the  power  even  with  the  assent  of  tlie 
other  party  to  bind  or  obligate  himself  by  his  further  action 
or  agreement  contrary  to  the  terms  of  the  wi'itten  contract. 
Except  where  prevented  by  the  operation  of  the  Statute  of 
Frauds,  or  some  equivalent  prohibition,  a  policy  of  insurance 
may  be  made  or  changed  by  parol.  A  written  agreement  is 
(subject  to  these  exceptions)  of  no  higher  legal  degi*ee  than 
a  parol  one,  and  either  may  vary  or  discharge  the  other ;  and 
one  who  has  agreed  that  he  will  only  contract  by  writing  in 
a  certain  way  does  not  thereby  preclude  himself  from  making 
a  parol  bargain  to  change  it.  There  is  no  more  force  in  an 
agreement  in  writing  not  to  agree  by  parol,  than  in  a  parol 
agreement  not  to  contract  in  writing.  Such  a  provision  does 
not  in  any  way  limit  the  legal  capacity  of  an  insurer  to  act 
through  its  authorized  agents  in  the  ordinary  manner,  nor 
prohibit  them  from  waiving  such  provisions  or  conditions 
as  they  could  otherwise  waive.^^*^ 

Contra. 

Speaking  of  this  provision  the  supreme  court  of  Iowa  re- 
cently said :     "There  is  some  conflict  in  the  authorities  as  to 

'""•Westchester  Fire  Ins.  Co.  v.  Earle,  33  Mich.  143;  Lamberton  v. 
Connecticut  Fire  Ins.  Co.,  39  Minn.  131;  Joyce,  Ins.  §  433;  American 
Cent.  Ins.  Co.  v.  McCrea,  8  Lea  (Tenn.),  513;  Von  Bories  v.  United 
Life  F.  &  M.  Ins.  Co.,  8  Bush  (Ky.),  133;  Maryland  Fire  Ins.  Co.  v. 
Gusdorf,  43  Md.  50G;  Kniclterboclter  Life  Ins.  Co.  v.  Norton,  96 
U.  S.  234;  Stolle  v.  Aetna  F.  &  M.  Ins.  Co.,  10  W.  Va.  546;  Carruge 
V.  Atlantic  Fire  Ins.  Co.,  40  Ga.  135;  Wakefield  v.  Orient  Ins.  Co.,  50 
Wis.  532;  Whited  v.  Germania  Fire  Ins.  Co.,  76  N.  Y.  415;  Morrison 
V.  Insurance  Co.  of  North  America,  69  Tex.  353. 


240  AGENTS.  §  10(> 

wlietLer  this  kind  of  an  agreement  or  provision  is  valid  or  not, 
But  we  think  the  decided  weight  is  in  favor  of  the  proposi- 
tion that  it  is.  *  *  *  We  do  not  mean  to  be  under- 
stood as  holding  that  the  company  could  not  itself,  through 
its  general  agents,  waive  these  provisions  of  the  policy.  What 
we  do  hold  is  that  these  provisions  *  *  *  are  a  limita- 
tion upon  the  power  of  its  local,  special,  and  adjusting 
agents,  of  which  the  plaintiffs  had,  or  are  presumed  to  have 
had,  knowledge;  and  that  any  agreement  or  waiver  which 
they  attempted  to  make  would  not  be  binding  upon  the  com- 
pany because  not  authorized."  ^^^ 

Same  —  Stipulations  that  Waiyee  Must  be  in  Wkiting. 

§  106.  An  agent  who  is  authorized  to  indorse  a  written 
waiver  or  consent  to  a  violation  of  the  conditions  of  a  policy 
is  sometimes  held  to  have  authority  to  waive  the  same  condi- 
tions 

(a)  By  an  oral  agreement  to  waive; 

(b)  By  acts  which  in  law  amount  to  waiver; 

(c)  By  representations  which  will  estop  the  insurer  from  de- 

nying the  waiver. 

The  decisions  on  this  question  are  irreconcilable.  In  Ne- 
braska, Arkansas,  Iowa,  New  Jersey,  and  Missouri,  the  au- 
thority of  the  agents  of  the  insured  to  Avaive  the  conditions 

==^iRuthven  v.  American  Fire  Ins.  Co.,  92  Iowa,  326,  60  N.  W. 
666,  citing  Burlington  Ins.  Co.  v.  Gibbons,  43  Kan.  15,  22  Pac.  1010; 
Weidert  v.  State  Ins.  Co.,  19  Or.  261,  24  Pac.  242;  Cleaver  v.  Traders' 
Ins.  Co.,  71  Mich.  414,  39  N.  W.  571;  Quinlan  v.  Providence  Wash. 
Ins.  Co.,  133  N.  Y.  360;  Smith  v.  Niagara  Fire  Ins.  Co.,  60  Vt.  682, 
15  Atl.  353;  Walsh  v.  Hartford  Fire  Ins.  Co.,  73  N.  Y.  5;  Hankins  v. 
Rockford  Ins.  Co.,  70  Wis.  1,  35  N.  W.  34;  Gould  v.  Dwelling-House 
Ins.  Co.,  90  Mich.  302,  51  N.  W.  455;  Clevenger  v.  Mutual  Life  Ins. 
Co.,  2  Dak.  114,  3  N.  W.  313;  Enos  v.  Sun  Ins.  Co.,  67  Cal.  621,  8  Pac. 
379;  Kyte  v.  Commercial  Assur.  Co.,  144  Mass.  43,  10  N.  E.  518; 
Kirkman  v.  Farmers'  Ins.  Co.,  90  Iowa,  457,  57  N.  W.  953;  O'Leary 
V.  Merchants'  &  Bankers'  Mut.  Ins.  Co.,  100  Iowa,  173,  69  N.  W.  420. 


§  106  WHEN   WAIVER   MUST   BE    IN    WRITING.  2il 

of  a  policy  may  be  exercised  verbally,  notwitlistanding  a  pro- 
vision in  the  policy  tbat  such  waiver  can  be  made  only  by  a 
Avritten  indorsement  on  the  policy. -^^  Some  of  the  early 
New  York  cases  strengthen  this  view.  Thus  where  it  was 
stipulated  in  a  policy  that  "The  generating  or  evaporating 
within  the  building  or  contiguous  thereto  of  any  substance 
for  a  burning  gas,  or  the  use  of  gasoline  for  lighting,  is 
prohibited,  unless  by  special  agreement  indorsed  on  this 
policy,"  and  the  agents  who  took  the  risk  gave  oral  pennis- 
sion  to  insured  to  put  in  a  tank  for  making  gasoline  if  it  was 
placed  fifty  feet  from  the  building,  and  were  present  when 
it  was  put  in,  it  was  held  that  this  was  a  waiver  which  bound 
the  company;  and  consent  to  putting  in  the  apparatus  im- 
plied consent  to  use  the  product  thereof  for  lighting  the 
building.  ^^^ 

A  representation  by  an  agent  that  the  policy  would  be  made 
to  cover  the  change  of  title,  and  would  cover  the  interest  of 
one  as  mortgagee  where  it  had  before  covered  his  interest  as 
owner,  was  held*  to  bind  the  company  under  the  following  cir- 
cumstances.    It  was  provided  in  the  policy,  that  if  the  prop- 

"»Phenix  Ins.  Co.  v.  Covey,  41  Neb.  724,  60  N.  W.  12;  Young  v. 
Hartford  Fire  Ins.  Co.,  45  Iowa,  377;  Wilson  v.  Commercial  Union 
Assur.  Co.,  51  S.  C.  540,  29  S.  E.  245  (vacancy) ;  Phoenix  Ins.  Co.  v. 
Public  Parks  Amusement  Co.,  63  Ark.  187,  37  S.  W.  959;  Hamilton 
V.  Home  Ins.  Co.,  94  Mo.  353;  Breckinridge  v.  American  Cent.  Ins. 
Co.,  87  Mo.  62;  Hilt  v.  Metropolitan  Life  Ins.  Co.,  110  Mich.  517,  68 
N.  W.  300;  Beebe  v.  Ohio  Farmers!  Ins.  Co.,  93  Mich.  514,  53  N.  W. 
818;  Smith  v.  German  Ins.  Co.,  107  Mich.  270,  65  N.  W.  236;  Radiker 
V.  Queen  Ins.  Co.,  107  Mich.  224,  65  N.  W.  105;  Redstrake  v.  Cumber- 
land Mut.  Fire  Ins.  Co.,  44  N.  J.  Law,  294;  O'Leary  v.  German  Amer- 
ican Ins.  Co.,  100  Iowa,  390,  69  N.  W.  686;  Morrison  v.  Insurance  Co. 
of  North  America,  69  Tex.  353. 

^'^Arkell  v.  Commerce  Ins.  Co.,  7  Hun  (N.  Y.),  455;  affirmed,  on 
the  ground  that  the  tank  was  not  "contiguous,"  69  N.  Y.  191;  Rich- 
mond V.  Niagara  Fire  Ins.  Co.,  79  N.  Y.  230. 

KERR,  INS.— 16 


242  AGENTS.  §  106 

erty  insTircd  slioiilcl  be  sold,  or  if  tlie  interest  of  tlie  assured 
was  not  truly  stated,  the  policy  should  be  void ;  that  anything 
less  than  a  distinct,  specific  agreement,  indorsed  on  the  jwlicy, 
should  not  be  construed  as  a  ^vaiver  of  any  of  its  conditions ; 
and  that  any  person  who  may  have  procured  the  insurance 
to  be  taken  "shall  be  deemed  to  be  the  agent  of  the  assured, 
and  not  of  the  company  under  any  circumstances  whatever, 
or  in  any  transaction  relating  to  this  insurance."  The  policy 
was  obtained  through  H.,  and  countersigned  by  him  as  de- 
fendant's agent.  It  was  twice  renewed ;  each  renewal  receipt, 
signed  by  defendant's  president  and  secretary,  contained 
this:  "Not  valid  unless  countersigned  by  the  duly  author- 
ized agent  of  the  company."  H.  countersigned  each  as 
agent,  and  received  and  forwarded  the  premiums  to  defendant. 
On  making  application  for  a  third  renewal,  plaintiff  noti- 
fied H.  that  he  had  sold  the  property,  and  his  interest  was 
that  of  mortgagee.  H.  received  the  premium,  gave  a  re- 
newal certificate,  and  said  he  would  make  it  all  right.  There 
was  no  indorsement  made  on  the  policy  or  other  notice  given. 
Held,  that  H.,  being  the  authorized  agent  of  defendant,  it 
was  bound  by  his  acts ;  they  amounted  to  a  waiver  of  the  con- 
ditions in  the  policy,  and  plaintiff's  interest  as  mortgagee 
was  insured  by  the  last  renewal  receipt.  ^^^  An  insurer  is 
chargeable  with  the  omission  of  its  agent  authorized  to  issue 
policies,  to  make  a  promised  indorsement  of  the  existence  of 
a  chattel  mortgage  upon  the  property  at  the  request  of  an  in- 
sured, who  is  unable  to  read  and  relies  upon  the  assurance 
given  him  and  also  leaves  the  policy  in  the  custody  of  the 
agent.  ^^^ 

^=*Whited  V.  Germania  Fire  Ins.  Co.,  76  N.  Y.  415,  13  Hun  (N.  Y.), 
191;  Redstrake  v.  Cumberland  Mut.  Fire  Ins.  Co.,  44  N.  J.  Law,  294. 

==■' McGuire  v.  Hartford  Fire  Ins.  Co.,  7  App.  Div.  575,  40  N.  Y. 
Supp.  300;  McCabe  v.  Aetna  Ins.  Co.  (N.  D.),  81  N.  W.  426;  Phoenix 
Ins.  Co.  V.  Copeland,  86  Ala.  551,  4  L.  R.  A.  848. 


§  107  when  waiver  must  be  i^'  wkitixg.  243 

Same  —  The  Bi:tter  Rule. 

§  107.  But  the  better  rule  is  that  an  oral  waiver  by  a  local 
agent  after  the  delivery  of  the  policy  is  not  binding  upon  the 
insurer  if  the  policy  requires  such  waiver  to  be  in  writing. 

Where  a  policy  permits  an  agent  to  exercise  a  specified 
authority,  but  prescribes  that  the  principal  shall  not  be 
bound  unless  the  execution  of  the  power  should  be  evidenced 
by  a  "VATitten  indorsement  upon  the  policy,  the  condition  is 
of  the  essence  of  the  authority,  and  the  consent  or  act  of  the 
agent  not  so  indorsed  is  void.^^^  Speaking  on  this  question 
the  supreme  court  of  Wisconsin  recently  said :  "We  know  of 
no  good  reason  that  should  cause  us  to  declare  such  a  cove- 
nant or  stipulation  void.  It  is  a  plain  and  exact  stipulation 
of  the  contract  upon  which  the  minds  of  the  parties  met,  and 
is  as  binding  upon  the  assured  as  any  stipulation  in  the  policy. 
When  the  assured  sought  to  have  the  local  agent  ^vaive  the 
forfeiture,  he  knew  by  the  terms  of  his  policy  that  the  agent 
had  no  power  or  authority  to  waive  it  unless  it  was  indorsed 
on  the  policy  in  writing.  This  provision  was  a  clear  restric- 
tion and  limitation  of  his  power.  It  was  the  fault  of  the 
insured  that  he  failed  or  omitted  to  have  the  waiver  in- 
dorsed. The  courts  cannot  relieve  a  party  from  his  neglect 
to  abide  by  the  stipulations  of  his  contract,  nor  make  a  new 
contract  for  him  different  from  what  he  made  himself."  ^^"^ 

""Walsh  V.  Hartford  Fire  Ins.  Co.,  73  N.  Y.  10;  Marvin  v.  Uni- 
versal Life  Ins.  Co.,  85  N.  Y.  278;  Quinlan  v.  Providence  Wash.  Ins. 
Co.,  123  N.  Y.  360. 

-"  Oshkosh  Match  Works  v.  Manchester  Fire  Assur.  Co.,  92  Wis. 
510,  66  N.  W.  525;  Carey  v.  German  American  Ins.  Co.,  84  Wis.  80, 
54  N.  W.  20;  Egan  v.  Westchester  Ins.  Co.,  2^  Or.  289,  42  Pac.  611; 
East  Texas  Fire  Ins.  Co.  v.  Kempner,  87  Tex.  229;  Northwestern 
Nat.  Ins.  Co.  v.  Mize  (Tex.),  34  S.  W.  670;  O'Leary  v.  Merchants' 
&  Bankers'  Mut.  Ins.  Co.,  100  Iowa,  173,  69  N.  W.  420;  Gould  v. 
Dwelling  House  Ins.  Co.,  90  Mich.  302,  51  N.  W.  455. 


244:  ^  AGENTS.  §§  108,  10i> 

Same  —  Stakdaed  Policies. 

§  108.  No  agent  can  waive  any  of  the  provisions  of  a  stand- 
ard policy  except  in  the  manner  therein  provided. 

An  agent  cannot  waive  any  of  tlie  conditions  of  a  standard 
policy,  nor  the  manner  of  waiving  therein  required.  And 
where  the  standard  policy  provides  "no  officer  *  *  * 
shall  have  power  or  he  deemed  or  held  to  have  waived  any 
provision  or  condition  imless  such  waiver,  if  any,  be  written 
upon  or  attached  hereto,"  it  prohibits  a  waiver  in  any  other 
manner.^'^^ 

Collection"  of  Premiums  and  Renewals. 

§  109.  An  agent  empowered  to  issue  policies  has,  in  the  ab- 
sence of  some  known  limitation  on  his  power  in  that  particu- 
lar, authority  to  collect  and  receive  premiums  and  renewals^ 
and  to  give  reasonable  credit  therefor. 

It  would  seem  well  settled  by  the  great  weight  of  authority, 
that,  in  view  of  the  general  customs  and  usage  of  insurance 
agents,  at  least  in  the  case  of  stock  companies,  a  person  deal- 
ing with  an  agent  clothed  with  power  to  issue  policies,  has 
a  right  to  assume,  in  the  absence  of  notice  to  the  contrary, 
that  the  agent  has  authority  to  accept  the  payment  of  pre- 
miums and  to  exercise  his  judgment  as  to  mode  of  pay- 
ment, and  to  give  a  reasonable  credit  therefor.  Thus  an 
agent  may  accept  cheeks  or  notes  ;^^^  and  may  interpret  the- 

="^'Straker  v.  Phoenix  Ins.  Co.,  101  Wis.  413,  77  N.  W.  753;  Ander- 
son V.  Manchester  Fire  Assur.  Co.,  59  Minn.  189;  Wadhams  v.  West- 
ern Assur.  Co.,  117  Mich.  514,  76  N.  W.  6;  Hicks  v,  British  America 
Assur.  Co.,  62  N.  Y.  284,  48  L.  R.  A.  425;  Quinlan  v.  Providence 
Wash.  Ins.  Co..  133  N.  Y.  356. 

"=» Franklin  Ins.  Co.  v.  Colt,  20  Wall.  (U.  S.)  560;  Jones  v.  New 
York  Life  Ins.  Co.,  168  Mass.  245;  Tayloe  v.  Merchants'  Fire  Ins. 
Co.,  9  How.  (U.  S.)  390;  Miller  v.  Brooklyn  Life  Ins.  Co.,  12  Wall. 
(U.  S.)  285.  Or  may  agree  that  payment  be  deferred,  Southern  Life 
Ins.  Co.  V.  Booker,  9  Heisk.  (Tenn.)  607;  Slobodisky  v.  Phenix  Ins. 


■§  109  COLLECTION    OF    I'KEMIUMS    AND    KENEWALS.  245 

contract  as  to  tlie  day  the  premimn  falls  due  so  as  to  Liud  tlie 
company. ^''^  He  may  extend  credit  to  the  insured  for  tho 
payment  of  the  premium  and  charge  himself  with  the  same  ;^^^ 
€ven  although  he  retains  the  renewal  receipt  at  the  request  of 
the  insured  j^*^^  and  the  insurer  will  be  bound  although  the 
property  insured  be  destroyed  before  the  term  of  credit  has 
oxpired.^^^  He  may  bind  the  insurer  by  his  acts  and  declara- 
tions inducing  a  member  of  a  mutual  benefit  association  to  be- 
lieve that  the  time  for  payment  of  assessments  would  be 
•extended  as  on  former  occasions,  even  though  the  manager 
of  the  association  has  told  assured  that  such  assessments 
were  overdue.  ^''^  A  mere  collector  for  a  life  insurance  com- 
pany has  no  implied  authority  to  waive  the  requirement  of  a 

Co.,  53  Neb.  816,  74  N.  W.  271;  Bodine  v.  Exchange  Fire  Ins.  Co., 
51  N.  Y.  117;  New  York  Cent.  Ins.  Co.  v.  National  Protection  Ins. 
Co.,  20  Barb.  (N.  Y.)  468;  Sheldon  v.  Connecticut  Mut.  Life  Ins.  Co., 
25  Conn.  207;  Chickering  v.  Globe  Mut.  Life  Ins.  Co.,  116  Mass.  321; 
Home  Ins.  Co.  v.  Curtis,  32  Mich.  402.  But  see  Hambleton  v.  Home 
Ins.  Co.,  6  Biss.  91,  Fed.  Cas.  No.  5,972.  But  the  agent  cannot  bind 
the  insurer  by  an  agreement  to  give  credit  for  the  premium  con- 
trary to  the  terms  of  the  policy,  in  the  absence  of  some  usage  or 
special  instructions  to  the  contrary.  Wilkins  v.  State  Ins.  Co.,  43 
Minn.  177;  Carter  v.  Cotton  States  Life  Ins.  Co.,  56  Ga.  237;  Globe 
Mut.  Life  Ins.  Co.  v.  Wolff,  95  U.  S.  329;  Cyrenius  v.  Mutual  Life 
Ins.  Co.,  18  App.  Div.  599,  46  N.  Y.  Supp.  549;  Pottsville  Mut.  Fire 
Ins.  Co.  V.  Minneaua  Springs  Imp.  Co.,  100  Pa.  St.  137. 

^^'^  Campbell  v.  International  Life  Assur.  Soc,  4  Bosw.  (N.  Y.)  298. 
See  ante,  note  13. 

="  Mechanics'  &  Traders'  Ins.  Co.  v.  Mutual  Real  Estate  &  Bldg. 
Ass'n,  98  Ga.  262,  25  S.  E.  457;  Farragut  Fire  Ins.  Co.  v.  Shepley 

(Minn.),  80  N.  W.  976. 
^-^Tennant  v.  Travellers'  Ins.  Co.,  31  Fed.  322. 
="'  Squier  v.  Hanover  Fire  Ins.   Co.,  18  App.   Div.  575,  46  N.   Y. 

Supp.  30. 

^"Sweetser  v.  Odd  Fellows  Mut.  Aid  Ass'n,   117  Ind.  97;   Zell  v. 

Herman  Farmers'  Mut.   Ins.  Co.,  75  Wis.  521;    Knickerbocker  Life 

Ins.  Co.  V.  Norton,  96  U.  S.  234;  Wyman  v.  Phoenix  Mut.  Life  Ins. 

Co.,  119  N.  Y.  274. 


246  AGENTS.  §  110 

policy  as  to  tlie  time  of  tlie  payment  of  premiums.^^^  An 
agent  cannot,  by  giving  an  ante-dated  receipt  for  a  premium, 
revive  a  policy  whicli  has  become  forfeited  for  non-payment 
according  to  tbe  terms  of  the  contract. ^^^  He  has  no  implied 
authority  to  accept  payment  of  premium  notes  received  by 
him  and  transmitted  to  the  company  and  not  in  his  possession 
at  the  time  of  payment.  ^^'^ 

Stipulations  ix  Policy  Against  Giving  Credit. 

§  110.  Many  policies  in  terms  deny  to  an  agent  the  right  to 
give  credit  for  premiums.  Such  stipulations  in  a  policy  are 
usually  held  valid;  but  being  inserted  by  the  insurer  for  its 
own  benefit,  they  may  be  waived  by  it. 

Any  Kmitation  on  the  power  of  an  agent  to  collect  premiums 
or  give  credit  therefor  when  brought  to  the  knowledge  of  the 
assured  is  effectual.  The  insurer  can  hedge  the  agent  round 
with  restrictions  and  limitations,  and  may  waive  the  same  by 
an  opposite  course  of  dealing.  Thus,  the  company  may  by 
its  conduct  estop  itself  from  asserting  the  provision  of  its 
pohcy  forbidding  its  agents  to  accept  anything  but  cash  in  pay- 
ment of  premiums. ^^^^ 

In  Wilkins  v.  State  Ins.  Co.,^*'^  the  agent  of  the  defendant 
whose  general  duties  were  to  solicit  insurance,  fill  up  blanks 
in  printed  policies  already  signed  by  the  general  officers  of  the 
company  and  left  in  his  possession,  countersign  and  deliver 
the  same,  and  collect  and  remit  the  premiums,  had  assumed  to 
waive  irdmediate  payment  and  had  delivered  the  policy  in  suit 

=^»  Bryan  v.  National  Life  Ins.  Ass'n,  21  R.  I.  149,  42  Atl.  513.  See 
note  259. 

=""  Diboll  V.  Aetna  Life  Ins.  Co.,  32  La.  Ann.  179. 

""  Long  Creek  Bldg.  Ass'n  v.  State  Ins.  Co.,  29  Or.  569,  46  Pac.  366. 

=""  Godfrey  v.  New  York  Life  Ins.  Co.,  70  Minn.  224,  73  N.  W.  1. 

=^'43  Minn.  177;  Jackson  v.  Mutual  Ben.  Life  Ins.  Co.,  79  Minn. 
44,  81  N.  W.  545.  82  N.  W.  366, 


§  110        STIPULATIONS    IN    POLICY    AGAINST    GIVING    CREDIT. 


247 


to  the  plaiiitifP,  giving  the  Latter  a  temporary  credit  for  the 
premium.  The  premium  had  not  been  paid  before  the  fire 
occurred.  The  court  said :  "The  question  is  whether  the 
company  was  bound  by  the  act  of  the  agent  in  waiving  im- 
mediate payment  of  the  premium,  and  giving  plaintiff  credit. 
The  policy  contains  a  provision  that  'no  insurance  shall  be 
considered  as  binding  until  actual  payment  of  the  premium.* 

*  *  *  It  is  the  undoubted  right  of  the  company,  as  in  the 
case  of  any  principal,  to  impose  a  limitation  upon  the  au- 
thority of  its  agents.  And  it  is  as  elementary  as  it  is  reason- 
able that  if  an  agent  exceeds  his  actual  authority,  and  the 
person  dealing  with  him  has  notice  of  that  fact,  the  principal 
is  not  bound ;  and  it  is  upon  this  proposition  that  defendant 
chiefly  relies.  There  are  tw^o  provisions  in  the  policy  to  which 
he  refers  in  support  of  his  contention.  The  first  is  that 
'no  officer,  agent,  or  representative  of  the  company,  shall 
be  held  to  have  waived  any  of  the  terms  or  conditions  of 
this  policy  unless  such  waiver  shall  be  indorsed  thereon.' 

*  -X-  *  -jj^jg  provision  will  not  support  defendant's  con- 
tention, but  the  other  or  second  one  does.  It  is  as  follows: 
'this  policy  is  made  and  accepted  upon  the  above  express 
terms,  and  no  part  of  this  contract  can  be  Avaived  except  in 
writing  signed  by  the  secretary  of  the  company.'  The  words 
'policy'  and  'contract'  are  evidently  here  used  as  synonymous, 
and  the  latter  clause  clearly  means  that  none  of  the  terms  of 
the  policy  can  be  waived  by  anyone  except  the  secretary. 
Conceding  that  this  would  not  prevent  the  company  itself, 
through  its  Iward  of  directors,  or  other  body  representing  it  in 
its  corporate  capacity,  from  waiving  any  of  the  terms  or 
conditions  of  the  policy,  yet  it  is  a  plain  declaration  that  no 
representative  of  the  company  but  the  secretary  can  do  so, 
and  hence  that  no  local  agent  can  do  it.  This,  being  in  the 
policy  i^-self,  was  notice  to  plaintiff  that  this  agent     *     *     * 


248  AGENTS.  -  §  110 

had  no  authority  to  Tvaive  the  condition  that  no  insurance 
would  be  binding  until  payment  of  the  premium.  It  is  no 
answer  to  say  that  he  did  not  read  the  policy,  and  hence  did 
not  know  what  it  contained.  He  was  bound  to  know  this; 
and,  by  accepting  the  policy,  he  is  estopped  from  setting  up 
powers  in  the  agent  in  opposition  to  the  express  limitations 
contained  in  it." 

But  a  general  agent  who  collects  enough  cash  on  the  first 
premium  to  pay  the  part  thereof  which  is  due  to  the  insurer, 
may  extend  credit  for  the  balance  of  the  premium  which 
goes  to  him  by  way  of  commission  for  effecting  the  insurance ; 
and  a  policy  delivered  under  such  conditions  is  binding  on  the 
insurer,  though  the  terms  of  the  policy  require  the  first  pre- 
mium to  be  paid  in  cash  before  the  delivery  of  the  policy. ^^^* 

If  the  policy  provides  that  payment  of  the  premium  must 
be  ]nade  on  or  before  the  day  it  falls  due,  and  every  renewal 
certificate  contains  notice  to  the  effect  that  no  agent  is  author- 
ized to  receive  any  premium  after  it  becomes  due  without 
special  permission  from  the  company's  officers,  it  is  beyond 
the  power  of  local  and  limited  agents  to  nullify  these  pro- 
visions and  bind  their  principal  by  a  course  of  dealing  with 
policy  holders  in  violation  thereof. ^^^  Thus  where  the  policy 
stipulates  that  it  will  be  forfeited  if  the  renewal  premium  is 
not  paid  when  it  becomes  due,  and  an  indorsement  is  that 
"Agents  of  this  company  will  receive  premiums  when  due, 
but  are  not  authorized  in  any  case  to  make,  alter  or  discharge 
contracts,"  the  acceptance  of  a  renewal  premium  by  an  agent 
after  it  becomes  due,  does  not  bind  the  company,  unless  it 
ratifies  his  act.^'^° 

^•^^  John  Hancock  Mut.  Life  Ins.  Co.  v.  Schlink,  175  111.  285. 
^'»  Lewis  V.  Phoenix  Mut.  Life  Ins.  Co.,  44  Conn.  72. 
""Franklin  Life  Ins.  Co.  v.  Sefton,  53  Ind.  380;  Koelges  v.  Guard- 
ian Life  Ins.  Co.,  2  Lans.  (N.  Y.)  480;  Bouton  v.  American  Mut.  Life 


§  110       STIPULATIONS    IN    POLICY    AGAINST    GIVING    CREDIT.       219 

<3ontra  —  Waiver  of  Stipulation  against  Credit. 

Some  courts,  acting  upon  the  theory  that  the  collection  of 
premiums  and  renewals  are  mthin  the  general  scope  of  the 
agent's  authority,  have  held  that  the  provisions  of  the  policy 
■denying  agents  the  right  to  deliver  or  renew  policies  with- 
•out  prepayment,  may  be  effectually  waived  by  the  agent. 
Thus  in  New  York  an  insurer  is  presumed  to  know  and  is 
bound  by  the  terms  of  a  contract  entered  into  by  its  agent 
providing  for  the  payment  of  the  first  premium  by  note,  not- 
withstanding a  provision  in  the  policy  that  it  shall  not  take 
lake  effect  until  the  first  premium  is  paid.-'^^  And  in  Ne- 
braska and  Arkansas  the  unconditional  delivery  of  a  policy 
•without  requiring  payment  of  the  premium  in  cash,  by  a 
general  agent  of  the  company  having  authoritj^  to  make  terms 
for  insurance,  countersign  and  deliver  policies,  and  collect 
premiums,  operates  as  a  waiver  of  a  provision  requiring  cash 
papnent  of  premiums.^"^^  Where  application  for  insurance 
is  made  to  an  agent  witliout  any  company  being  desigTiated, 
and  such  agent  writes  a  policy  providing  that  there  should  be 
no  liability  until  the  premium  is  paid,  and  that  "it  is  expressly 
covenanted  by  the  parties  hereto  that  no  officer,  agent  or  repre- 
"sentative  of  the  company  shall  be  held  to  have  waived  any 

Ins.  Co.,  25  Conn.  542;  Ryan  v.  World  Mut.  Life  Ins.  Co.,  41  Conn. 
168;  Acey  v.  Fernie,  7  Mees.  &  W.  1.>1;  Catoir  v.  American  Life  In- 
surance &  Trust  Co.,  33  N.  J.  Law,  487;  Wall  v.  Home  Ins.  Co.,  8 
Bosw.   (N.  Y.)   597. 

="  Stewart  v.  Union  Mut.  Life  Ins.  Co.,  155  N.  Y.  257,  27  Ins.  Law 
J.  698,  49  N.  E.  876;  Bodine  v.  Exchange  Fire  Ins.  Co.,  51  N.  Y.  117. 
But  see  Cyrenius  v.  Mutual  Life  Ins.  Co.,  18  App.  Div.  599,  46  N.  Y. 
Supp.  549;  Southern  Life  Ins.  Co.  v.  Booker,  9  Heisk.  (Tenn.)  606; 
Farnum  v.  Phcenix  Ins.  Co.,  83  Cal.  246,  17  Am.  St.  Rep.  233,  and 
note. 

"-American  Employers'  Liability  Ins.  Co.  v.  Fordyce,  62  Ark.  562, 
36  S.  W.  1051;  Pythian  Life  Ass'n  v.  Preston,  47  Neb.  374,  66  N.  W. 
445. 


250  AGENTS.  §  111 

of  tlie  terms  or  conditions  of  this  policy,  unless  sucli  waiver 
shall  be  indorsed  hereon  in  writing,"  the  question  of  agency 
is  not  affected  because  the  principal  was  undisclosed ;  and  the 
agent  has  authority  to  bind  the  company  by  a  parol  agree- 
ment extending  the  time  for  making  payment  of  the  premium, 
the  limitation  quoted  not  being  on  his  power,  but  merely 
relating  to  the  manner  in  which  the  exercise  of  it  should  be  evi- 
denced.^"^^  The  recital  in  a  policy  of  life  insurance  issued  by 
a  non-resident  company,  that  "the  first  premium  is  to  be  paid 
in  advance,"  is  not  notice  to  the  insured  that  the  general  agent 
of  the  company  in  the  state  has  no  authority  to  accept  a  note 
for  the  premium,  where  he  furnishes  a  printed  blank  on  which 
to  execute  the  note  and  accepts  the  note  executed  thereon,  and 
the  policy  and  receipt  are  thereupon  delivered  to  the  appli- 
cant, though  the  policy  provides  that  "no  person  except  the 
president  or  secretary  is  authorized  to  make,  alter,  or  discharge 
contracts,  or  to  waive  forfeitures."  ^'^^ 

Manner  of  Payment  of  Premium:. 

gill.  An  agent  cannot  bind  the  company  by  taking  anything 
but  money  in  payment  of  premiums,  except  in  cases  where 
general  custom  or  his  course  of  dealing,  with  the  knowledge 
of  his  principal,  warrants  some  other  inference. 

It  is  an  elementary  principle,  applicable  alike  to  all  cases  of 
agency,  that  whatever  an  agent  does  can  be  done  only  in  the 
way  usual  in  the  line  of  business  in  which  he  is  acting.  There 
is  an  implication  to  this  effect  arising  from  the  nature  of  his 

="' Young  V.  Hartford  Fire  Ins.  Co.,  45  Iowa,  377;  Mississippi 
Valley  Ins.  Co.  v.  Neyland,  9  Bush  (Ky.),  430;  Sheldon  v.  Connecti- 
cut Mut.  Life  Ins.  Co.,  25  Conn.  207;  Trustees  of  First  Baptist 
Church  V.  Brooklyn  Fire  Ins.  Co.,  19  N.  Y.  305;  Bowman  v.  Agricult- 
ural Ins.  Co.,  59  N.  Y.  521. 

"^Washington  Life  Ins.  Co.  v,  Menefee's  Ex'r  (Ky.),  53  S.  W. 
260;  Connecticut  Ind.  Ass'n  v.  Grogan's  Adm'r  (Ky.),  52  S.  W.  959. 


§  111  MANNER   OF    PAYMENT    OF    PKEMIUM.  251 

employment,  and  it  is  as  effectual  as  if  it  had  been  expressed  in 
its  most  formal  terais.  Thus  the  taking  of  a  horse  by  an 
agent  of  an  insurance  company  to  pay  the  premium  of  a 
policy  is  ultra  vires,  and  a  fraud  as  respects  the  company. 
No  valid  contract  could  arise  from  such  a  transaction.^"^  Nor 
is  an  insurance  company  bound  to  approve  an  application 
sent  it  by  its  soliciting  agent  even  though  he  had  already 
accepted  livery  hire  as  payment  for  the  premium,  unless  the 
agent  had  either  actual  or  apparent  right  to  contract  for  livery 
service  at  the  expense  of  the  insurer.^^^  In  a  Georgia  case 
the  policy  provided  that  the  premiums  were  to  be  paid  an- 
nually—$100  by  a  loan  and  $107.30  in  cash,  and  was  to  be 
void  if  pajTiient  was  not  made  according  to  its  terms.  It  was 
expressed  in  the  application  that  the  policy  should  not  be  bind- 
ing until  the  first  premium  was  received  by  the  company 
during  the  assured's  life-time  and  good  health.  Defendant's 
agent  contracted  with  insured  that  the  premium  •  for  the 
first  year  should  be  paid  in  ser\dces  to  be  rendered  by  the 
latter  as  medical  examiner  for  the  company.  If  such  ser- 
vices exceeded  in  value  the  amount  of  the  first  year's  pre- 
mium, a  credit  was  to  be  given  for  the  excess  on  the  premium 
for  the  second  year.  The  death  of  insured  occurred  during 
the  first  year.  The  fees  for  his  services  did  not  amount  to  as 
much  as  the  premium.  Held,  that  the  act  of  the  agent  Avas  in 
excess  of  his  authority  and  there  could  be  no  recovery. ^'^^ 

=■' Hoffman  v.  John  Hancock  Mut.  Life  Ins.  Co.,  92  U.  S.  161; 
Cyrenius  v.  Mutual  Life  Ins.  Co.,  18  App.  Div.  599,  46  N.  Y.  Supp. 
549;  Crawford  County  Mut.  Ins.  Co.  v.  Cochran,  88  Pa.  St.  230;  ante, 
note  30.  But  see  Van  Werden  v.  Equitable  Life  Assur.  Soc,  99  Iowa, 
621,  68  N.  W.  892;  John  Hancock  Mut.  Life  Ins.  Co.  v.  Schlink,  175 
111.  284. 

""Winchell  v.  Iowa  State  Ins.  Co.,  103  Iowa,  189,  72  N.  W.  503. 

*"  Carter  v.  Cotton  States  Life  Ins.  Co.,  56  Ga.  237;  Anchor  Life 
Ins.  Co.  V.  Pease,  44  How.  Pr.  (N.  Y.)  385,  4  Bigelow,  Life  &  Ace. 
Ins.  Rep.  215. 


252  AGENTS.  §  112 

But  an  agreement  made  by  a  local  agent  and  approved  by 
tlie  general  agent  of  the  territory  in  which  it  was  made,  that 
fees  due  the  insured  for  services  to  the  company  should  be 
applied  in  payment  of  premiums  on  his  policy,  constitute  a 
waiver  of  the  conditions  of  the  policy  regarding  payment. ^'^^ 
The  insurer  is  not  concerned  in  the  arrangement  made  be- 
tween the  agent  and  the  insured  regarding  payment  of  that 
part  of  the  premium  which  goes  to  the  agent  in  payment  of 
his  commission. ^^^^ 

Agent  Taking  Note  Payable  to  Himself. 

An  insurance  company  is  chargeable  with  the  fraud  of  Its 
general  manager  and  state  agent  in  procuring  a  renewal  of  a 
premium  note  payable  to  himself  upon  a  false  promise  that  he 
would  return  the  original  which  had  in  fact  been  assigned  to  an 
innocent  holder,  where  it  had  furnished  him  blank  receipts  to 
fill  out  when  premium  notes  were  taken,  and  issued  a  policy 
to  the  maker  without  having  received  a  cash  payment,  and  by 
other  officers  assuming  to  act  for  the  company  induced  the 
maker  to  believe  the  agent  had  authority  to  take  and  renew 
premium  notes. ^'^^ 

Power  of  Agent  to  Waive  Proofs  of  Loss.**" 

§  112.  A  general  agent  of  the  insurer,  or  its  adjuster,  can 
■waive  proofs  of  loss;  and  service  of  proofs  of  loss  on  them  is 
service  on  the  insurer. 

"'Willcuts  V.  Northwestern  Mut.  Life  Ins.  Co.,  81  Ind.  300;  Van 
"Werden  v.  Equitable  Life  Assur.  Soc,  99  Iowa,  621,  68  N.  W,  892. 

="«  John  Hancock  Mut.  Life  Ins.  Co.  v.  Schlink.  175  III.  284. 

-"First  Nat.  Bank  of  Dubuque  v.  Getz,  96  Iowa,  139,  64  N.  W.  799; 
Godfrey  v.  New  York  Life  Ins.  Co.,  70  Minn.  224,  73  N.  W.  1;  New 
York  Life  Ins.  Co.  v.  Rolirbough,  2  Willson  Civ.  Cas.  Ct.  App.  (Tex.) 
167.  Compare  Jackson  v.  Mutual  Ben.  Life  Ins.  Co.,  79  Minn.  44,  81 
N.  W.  54.5,  82  N.  W.  366. 

^  See  post,  c.  14,  "Waiver  of  Notice  and  Proofs  of  Loss." 


§  113  CLERKS    AND    SUB-AGENTS.  253 

A  special  or  local  insurance  agent  cannot  waive  proofs  of  loss. 
Service  of  proofs  of  loss  on  them  is  not  sufacient. 

An  agent  with  power  to  waive  proofs  of  loss  can  waive  the 
provisions  of  the  policy  requiring  such  waiver  to  be  in  writing 
and  indorsed  on  the  policy,  except  where  the  policy  is  a  stand- 
ard policy. 

Clerks  and  Sub-agents. 

§  113.  General,  special  and  local  agents  of  insurance  compa- 
nies have  as  an  incident  to  their  powers  the  right  to  employ 
clerks  and  sub-agents  to  perform,  or  assist  them  in  performing, 
the  detail  and  ministerial  portion  of  their  duties  to  their  prin- 
cipal. 

The  powers  which  may  be  delegated  to  clerks  and  sub-agents 
must  be  determined  by  the  nature  of  the  business  required  to 
be  done  by  the  primary  agent  to  accomplish  the  purposes  of 
the  agency,  and  the  customs  of  the  locality. 

Insurance  companies  are  presumed  to  know,  when  tliey 
employ  agents,  that  according  to  the  general  course  of  busi- 
ness, the  agents  will  have  clerks  and  sub-agents  to  assist  them 
in  the  detail  and  clerical  work  of  the  agency,  and  that  an  agent 
could  not  in  very  many  cases  transact  the  business  intrusted 
to  his  care  alone  and  unaided.  It  being  therefore  reasonable 
and  customary  for  agents  to  employ  others  in  doing  the  work, 
it  is  just  and  reasonable  that  the  principal  should  be  held 
responsible  for  the  acts  of  the  agent's  employes  and  sul>agents. 
True,  the  general  rule  is,  that  agents  cannot  delegate  their 
power  without  express  authority  from  their  principals ;  but  in 
many  cases  such  authority  may  be  implied,  as  where  it  is  nec- 
essary to  accomplish  the  purposes  of  the  agency,  or  where  it  is 
the  ordinary  custom  so  to  do,  or  where  it  is  understood  by  the 
parties  to  be  the  mode  in  which  the  agency  might  or  could  be 
carried  on.  All  services  are  not  of  sucli  a  personal  nature 
as  to  come  within  the  rule  delegatus  non  potest  delegare. 
Generally  speaking,  therefore,  agents  of  insurance  companies. 


25-i  AGENTS.  §  113 

authorized  to  contract  for  risks,  collect  and  receive  premiums, 
and  deliver  policies,  may  confer  upon  tlieir  subordinates  tlio 
same  powers. ^^^  An  insurance  company  -wliich  k^ows  that 
a  clerk  in* the  office  of  its  general  agent  passes  on  applications 
and  signs  the  agent's  name,  and  is  in  the  habit  of  acting  for 
him  in  such  matters,  is  responsible  for  the  acts  of  such  clerk 
"within  the  scope  of  the  agent's  authority  in  connection  with 
the  business.  ^^^ 

A  provision  in  a  policy  that  "only  such  persons  as  shall 
hold  the  commission  of  this  company"  shall  be  considered  as 
its  agents  in  any  transaction  relating  to  the  insurance,  will 
not  prevent  the  employment  by  the  authorized  agents  of  sucli 
company,  of  clerks  who  may  act  on  behalf  of  such  agents,  and 
who  stand  in  the  same  relation  to  the  principal  as  the  agents, 
and  can  bind  the  company  within  the  proper  scope  of  their 
employment.  ^^^  Though  an  agent  cannot  delegate  his  au- 
thority, he  may  employ  clerks  and  sub-agents,  whose  acts, 
done  in  his  name  and  recognized  by  him,  either  specially  or 

^'^Deitz  V.  Providence  Wash.  Ins.  Co.,  33  W.  Va.  526,  31  W.  Va. 
851;  Bodine  v.  Exchange  Fire  Ins.  Co.,  51  N.  Y.  117;  Bennett  v. 
Council  Bluffs  Ins.  Co.,  70  Iowa,  600;  Goode  v.  Georgia  Home  Ins. 
Co.,  92  Va.  392,  30  L.  R.  A.  842;  Arff  v.  Star  Fire  Ins.  Co.,  125  N.  Y. 
57;  Steele  v.  German  Ins.  Co.,  93  Mich.  81;  Michigan  F.  &  M.  Ins. 
Co.  V.  Wich,  8  Colo.  App.  409,  46  Pac.  687;  Kuney  v.  Amazon  Ins.  Co., 
36  Hun  (N.  Y),  66;  Runkle  v.  Citizens'  Ins.  Co.,  6  Fed.  143  (distin- 
guishing powers  which  can  from  those  which  cannot  be  delegated) ; 
Krumm  v.  Jefferson  Fire  Ins.  Co.,  40  Ohio  St.  225. 

-^- Fitzpaterick  v.  Hartford  Life  &  Annuity  Ins.  Co.,  56  Conn.  116; 
German  Fire  Ins.  Co.  v.  Columbia  Encaustic  Tile  Co.,  15  Ind.  App. 
623,  43  N.  E.  41. 

^»^Arff  V.  Star  Fire  Ins.  Co.,  125  N.  Y.  57,  10  L.  R.  A.  609;  Inter- 
national Trust  Co.  v.  Norwich  Union  Fire  Ins.  Soc,  71  Fed.  81,  17. 
C.  C.  A.  608;  Bennett  v.  Council  Bluffs  Ins.  Co.,  70  Iowa,  600,  31 
N.  W.  948;  Waldman  v.  North  British  &  Mercantile  Ins.  Co.,  91 
Ala.  170.  And  notice  to  such  clerk  is  notice  to  the  company.  Phceni.'^ 
Ins.  Co.  V.  Ward,  7  Tex.  Civ.  App.  13,  26  S.  W.  763;  Bennett  v. 
Council  Bluffs  Ins.  Co.,  supra. 


§  113  CLERKS  AND  SUB- AGENTS.  255 

according  to  liis  usual  method  of  dealing  with  them,  -will  he 
considered  as  his  acts  and  will  bind  his  principal.^^^  Where 
an  insurance  agent  permits  his  sub-agent  to  receive  premiums 
from  and  deliver  policies  to  the  insured,  the  acts  of  the  sub- 
agent  are  regarded  as  the  acts  of  the  agent,  and  persons  dealing 
with  the  sub-agent  have  a  right  to  judge  of  the  extent  of  his 
authority  by  the  nature  of  the  business  intrusted  to  him ;  and 
the  waiver  by  such  sub-agent  of  a  condition  of  a  policy  is  the 
waiver  of  the  agent,  and  of  the  company  he  represents.  ^^^ 
The  insurer's  assent  to  an  assignment  of  the  policy  is  properly 
evidenced  by  the  signature  of  sub-agents  as  "agents,"  although 
the  fact  of  their  sub-agency  is  not  made  apparent  in  the 
writing.  ^^^ 

One  employed  by  the  commissioned  agent  of  an  insurance 
company  to  solicit  risks,  make  surveys,  collect  premiums  and 
deliver  policies,  and  who  receives  as  compensation  a  share  of 
the  earnings  of  the  business,  and  is  accustomed  to  fix  rates, 
which  are  accepted  and  approved  by  the  agent  with  the 
knowledge  of  the  officers  of  the  company,  is  an  agent  of  the 
latter,  and  his  acts  bind  it.^^^  A.  gave  B.  power  of  attorney 
to  underwrite  any  policy  not  exceeding  one  hundred  pounds 
and  to  subscribe  it  in  his  name,  and  to  settle  and  adjust 
losses,  etc.  Held,  that  although  B.  cannot  delegate  his  whole 
authority  to  another,  yet,  having  signed  a  slip  for  a  policy, 

*"  Lingenf elter  v.  Phoenix  Ins.  Co.,  19  Mo.  App.  252;  International 
Truot  Co.  V.  Noiwich  Union  Fire  Ins.  Soc,  71  Fed.  81,  17  C.  C.  A.  608. 

=^'Grubbs  v.  North  Carolina  Home  Ins.  Co.,  108  N.  C.  472;  Deitz 
V.  Providence  Wash.  Ins.  Co.,  33  W.  Va.  526,  31  W.  Va.  851.  See 
contra  Waldman  v.  North  British  &  Mercantile  Ins.  Co.,  91  Ala.  170, 
24  Am.  St.  Rep.  883. 

"'"  Chauncy  v.  German  American  Ins.  Co.,  60  N.  H.  428. 

^' Davis  V.  Lamar  Ins.  Co.,  18  Hun  (N.  Y.),  230;  Van  Schoick  v. 
Niagara  Fire  Ins.  Co.,  68  N.  Y.  434;  Chase  v.  People's  Fire  Ins.  Co., 
14  Hun  (N.  Y.),  456;  Bodine  v.  Exchange  Fire  Ins.  Co.,  51  N.  Y.  117. 


256  AGENTS.  §  114: 

the  signature  of  liis  clerk  for  liim  and  in  liis  absence,  to  a 
policy  written  in  pursuance  of  the  slip,  is  a  good  execution  of 
the  power,  being  only  a  ministerial  act,  which  might  be  done 
by  another  by  his  authority.  ^^^  But  an  agent's  clerk  who 
has  no  authority  to  contract  for  or  issue  policies,  cannot  waive 
a  provision  avoiding  a  policy  if  the  insured  property  becomes 
encumbered  by  a  chattel  mortgage.  ^^^ 

Delegation"  of  Power. 

§  114.  Authority  implying  the  exercise  of  judgment  or  dis- 
cretion cannot,  in  the  absence  of  a  known  usage,  or  unless 
justified  by  the  necessities  of  the  case,  be  delegated  by  the 
agent  to  another  without  the  consent  of  the  principal. 

The  adjusting  agent  of  an  insurance  company  has  no  power 
to  delegate  his  authority,  and  the  company  is  not  bound  by 
the  acts  of  a  sub-agent  appointed  by  him,  in  the  absence  of  a 
showing  that  he  customarily  delegated  his  authority  to  others 
with  the  consent  of  the  company.^^^  Nor  can  the  authority 
conferred  upon  an  insurance  agent  to  allow  extensions  of  time 
on  premium  notes,  be  delegated  without  consent  of  the  com- 
pany. ^^^     The   directors   of   a  mutual   insurance  company 

"^  Mason  v.  Joseph,  1  Smith,  J.  P.  Eng.  406. 

''"German-American  Ins.  Co.  v.  Humphrey,  62  Ark.  348,  35  S.  W. 
428,  25  Ins.  Law  J.  658;  Dwelling-House  Ins.  Co.  v.  Snyder,  59  N.  J. 
Law,  18,  34  Atl.  931. 

^^'^'^  Brown  v.  Railway  Passenger  Assur.  Co.,  45  Mo.  221;  Farmers' 
Mut.  Fire  Ins.  Co.  v.  Chase,  56  N.  H.  341;  McClure  v.  Mississippi 
Valley  Ins.  Co.,  4  Mo.  App.  148;  Runkle  v.  Citizens'  Ins.  Co.,  6  Fed. 
143. 

'"Monroe  v.  British  &  F.  M.  Ins.  Co.  (C.  C.  A.),  52  Fed.  777; 
Albers  v.  Phoenix  Ins.  Co.,  68  Mo.  App.  543;  Ruthven  v.  American 
Fire  Ins.  Co.,  92  Iowa.  316,  60  N.  W.  663. 

"=  Home  Fire  Ins,  Co.  v.  Garbacz,  48  Neb.  827,  67  N.  W.  864. 


§§  115,  116  TERMINATION    OF    AGENCY.  257 

cannot  delegate  a  right  conferred  on  them  to  represent  absent 
members  and  vote  for  them  at  meetings.  ^^^ 

Same  —  Evidence  of  Authority  of  Sub-agent. 

§  115.  The  one  asserting  power  in  a  sub-agent  has  the  bur- 
den of  proving  the  existence  and  extent  of  the  power. 

One  who  desires  to  avail  himself  of  the  acts  of  another 
whom  he  claims  was  a  sub-agent,  must  prove  the  appointment 
of  the  sub-agent  bj  the  agent,  and  the  power  of  the  latter  to 
make  such  an  appointment.  ^'^'^ 

Termination  of  Agency. 

§  1 16.  The  authority  of  an  agent  to  represent  an  insurer  may 
be  terminated  by  the  terms  of  the  appointment,  by  the  act  of 
the  parties,  or  by  operation  of  law. 

Persons  who  deal  with  an  agent  in  the  particular  business 
with  which  he  was  intrusted  may  rely  upon  the  continuance 
of  his  authority  until  informed  of  its  revocation,  and  are  not 
afieeted  by  secret  or  special  agreement  limiting  or  terminating 
the  agent's  authority. 

Statutory  agencies  can  only  be  revoked  in  the  manner  pre- 
scribed by  statute,  and  after  they  have  served  the  purpose  in- 
tended by  the  law. 

The  revocation  or  cessation  of  an  agent's  authority  termi- 
nates the  authority  of  all  those  who  derived  their  power 
through  him. 

Where  an  agency  is  created  for  a  given  or  definite  period, 
or  until  the  happening  of  a  particular  event,  the  expiration  of 
that  period  or  the  happening  of  that  event  operates  to  ter- 
minate the  agency.  And  it  may  be  terminated  at  any  time, 
unless  otherwise  stipulated  in  the  contract  of  employment,  by 
revocation  of  authority  by  the  principal,  or  by  the  renuncia- 

"'  Farmers'  Loan  &  Trust  Co.  v.  Aberle,  18  Misc.  Rep.  257,  41  N.  Y. 
Supp.  638. 

"^American  Underwriter's  Ass'n  v.  George,  97  Pa.  St.  238;  ante, 
§  77. 

KERR,  INS.— 17 


258  AGENTS.  §  116 

tion  of  his  agency  by  tlie  agent.  It  may  always  be  terminated 
by  the  mutual  consent  of  the  parties,  subject  to  conditions 
hereinafter  mentioned.  Parol  revocation  or  renunciation  is 
sufficient.  ^^^ 

One  who  is  insured  in  a  mutual  insurance  company  accepts 
the  policy  with  all  the  conditions  and  limitations  contained 
in  the  charter,  by-laws,  and  policy,  and  is  bound  by  pro- 
visions therein  denying  to  agents  any  powers  after  the  delivery 
of  the  policy.^^®  Where  a  firm  or  corporation  which  has 
appointed  an  agent  is  dissolved,  or  goes  into  bankruptcy,  the 
agency  is  thereby  revoked.  ^^'^  The  agency  ceases  when  the 
company  goes  out  of  business. ^''^  Authority  to  two  persons  to 
act  as  "agent,"  terminates  with  the  death  or  insanity  of 
either  ;^^^  but  a  contract  authorizing  a  firm  of  insurance 
brokers  to  procure  and  keep  alive  fire  insurance  for  a  business 

=''' Copeland  v.  Mercantile  Ins.  Co.,  6  Pick.  (Mass.)  198;  Gundlach 
V.  Fischer,  59  111.  172;  Oregon  &  W.  Mortg.  Sav.  Bank  Co.  v.  Ameri- 
can Mortg.  Co.,  35  Fed.  22;  Story,  Agency,  §§  463--481.  "It  may  have 
been  called  into  being  for  the  express  purpose  of  performing  a  single 
act  or  series  of  acts,  and,  these  being  performed,  the  agency  would 
be  terminated  by  the  accomplishment  of  that  for  which  it  was  cre- 
ated. *  *  *  So,  subsequent  changes  in  the  conditions  or  relation 
of  the  parties  may  render  the  continuance  of  the  agency  incon- 
sistent or  impossible,  and  it  will  be  terminated  by  operation  of 
law."     Mechem,  Agency,  §  199  et  seq. 

=»»  Bourgeois  v.  Mutual  Fire  Ins.  Co.,  86  Wis.  402,  57  N.  W.  39. 

'"^Rowe  V.  Rand,  111  Ind.  206;  Schlater  v.  Winpenny,  75  Pa.  St. 
321;  Montross  v.  Roger  Williams  Ins.  Co.,  49  Mich.  477;  Whitworth 
V.  Ballard,  56  Ind.  279. 

'"'  North  Carolina  State  X.ife  Ins.  Co.  v.  Williams,  91  N.  C.  69. 

=""  Hartford  Fire  Ins.  Co.  v.  Wilcox,  57  111.  180;  Martine  v.  Interna- 
tional Life  Assur,  Soc,  62  Barb.  (N.  Y.)  181,  53  N.  Y.  339;  Salisbury 
V.  Brisbane,  61  N.  Y.  617;  Rowe  v.  Rand,  111  Ind.  206.  As  to  the 
effect  upon  agency  of  war  between  the  country  of  the  principal  and 
that  of  the  agent,  see  New  York  Life  Ins.  Co.  v.  Davis,  95  U.  S.  425, 
and  New  York  Life  Ins.  Co.  v.  Statham,  93  U.  S.  24,  holding  that 
it  dissolves  the  relation;  and  Robinson  v.  International  Life  Assur. 
Soc,  42  N.  Y.  54;  Sands  v.  New  York  Life  Ins.  Co.,  50  N.  Y.  626,  and 


§  116  TERMINATION    OF   AGENCY.  259 

firm,  and  providing  that  any  cliange  in  tlie  membcrsliip  of  tho 
firms,  or  either  of  them,  should  "not  in  any  wise  release  either 
of  said  firais  or  any  of  the  present  members"  therefrom,  is 
not  terminated  by  the  retirement  of  one  of  the  brokers  from 
the  firm.300 

Secret  Revocation. 

The  presumption  is  that  an  existing  agency  will  continue. 
After  an  insurance  company  has  appointed  an  agent  in  a 
particular  business,  parties  dealing  with  him  in  that  business 
have  a  right  to  rely  upon  the  continuance  of  his  authority, 
until  they  are  in  some  way  informed  of  its  revocation.  It 
cannot  secretly  withdraw  its  agency  from  agents  who  have 
issued  a  policy,  so  as  to  relieve  itself  from  their  subsequent 
acts  in  connection  with  the  policy.  Unless  revocation  of  the 
agent's  authority  be  brought  home  to  the  party  who  deals  with 
him  in  reliance  upon  a  known  pre-existing  authority,  the 
principal  will  be  bound  by  the  dealings  of  the  agent  within 
the  scope  of  such  authority  to  the  same  extent  as  if  the  rev- 
ocation had  not  been  attempted.  But  a  revocation  is  binding 
upon  all  to  whom  it  is  communicated.  If  known  only  to  the 
principal  and  agent,  it  would  only  be  effectual  between, 
them.301 

Statutory  Agency. 

Where  a  statute  requires  each  foreign  insurance  company 
doing  business  within  the  state  to  appoint  a  resident  agent 

Manhattan  Life  Ins.  Co.  v.  Warwick,  20  Grat.  (Va.)  614,  maintain- 
ing the  opposite  doctrine. 

'•^  Tannebaum  v.  Rosenthal,  44  App.  Div.  431,  GO  N.  Y.  Supp.  1092. 

""  Southern  Life  Ins.  Co.  v.  McCain,  96  U.  S.  84 ;  Montross  v.  Roger 
Williams  Ins.  Co.,  49  Mich.  477;  McNeilly  v.  Continental  Life  Ins. 
Co.,  66  N.  Y.  23;  Springfield  F.  &  M.  Ins.  Co.  v.  Davis  (Ky.),  37  S.  W. 
582;  ante,  notes  31,  32. 


.260  AGENTS.  §117 

•witliin  that  state  upon  wliom  process  miglit  be  served,  a  com- 
pany having  appointed  such  an  agent  pursuant  to  the  statutory 
requirement  can  only  revoke  his  authority  upon  the  appoint- 
ment of  another.^^^  And  where  the  statute  provides  that 
"whoever  solicits  insurance  on  behalf  of  an  insurance  com- 
pany," etc,  shall  be  deemed  the  agent  of  the  insurer,  and  that 
service  of  the  summons  may  be  made  upon  any  agent  of  the 
insurer,  the  agency  thus  created  by  the  statute  cannot  be  ter- 
minated by  the  insured,  and  does  not  cease  to  exist  by  lapse 
of  time ;  but  is  continuous,  at  least  for  the  purpose  of  enabling 
the  court  to  acquire  jurisdiction  over  the  insurer  in  a  suit 
on  a  policy  issued  by  such  agent.^*^^ 

Termination  of  the  Powers  of  Sub-agent. 

The  termination  of  the  authority  of  an  agent  brings  to  an 
end  the  powers  of  all  sub-agents  and  clerks  appointed  by  him 
and  who  derive  their  power  through  him,  and  this  rule  applies 
even  though  the  agent  was  given  the  right  of  substitution.^^^ 
Where  an  agent  has  appointed  a  sub-agent  or  substitute  with- 
out direct  authority  so  to  do,  and  for  his  own  convenience 
merely,  the  death  of  the  agent  annuls  the  authority  of  the  sub- 
agent  or  substitute.^*^^ 

Adjttstees. 

§  117.  An  adjuster  is  an  agent  of  the  insurer  clothed  with 
authority  to  represent  it  in  investigating  the  origin,  cause,  and 
extent  of  a  loss,  and  in  all  matters  relating  to  the  settlement 
and  adjustment  of  a  loss. 

^■=  Gibson  v.  Manufacturers'  F.  &  M.  Ins.  Co.,  144  Mass.  81;  Michael 
V.  Mutual  Ins.  Co..  10  La.  Ann.  737. 

303  pj.g^  Miller  Brewing  Co.  v.  Council  Bluffs  Ins.  Co.,  95  Iowa,  31,. 
63  N.  W.  566. 

2"^  Lehigh  Coal  &  Navigation  Co.  v.  Mohr,  83  Pa.  St.  228. 

""Jackson  Ins.  Co.  v.  Partee,  9  Heisk.  (Tenn.)  296;  'Mechem, 
Agency,  §§  252,  262,  270;  2  Livermore,  Agency,  §  307;  Martine  v. 
International  Life  Assur.  Soc,  62  Barb,  (N.  Y.)  181;  Guthrie  v^ 
Armstrong,  1  Dowl.  &  R.  248. 


§  117  ADJUSTERS. 


2G1 


He  can  by  his  acts  or  declarations  waive  the  conditions  of 
the  policy  requiring  insured  to  furnish  proofs  of  loss. 
He  cannot  delegate  his  authority. 

The  business  of  an  adjusting  agent  of  an  insurance  com- 
pany is  to  ascertain  the  nature  and  amount  and  circumstances 
of  a  loss,  and  agree  with  the  insured  on  a  settlement  when 
that  can  be  done.  It  is  the  adjuster  who  determines  the 
amount  of  a  claim,  as  a  claim  against  the  company.  Prima 
facie,  his  powers  are  co-extensive  with  the  business  intrusted 
to  his  care.  lie  has  ordinarily  the  power  to  act  in  all  mat- 
ters pertaining  to  the  adjustment  of  the  loss,  and  to  deal 
with  the  loss,  and  make  a  settlement  with  the  insured.  And 
if,  in  so  doing,  he  exceeds  his  authority,  that  is  a  matter  ex- 
clusively within  the  knowledge  of  the  insurers,  and  they  must 
prove  it.^°^  Instructions  to  a  sub-agent  by  a  general  ad- 
juster to  "see  aliout  a  loss  and  look  it  over,"  give  him 
authority  to  adjust  a  loss,  and  to  waive  breaches  of  the  con- 
ditions of  the  policy.^"'^  But  an  agent  who  has  authority 
to  adjust  a  particular  loss  cannot,  by  virtue  thereof,  adjust 
a  different  loss,  and  whatever  he  may  have  asserted  with 
reference  to  such  different  loss  cannot  bind  his  principal.^"^ 
Special  authority  to  an  agent  to  adjust  a  particular  loss  or 
damage  does  not  confer  authority  to  bind  the  company  by  a 
promise  to  pay  such  loss  or  damage,  where  the  policy  pro- 
vides that  adjustment  shall  be  made  without  reference  to  the 

*"' Anderson's  Law  Diet.;  First  Nat.  Bank  of  Devil's  Lake  v.  Man- 
chester Fire  Assur.  Co.,  64  Minn.  100;  First  Nat.  Bank  of  Devil's 
Lake  v.  Lancashire  Ins.  Co.,  65  Minn.  462;  Ramsey  v.  Philadelphia 
Underwriters'  Ass'n,  71  Mo.  App.  380;  Aetna  Ins.  Co.  v.  Shryer,  85 
Ind.  362;  Aetna  Ins.  Co,  v,  Maguire,  51  111.  342;  Enos  v,  St,  Paul  F, 
&  M.  Ins.  Co.,  4  S.  D.  639,  57  N.  W.  919. 

""  Swain  v.  Agricultural  Ins.  Co.,  37  Minn.  390. 

'"'Hartford  Fire  Ins.  Co.  v.  Smith,  3  Colo.  422;  Monroe  v.  British 
&  F.  M.  Ins  Co.  (C.  C.  A.),  52  Fed.  777. 


262  AGENTS.  §117 

other  terms  and  conditions  of  the  contract.^"^  An  authority 
to  adjust  a  loss  occurring  on  the  British  coast  cannot  be  pre- 
sumed from  the  fact  that  the  Boston  agents  of  a  British 
company  were  authorized  to  issue  policies,  receive  the  pre- 
miums, and  represent  the  insurer  in  legal  proceedings  in 
Massachusetts.^  ^^ 

Statutory  Regulation. 

The  act  of  an  adjuster  in  attending  to  his  duties  in  connec- 
tion with  a  loss,  is  not  "transacting  insurance  business"  with- 
in the  meaning  of  a  statute  regulating  the  transaction  of 
insurance  business.^  ^^ 

A  professional  adjuster,  employed  by  different  companies 
as  they  require  his  services,  has  a  right  to  follow  his  calling 
in  any  state  where  his  employment  takes  him.  That  is  a  right 
guaranteed  him  by  the  constitution  of  the  United  States,  and 
the  fact  that  he  goes  to  a  particular  state  to  adjust  a  loss  for 
an  unlicensed  foreign  company  does  not  make  him  its  agent 
so  as  to  subject  him  to  a  penalty  within  the  terms  of  a  statute 
regulating  the  business  and  agents  of  foreign  insurance  com- 
panies. Any  law  abridging  the  agent's  rights  in  these  partic- 
ulars would  be  void.^^^ 

Waiver  of  Proofs  of  Loss  by  Adjuster. 

The  adjuster  of  an  insurance  company  may  by  his  acts  or 
declarations  waive  the  provisions  of  a  policy  requiring  the 

""^  Queen  Ins.  Co.  v.  Young,  86  Ala.  424. 

^o  Monroe  v.  British  &  F.  M.  Ins.  Co.,  5  U.  S.  App.  179,  52  Fed.  777, 
3  C.  C.  A.  280. 

'"People  V.  Gilbert,  44  Hun  (N.  Y.),  522. 

"=  French  v.  People,  6  Colo.  App.  311,  40  Pac.  463,  24  Ins.  Law  J. 
678.  See,  also.  Weed  v.  London  &  L.  Fire  Ins.  Co.,  116  N.  Y.  106: 
Union  Mut.  Ins.  Co.  v.  Wilkinson,  13  Wall.  (U.  S.)  222. 


§  117  ADJUSTERS.  263 

service  by  the  insured  of  notice  and  proofs  of  loss.^^'^  Power 
lo  "adjust"  a  loss  under  a  policy  includes  the  power  to  waive 
formal  proofs  of  loss.^'^  A  limitation  on  the  power  of  an 
agent  to  waive  conditions  in  a  policy  of  insurance,  does  not 
operate  to  limit  the  usual  powers  of  an  adjuster  after  the 
policy  has  become  a  demand  ;^^^  and  the  provisions  of  a  policy 
that  only  a  specific  agreement  indorsed  thereon  shall  be  con- 
strued as  a  waiver  of  any  condition,  and  that  the  agent  of  the 
insuring  company  has  no  authority  to  waive  any  condition, 
do  not  prevent  the  company's  adjuster  from  waiving  a  con- 
dition requiring  insured  to  furnish  proof  of  loss;^^®  e.  g.  by 
refusing  to  pay  a  loss  to  the  assignee  of  the  policy  on  the 
ground  that  a  mortgage  held  by  the  assig-nee  was  unauthor- 
ized,^ ^^  or  by  taking  written  sworn  examinations  of  the 
assured,  requiring  him  to  furnish  duplicate  bills  of  goods,  re- 
ferring to  the  examinations  and  bills  of  goods  as  proofs  of 
loss,  stating  to  the  assured  that  nothing  more  is  required  and 
offering  to  pay  portions  of  the  loss.-^^^  But  an  offer  by  an 
adjuster  to  compromise  is  not  a  waiver  of  any  rights.^ ^* 

«^  Dibbrell  v.  Georgia  Home  Ins.  Co.,  110  N.  C.  193 ;  German  Ins. 
Co.  V.  Gray,  43  Kan.  497;  McCollum  v.  Liverpool,  L.  &  G.  Ins.  Co.,  67 
Mo.  App.  66;  Brown  v.  State  Ins.  Co.,  74  Iowa,  428,  38  N.  W.  135; 
Rockford  Ins.  Co.  v.  Williams,  56  111.  App.  338;  Hanover  Fire  Ins. 
Co.  V.  Gustin,  40  Neb.  828,  59  N.  W.''375;  Faust  v.  American  Fire  Ins. 
Co..  91  Wis.  158.  64  N.  W.  883. 

'"Ruthven  v.  American  Fire  Ins.  Co.,  102  Iowa,  550,  71  N.  W.  574. 

"'Indiana  Ins.  Co.  v.  Capehart,  108  Ind.  270;  Roberts,  Willis  & 
Taylor  Co.  v.  Sun  Mut.  Ins.  Co.,  13  Tex.  Civ.  App.  64,  35  S.  W.  955. 

""  Huesinkveld  v  St.  Paul  F.  &  M.  Ins.  Co.  (Iowa),  76  N.  W.  696. 

"'Western  Assur.  Co.  v.  McCarty,  18  Ind.  App.  449,  27  Ins.  Law  J. 
187,  48  N.  E.  265. 

"'Wright  v.  London  Fire  Ins.  Co.,  12  Mont.  474,  19  L.  R.  A.  211; 
Anthony  v.  German  American  Ins.  Co.,  48  Mo.  App.  65;  Aetna  Ins. 
Co.  V.  Shyer.  85  Ind.  362;  Searle  v.  Dwelling  House  Ins.  Co.,  153 
Mass.  263.  As  to  effect  of  service  of  process  on  adjuster,  see  Lesure 
Lumber  Co.  v.  Mut.  Fire  Ins.  Co.,  101  Iowa,  514,  70  N.  W.  761. 

"» Richards  v.  Continental  Ins.  Co.,  83  Mich.  508. 


2Gi  AGENTS.  §§  118,  119 

A.PPRAISERS. 

§  118.  Appraisers  are  arbiters  appointed  by  the  insurer  and 
the  insured  to  settle  disputes  as  to  amount  of  loss.  They  must 
be  disinterested. 

Most  insurance  policies  contain  a  clause  providing  in  effect 
that  "in  case  of  loss  and  a  failure  of  the  parties  to  agree  as  to 
the  amount  of  the  loss,  the  amount  of  such  loss  shall  be  deter- 
mined by  disinterested  appraisers"  or  arbitrators.  Such  pro- 
visions are  valid.  The  evident  object  is  to  furnish  a  con- 
venient court  of  appraisal  and  arbitration  to  settle  real  dif- 
ferences of  opinion,  without  the  delay  and  cost  of  a  suit  for 
that  purpose.^ ^^ 

Ratification"  and  Adoption  of  Act  op  Agent. 

§  119.  If  an  insurance  company  ratifies  or  adopts  an  unau- 
thorized act  of  its  agent,  or  of  one  assuming  to  act  for  it,  the 
act  is  as  bindig  as  though  authorized  when  done. 

An  insurer  can  only  adopt  and  ratify  acts  which  it  could  au- 
thorize others  to  do. 

Agents  can  only  ratify  what  they  can  authorize. 

What  one  assumes  to  do  for  another  without  any  authority, 
or  in  excess  of  his  actual  authority,  does  not  primarily  bind 
the  latter.  The  mere  assumption  of  authority  by  a  spurious 
agent,  or  the  assumption  of  false  authority  by  an  actual  agent, 
does  not  alone  give  grounds  for  claims  against  a  principal. 
But  the  doing  of  any  act  without  previous  authority  may  be 
ratified  and  adopted,  if  the  act  be  of  such  a  nature  and  kind 
that  its  commission  could  have  been  entrusted  to  an  agent. 
And  an  adoption  or  ratification  by  an  insurer  of  such  unau- 
thorized act,  with  full  knowledge  of  the  facts,  is  equivalent 
to  a  precedent  authority  to  perform  the  act,  whether  arising 
through  contract  or  tort.     The  ratification  or  adoption  relates 

^"  Post,  c.  15,  "Arbitration  and  Award." 


§  119         KATIFICATION    AND    ADOrXION    OF   ACT   OF    AGENT.        2G5 

back  to  the  time  of  inception  of  the  transaction,  and  the  act 
is  as  binding  as  though  it  was  authorized  when  done/''^^ 

An  act  which  is  in  excess  of  the  charter  of  a  corporation 
involves  an  unauthorized  exercise  of  corporate  power  on  the 
part  of  the  company,  and  this  objection  cannot  be  obviated 
by  any  subsequent  ratiiication,  either  by  the  agents,  or  the 
.shareholders  of  the  corporation.  Hence  an  insurer  cannot 
ratify  an  act  prohibited  by  law,  or  by  its  charter,  or  which  is 
contrary  to  public  policy.^^^ 

An  agent  can  bind  his  principal  by  ratification  of  another's 
act,  only  when  the  act  done  is  within  the  scope  of  the  agent's 
authority.  He  cannot  ratify  his  own  unauthorized  act,  nor 
that  of  his  co-agent,  or  superior.  A  ratification  must  be 
effected  by  the  principal,  or  by  some  agent  by  whom  the  act 
might  rightfully  have  been  performed.^ ^^ 

Illustrations  of  Ratification. 

Upon  being  notified  of  an  unauthorized  act  of  its  agent  the 
principal  has  a  right  to  elect  whether  he  will  affirm  it,  or  not ; 
and  so  long  as  the  rights  of  the  parties  are  unchanged  he  cannot 
be  prevented  from  exercising  such  right  because  the  other 
party  prefers  to  consider  the  contract  invalid.^ ^^     If  the  prin- 

^'"In  re  Insurance  Co.  of  Pennsylvania,  22  Fed.  109;  McArthur  v. 
Home  Life  Ass'n,  73  Iowa,  33S,  35  N.  W.  430;  National  Life  Ins.  Co. 
V.  Minch,  53  N.  Y.  144;  Andrews  v.  Aetna  Life  Ins.  Co.,  92  N.  Y.  596; 
Kansas  Farmers'  Fire  Ins.  Co.  v.  Saindon,  52  Kan.  486,  39  Am.  St. 
Rep.  356;  Southern  Life  Ins.  Co.  v.  McCain,  96  U.  S.  84;  Morse  v. 
St.  Paul  F.  &  M.  Ins.  Co.,  21  Minn.  407;  Abraham  v.  North  German 
Ins.  Co.,  40  Fed.  717;  Godfrey  v.  New  York  Life  Ins.  Co.,  70  Minn. 
224.  ■  » 

'"Swett  V.  Citizens'  Mut.  Relief  Soc,  78  Me.  541;  Morawetz,  Prlv. 
Corp.  §  619. 

»-' Mound  City  Mut.  Life  Ins.  Co.  v.  Huth,  49  Ala.  530;  Union  Mut. 
Life  Ins.  Co.  v.  Masten,  3  Fed.  881;  Crim's  Appeal,  66  Pa.  St.  474; 
Huesinkveld  v.  St.  Paul  F.  &  M.  Ins.  Co.  (Iowa),  76  N.  W.  697. 

'-*  Andrews  v.  Aetna  Life  Ins.  Co.,  92  N.  Y.  596. 


266  AGENTS.  §  119 

cipal  does  not  promptly  repudiate  tlie  unautliorlzed  act  lie  will 
be  held  to  have  ratified  it.^^^  Defendant's  agent,  authorized 
to  make  contracts,  knew  that  plaintiff  had  paid  the  premium 
to  a  broker  and  accepted  the  responsibility  of  the  latter. 
Subsequently  plaintiff  desired  to  make  an  addition  to  the 
premises  which  would  increase  the  risk,  and  applied  to  the 
agent  for  an  indorsement  of  his  consent  on  the  policy.  The 
agent  told  him  that  the  policy  would  have  to  be  forwarded 
to  the  company ;  but  the  consent  would  be  given,  he  might  rely 
upon  it  and  go  on  with  liis  addition.  The  company  knew  that 
the  policy  had  been  issued,  and  had  notified  the  agent  that  it 
declined  to  take  the  risk;  of  this,  the  agent  did  not  inform 
plaintiff.  Afterward  the  agent  sent  the  policy  to  the  com- 
pany for  the  indorsement  plaintiff  desired,  and  informed  it 
of  the  transaction  concerning  the  premium.  The  policy  was 
kept  without  notifying  the  agent  that  consent  would  not  be 
given,  or  that  it  would  be  deemed  canceled.  By  its  silence 
the  company  was  held  to  have  ratified  the  act  of  its  agent  in 
accepting  the  responsibility  of  the  broker.^ ^^ 

Plaintiffs  applied  for  insurance  to  one  whom  they  thought 
to  be  defendant's  agent.  He  assumed  to  act  as  such,  wrote  the 
application,  and  sent  it  to  defendant  with  his  name  upon  it 
as  agent.  It  was  received  and  a  policy  issued  in  pursuance  of 
it,  the  name  of  the  assumed  agent  being  upon  it ;  it  was  sent 
to  him,  and  he  remitted  the  premium.  These  acts  amounted 
to  a  recognition  of  the  assumed  agency,  and  defendant  was 
bound  by  his  knowledge  concerning  misdescriptions  in  the 
policy  and  by  his  waiver  of  conditions  therein.^^'^ 

='=' Southern  Life  Ins.  Co.  v.  McCain.  96  U.  S.  84;  Benninghoff  v. 
Agricultural  Ins.  Co.,  93  N.  Y,  495. 

^=' Bennett  v.  Maryland  Fire  Ins.  Co.,  14  Blatchf.  422,  Fed.  Cas. 
No.  1,321. 

°"  Packard  v.  Dorchester  Mut.  Fire  Ins.  Co.,  77  Me.  144. 


8  120  DUTIES  AND  LIABILITIES    OF  AGENTS.  267 

B.  had  power  of  attorney  from  A.  to  sign  his  name  to  poli- 
cies of  insurance.  B.  signed  a  slip  for  a  policy,  and  his  clerk, 
in  his  absence  and  for  him,  executed  a  policy  conformably  to 
the  slip.  After  it  was  so  executed  it  was  shown  to  A.  and 
he  offered  terms  of  settlement.  Held,  an  adoption  of  the 
clerk's  act.^^^  In  defense  to  an  action  on  a  policy,  a  breach 
of  warranty  was  alleged.  It  w\as  replied  that  the  statements 
relied  on  as  wai-ranties  w^ere  inserted  in  the  application  by  the 
agent  of  defendant,  without  fraud  or  collusion  on  plaintiff's 
part.  It  appeared  that  J.  &  W.  were  doing  business  to- 
gether as  insurance  agents,  J.  being  general  agent  of  the  H. 
company ;  they  induced  plaintiff  and  M.  to  sign  a  blank  ap- 
plication for  insurance  upon  the  lattery's  life,  which  was 
filled  up  by  W.,  signed  by  him  as  agent,  and  delivered  to  J., 
who  went  wuth  it  to  the  office  of  the  W.  company,  where  he 
was  presented  by  an  officer  of  H.  company  as  its  general 
agent.  The  president  of  the  W.  company  struck  out  of  the 
application  the  printed  word  "Home"  and  inserted  in  lieu 
thereof  "World  Mutual,"  accepted  the  risk,  allowed  J.  the 
usual  agent's  commission,  and  the  transaction  and  his  name 
as  agent  were  entered  in  the  company's  books ;  and  the  policy 
and  premium  receipt  wTre  delivered  to  J.,  who  gave  them  to 
plaintiff.  Held,  that  the  W.  company  adopted  the  acts  of  J. 
&  W.  and  was  estopped  from  claiming  a  warranty. 


329 


Duties  and  Liabilities  of  Agents. 

§  120.  The  duties  and  liabilities  of  an  insurance  agent  to  his 
principal  depend  upon  the  terms  and  nature  of  his  employ- 
ment, and  the  character  of  the  work  assigned  to  him. 

The  agent  must  obey  instructions  and  discharge  his  duties 
with  absolute  honesty,  and  with  reasonable  prudence  and  dili- 
gence. 

'='  Mason  v.  Joseph,  1  Smith,  J.  P.  Eng.  406. 
»-^  Mowry  v.  Rosendale,  74  N.  Y.  360. 


268  AGENTS.  §  120 

He  is  liable  to  his  principal  for  damages  resulting  from  his 
failure  so  to  do. 

An  agent  who  is  employed  to  insure,  or  who  agrees  to  insure 
property,  and  wilfully  neglects  so  to  do,  is  liable  to  the  same 
extent  the  insurer  would  have  been  if  the  property  had  been 
insured  according  to  instructions  or  agreement. 

To  Insurer. 

The  absolute  duty  of  an  agent  depends  to  some  extent 
upon  the  character  of  his  agency  and  the  nature  of  his  em- 
ployment. An  agent  must  always  obey  his  instructions  and 
discharge  his  duties  to  his  principal  with  good  faith,  and 
reasonable  care,  and  diligence,  and  for  failure  so  to  do  he  can 
be  compelled  to  respond  in  damages.  If  an  agent  disobeys 
instructions,  he  cannot  shield  himself  by  proof  that  he  in- 
tended to  benefit  his  principal.  When  he  is  invested  with 
dis6retion  in  certain  matters,  he  is  only  responsible  for  good 
faith  and  the  honest  exercise  of  his  best  judgment.  If  his 
instructions  are  vague,  or  indefinite,  and  susceptible  of  dif- 
ferent interpretations,  the  agent  is  warranted  and  protected 
in  any  reasonable  construction  which  lie  honestly  and  in  good 
faith  adopts.^^^  He  is  bound  to  have  knowledge  of  the  existing 
usages  of  the  place  where  he  does  business,  and  must  conform 
tbereto.^^^  And  it  is  the  duty  of  a  sub-agent  who  is  subject 
to  the  authority  of  a  superior  agent  who  acts  for  the  insurer, 
to  obey  such  orders  as  his  superior  may  give  him  relative  to 
the  business  of  the  company  and  risks  taken  by  him.     Thus, 

^'^'^  Royal  Ins.  Co.  v.  Clark,  61  Minn.  476;  Phoenix  Ins.  Co.  v.  Pratt. 
36  Minn.  409;  Shaw  v.  Aetna  Ins.  Co.,  49  Mo.  578  (agent  of  assured) ; 
Hanover  Fire  Ins.  Co.  v.  Ames,  39  Minn.  150;  Washington  F.  &  M. 
Ins.  Co.  V.  Chesebro,  35  Fed.  477;  Phoenix  Ins.  Co.  v.  Frissell,  142 
Mass.'  513;  Grace  v.  American  Cent.  Ins.  Co.,  109  U.  S.  278;  Green- 
leaf  V.  Moody,  13  Allen  (Mass.),  363;  Winne  v.  Niagara  Fire  Ins. 
Co.,  91  N.  Y.  185;  Ewell'a  Evans,  Agency,  §§  234,  327  et  seq.;  Story, 
Agency,  §  165  et  seq. 

'■*'■  Mallough  V.  Barber,  4  Camp.  150. 


I  120  DUTIES    AND  LIxiBILITIES  OF  AGENTS.  2G{> 

if  a  state  agent  directs  a  local  agent  to  cancel  a  risk 
taken  by  liim  and  the  order  is  not  obeyed,  the  insurer  can  re- 
cover from  the  latter  the  amount  it  is  compelled  to  pay  upon  a 
loss  by  reason  of  the  jjolicy  not  being  cancelled.^^^ 

Where  an  agent  issues  a  policy  upon  a  forbidden  risk,  and 
later  fails  to  obey  the  directions  of  his  company  txD  cancel  the 
policy,  he  is  liable  to  the  insurer  for  the  amount  the  insurer 
has  to  pay  upon  a  loss  subsequently  occurring.^^^  And  it  it? 
no  defense  to  show  that  the  agent  had  given  directions  to 
cancel  the  policy  to  the  broker  through  whom  the  insurance 
had  been  obtained,  notwithstanding  an  offer  to  prove  that  it 
was  the  universal  custom  of  all  insurance  agents  to  give  such 
orders  to  the  broker  who  obtained  the  business.^^^  It  is  in- 
cumbent upon  an  agent  to  obey  orders  with  all  reasonable 
dispatch.  Thus  in  a  Massachusetts  case,  defendant,  an  agent 
for  plaintiff,  received  orders  to  cancel  a  policy  he  had  issued. 
The  letter  containing  this  instniction  was  received  the  day 
after  it  was  written ;  and  the  evidence  tended  to  show  that 
defendant  could  have  notified  insured  within  half  an  hour 
after  it  was  received.  Defendant  was  agent  for  another  com- 
pany, and  on  the  day  the  letter  was  received  wrote  a  policy 
therein,  which  he  designed  to  take  the  place  of  plaintiff"'.? 
policy,  but  did  not  inform  insured  of  anything  concerning  the 
matter  until  after  his  property  was  burned,  five  days  later, 
and  the  court  held  that  this  evidence  warranted  a  finding  that 
defendant  did  not  exercise  such  diligence  as  was  required,  and 
that  an  action  was  maintainable  against  him  to  recover  the 
amount  which  plaintiff  paid.^^^ 

'"Phoenix  Ins.  Co.  v.  Pratt,  36  Minn.  409,  31  N.  W.  454. 
''' Hanover  Fire  Ins.  Co.  v.  Ames,  39  Minn.  150;  Sun  Fire  Office  v. 
Ermentrout,  11  Pa.  Co.  Ct.  R.  21,  21  Ins.  Law  J.  1055. 
=•''  Franltlin  Ins.  Co.  v.  Sears,  21  Fed.  290. 
'"  Phoenix  Ins.  Co.  v.  Frissell.  142  Mass.  513. 


270  *  AGENTS.  §  120 

But  the  agent  does  not  incur  liability  tlirough  tlie  failure 
to  do  his  whole  duty,  where  he  acts  in  good  faith  and  his  act 
does  not  prejudice  his  principal.  The  following  circum- 
stances were  held  to  give  the  insurer  only  a  right  to  recover 
nominal  damages  at  most,  viz. :  Defendant,  as  agent  for 
plaintiif,  solicited  and  obtained  an  application  for  insurance 
upon  a  building  which  was  being  erected  for  a  hotel.  It  was 
not  quite  completed  and  was  not  used  for  that  purpose  when 
the  application,  which  described  it  as  occupied  as  a  hotel,  was 
made.  Defendant  knew  the  facts  but  did  not  notify  plaintiff. 
A  loss  occurred  before  the  building  was  occupied,  and  insurer 
was  held  liable  because  of  tlie  knowledge  of  its  agent.  The 
agent  acted  in  good  faith,  and  the  contract  was  not  less  valu- 
able to  plaintiff  than  it  would  have  been  if  the  facts  cor- 
responded with  the  statements  in  the  application. ^^^ 

To  Insured  or  Applicant. 

An  agent  who  undertakes  to  procure  insurance  upon  cer- 
tain property  must  place  the  insurance  promptly  with  com- 
panies of  reputed  responsibility  and  good  credit.^^'^  If  he 
unjustifiably  fails  to  procure  the  same,  he  thereby  assumes  the 
risk,  and  becomes  liable  in  case  of  loss  to  pay  as  much  thereof 
as  would  have  been  covered  by  the  policy  he  agreed  to  procure, 
if  the  same  had  been  issued.  And  if  an  agent  representing 
several  insurance  companies  orally  insures  property  from  a 
given  time,  and  agrees  to  issue  a  policy  thereon,  but  by 
reason  of  no  particular  company  being  agreed  upon,  the  con- 
tract is  not  complete,  and  through  omission  of  the  agent  no 
policy  is  issued  before-  a  loss  occurs  upon  such  property,  the 
agent  is  liable  to  the  extent  of  the  amount  of  the  policy  he 

"^^  State  Ins.  Co.  v.  Richmond,  71  Iowa,  519,  32  N.  W.  496. 
^'Hrirell  v.  Bullard,  3  Fost.  &  F.  445;   2  Phillips,  Ins.   (3d  Ed.), 
p.  553,  §  1895;  1  Joyce.  Ins.  p.  821. 


§120  DUTIES    AND    LIABILITIES    OF    AGENTS.  271 

agreed  to  issue,  not  exceeding  in  any  case  tlie  amount  of  tlie 
actual  loss."^^ 

Notwithstanding  a  valid  insurance  may  exist,  an  agent  is 
liable  for  the  amount  received  by  him  as  premium  on  failure 
to  keep  his  agreement  to  deliver  a  policy.^"^^ 

If  an  agent  who  has  received  the  premium  for  insurance 
has  not  paid  it  to  his  principal,  or  assumed  any  liability  on 
account  of  it  before  the  latter  becomes  insolvent,  and  the  per- 
son who  has  paid  the  money  notifies  the  agent  that  he  claims 
it  and  does  not  rely  upon  the  policy,  the  agent  is  liable  to  him 
for  the  amount,  though  the  policy  was  not  surrendered  until 
after  suit  was  brought.  ^^° 

An  action  of  deceit  was  held  to  lie  in  favor  of  the  insured 
against  an  insurance  agent  under  the  following  circumstances : 
A.,  an  agent  for  an  insurance  company,  solicited  B.  to  take 
insurance  upon  store  premises.  B.  assented ;  A.  handed  him 
a  policy  and  received  the  premium.  Observing  a  restrdction 
in  the  policy  concerning  keeping  petroleum  without  written 
consent  from  the  company,  B.  remarked  that  he  was  obliged 
to  keep  a  little,  and  inquired  whether  the  fact  ought  not  to 
be  noted  on  the  policy.  A.  assured  him  that  the  policy  was 
all  right,  and  that  so  long  as  a  single  barrel  of  petroleum  only 
Avas  kept,  it  was  never  taken  notice  of ;  that  it  was  only  when  it 
was  kept  in  large  quantities  that  it  should  be  noted  on  the 
policy.     B.  accepted  the  policy  on  the  faith  of  these  represen- 

"'Stadler  v.  Trever,  86  Wis.  42,  56  N.  W.  187;  Lindsay  v.  Petti- 
grew,"  5  S.  D.  500,  59  N.  W.  726;  3  Sutherland,  Damages,  9;  Smith 
V.  Price,  2  Fost.  &  F.  748;  Perkins  v.  Washington  Ins.  Co.,  4  Cow. 
(N.  Y.)  645;  Shoenfeld  v.  Fleisher,  73  111.  404;  Beardsley  v.  Davis, 
52  Barb.  (N.  Y.)  159.  See,  also,  Sanches  v.  Davenport,  6  Mass.  258. 
As  to  what  completes  the  contract,  see  Arrott  v.  Walker,  118  Pa.  St. 
249. 

"'Collier  v.  Bedell,  39  Hun  (N.  Y.).  238. 

""  Smith  V.  Binder,  75  111.  492. 


272  '  AGENTS.  §  120 

tations.  After  a  loss  lie  sued  tlie  company  and  was  nnsuc- 
cessful  because  a  barrel  of  petroleum  had  been  kept,  and  A. 
had  no  authority  to  waive  the  condition.  The  court  decided 
that  A.  was  personally  liable  for  the  loss,  having  given  a 
positive  assurance  in  excess  of  his  authority  and  that  the  fact 
that  he  might  have  been  guilty  of  no  intentional  fraua.  or 
moral  turptitude  did  not  exempt  him  from  liability.^ ^^ 

*^  Kroeger  v.  Pitcairn,  101  Pa.  St.  311.     See  note  13. 


CHAPTER  IX. 

INSURABLE  INTEREST. 

§  121-122.  In  Property — Necessity  and  Nature. 

123-124.  Duration  and  Continuance. 

125-127.  In  Lives. 

In  Propeety  —  Necessity  and  Nature. 

§  121.  It  is  essential  to  the  existence  of  a  valid  contract  of 
insurance,  in  respect  to  property  or  a  property  interest,  that 
the  payee  have  an  insurable  interest  in  the  subject  matter  in- 
sured. 

§  122.  Any  one  has  an  insurable  interest  in  property  when 
he  is  so  situated  in  respect  to  it,  or  has  such  relation  to  or  con- 
cern in  it,  or  liability  in  connection  with  it,  that  he  is  directly 
and  pecuniarily  interested  in  and  benefited  by  its  preserva- 
tion, and  would  be  directly  and  pecuniarily  prejudiced  and 
damaged  in  respect  to  it  by  the  happening  or  occurrence  of  the 
loss,  damage,  peril  or  event  insured  against. 

The  insured  must  have  some  kind  of  pecuniary  interest  in 
the  property  or  of  accountability  for  its  safety,  and  he  can  only 
recover  to  the  extent  of  that  interest.  What  constitutes  an 
insurable  interest  has  been  the  subject  of  much  discussion  in 
the  cases  and  by  authorities,  and  is  often  a  question  of  great 
difficulty.  What  particular  interests  are  insurable  has  fre- 
quently to  be  decided  by  a  consideration  of  the  special  circum- 
stances wherein  the  question  arises.  It  has  well  been  said  that 
"every  interest  in  property,  or  any  relation  thereto  or  liability 
in  respect  thereof,  of  such  a  nature  that  a  contemplated  peril 
might  directly  damnify  the  insured,  is  an  insurable  interest."^ 

'  Civil  Code  Cal.  §  2546;  Civ.  Code  N.  Y.  1366;  Trustees  of  St.  Clara 
Female  Academy  v.  Northwestern  Nat  Ins.  Co.,  98  Wis.  257,  73 
N.  W.  769. 

KERR,  INS.— 18 


274r  INSURABLE    INTEREST.  §  122 

Contracts  of  incurance,  where  tlie  insured  liad  no  interest, 
■were  permitted  at  common  law,  but  the  manifest  evils  attend- 
ing such  contracts  and  the  temptation  which  they  afforded 
for  fraud  and  crime  led  to  the  enactment  in  England  of 
Statute  18  Geo.  II.  c.  37,  prohibiting  wager  policies,  and  this 
has  been  followed  bj  the  enactment  of  some  similar  statutes 
in  America.^  Though  an  insurable  interest  is  necessary  to 
support  a  policy  and  to  take  it  outside  of  the  rule  prohibiting 
wagers,  thi^  interest  need  not  necessarily  be  a  right  which  can 
legally  be  enforced  against  the  property ;  it  need  not  be  an 
interest  which  may  be  called  ownership.  A  direct  pecuniary 
interest  in  the  property  insured,  of  such  a  nature  that  the  in- 
sured will  be  damaged  and  suffer  pecuniary  loss  by  the  hap- 
pening of  the  event  insured  against,  is  sufficient.  Whenever 
there  is  a  real  interest  to  protect,  and  a  person  is  so  situated 
with  respect  to  the  subject  of  insurance  that  its  destruction 
would,  or  might  reasonably  be  expected  to,  impair  the  value 
of  that  interest,  an  insurance  on  such  interest  would  not  be  a 
wager,  whether  the  interest  was  an  ownership  in  or  right  to  the 
possession  of  the  property,  or  simply,  an  advantage  of  a  pe- 
cuniary character  having  a  legal  basis  but  dependent  upon  the 
continued  existence  of  the  subject.  An  insurable  interest 
may  be  legal  or  equitable,  vested  or  contingent,  existing  or 
inchoate,  but  it  must  be  more  than  a  mere  hope  or  expectation, 

^  Craufurd  v.  Hunter,  8  Term  R.  13;  Alsop  v.  Commercial  Ins. 
Co.,  1  Sumn.  467,  Fed.  Cas.  No.  262;  Williams  v.  Smith,  2  Caines  Cas. 
(N.  Y.)   13. 

The  obtaining  of  Insurance  on  the  property  in  which  the  insured 
has  no  interest,  whether  covered  by  an  open  or  valued  policy,  comes 
under  the  head  of  a  wagering  contract,  and  is  illegal  and  void. 
Waugh  v.  Beck,  114  Pa.  St.  422.  But  the  insured  need  not  have  the 
legal  title.  It  is  sufficient  if  he  be  the  beneficial  owner.  Lebanon 
Mut.  Ins.  Co.  V.  Erb,  112  Pa.  St.  149. 


§§  123j  124  DUKATION  AND  CONTINUANCE.  275 

wliicli  may  be  frustrated  by  tbe  happening  of  some  event.' 
Different  parties  may  have  an  insurable  interest  in  tlie  same 
subject  matter.^  And  the  same  party  may  have  different 
insurable  interests  in  the  same  subject  mattsr  because  of  his 
different  relations  thereto.^ 

Same  —  Dueation"  and  Continuance. 

§  123.  This  insurable  interest  must  exist  at  some  time  dur- 
ing the  life  of  the  risk  and  at  the  time  of  the  loss.« 

§  124.  In  the  absence  of  a  specific  provision  in  the -policy- 
avoiding  it  for  alienation,  an  interruption  or  temporary  sus- 
pension of  interest  is  not  fatal  to  the  right  of  the  insured  to  re- 
cover to  the  extent  of  his  interest  at  the  time  of  loss.^ 

'Rohrbach  v.  Germania  Fire  Ins.  Co.,  62  N.  Y.  47;  National  Filter- 
ing Oil  Co.  V.  Citizens'  Ins,  Co.,  106  N.  Y.  535;  Strong  v.  Manufact- 
urers' Ins.  Co.,  10  Pick.  (Mass.)  40;  Horsch  v.  Dwelling  House  Ins. 
Co.,  77  Wis.  4;  Warnock  v.  Davis,  104  U.  S.  775;  Wainer  v.  Milford 
Mut.  Fire  Ins.  Co.,  153  Mass.  335;  Reynolds  ^.  Iowa  &  N.  Ins.  Co., 
80  Iowa,  563,  46  N.  W.  659;  Bayles  v.  Hillsborough  Ins.  Co.,  27  N.  J. 
Law,  163;  Eastern  R.  Co.  v.  Relief  Fire  Ins.  Co.,  98  Mass.  420;  Swift 
V.  Vermont  Mut.  Fire  Ins.  Co.,  18  Vt.  305;  Illinois  Mut.  Fire  Ins. 
Co.  V.  Andes  Ins.  Co.,  67  111.  262;  Fenn  v.  New  Orleans  Mut.  Ins.  Co., 
53  Ga.  578;  Riggs  v.  Commercial  Mut.  Ins.  Co.,  125  N.  Y.  12;  Helvetia 
Swiss  Fire  Ins.  Co.  v.  B.  P.  Allis  Co.,  11  Colo.  App.  264,  53  Pac.  242; 
Sawyer  v.  Dodge  County  Mut.  Ins.  Co.,  37  Wis.  503;  Coursin  v.  Penn- 
sylvania Ins.  Co.,  46  Pa.  St.  323;  United  States  v.  American  Tobacco 
Co.,  166  U.  S.  468. 

*  Harris  v.  York  Mut.  Ins.  Co.,  50  Pa.  St.  341;  Fox  v.  Phoenix  Fire 
Ins.  Co.,  52  Me.  333;  Ely  v.  Ely,  80  111.  532;  Insurance  Co.  v.  Haven, 
95  U.  S.  242. 

°  Germania  Fire  Ins.  Co.  v.  Thompson,  95  U.  S.  547. 

'Hooper  v.  Robinson,  98  U.  S.  528;  Lockhart  v.  Cooper,  87  N.  C. 
149,  But  it  has  sometimes  been  held  that  the  insurer  must  have  an 
insurable  interest  both  at  the  time  the  insurance  was  effected  and 
at  the  time  of  the  loss.  Chrisman  v.  State  Ins.  Co.,  16  Or.  283; 
Sadlers'  Co.  v.  Eadcock,  2  Atk.  554.  See,  also,  Fowler  v.  New  York 
Ind.  Ins.  Co.,  26  N.  Y.  422;  Graham  v.  Firemens'  Ins.  Co.,  2  Disn. 
(Ohio)  255;  Folsom  v.  Merchants'  Mut.  Marine  Ins.  Co.,  38  Me.  414. 

'Worthington  v.  Bearse,  12    Allen   (Mass.),  382;    Lane  v.  Maine 


276  INSURABLE  INTEREST.  §  124r 

Illustrations  of  Insurable  Interests  in  Property. 

Each  of  the  following  has  an  insurable  interest  in  the 
property  designated: 

An  "owTier"  of  property  or  of  a  di\dded  or  undivided  por- 
tion thereof  or  interest  therein,  to  the  extent  to  which  he  would 
be  damnified  by  its  damage  or  destruction;^  a  "mortgagor," 
so  long  as  he  retains  an  ownership  in  the  whole  or  some  part 
of  the  property  he  has  mortgaged;^  a  "mortgagee"  in  the 
property  or  premises  to  the  extent  of  the  unpaid  debt  or  con- 
tingent claim  secured  by  his  mortgage ;  ^^  and  different  mort- 
gagees of  the  same  property  may  each  insure  his  independent 
interest, ^^  which  interest  is  destroyed  by  the  payment  of  the 
debt  or  the  discharge  and  satisfaction  of  the  obligation  or  lia- 
bility secured,^ ^  but  not  by  an  executory  contract  to  convey 

Mut.  Fire  Ins.  Co.,  3  Fairf.  (Me.)  44;  Peoria  M.  &  F.  Ins.  Co.  v. 
Anapow,  51  111.  283;  Mills  v.  Farmers'  Ins.  Co.,  37  Iowa,  400.  See, 
also,  Kempton  v.  State  Ins.  Co.,  62  Iowa,  83;  Planters'  Mut.  Ins,  Co. 
V.  Rowland,  66  Md.  236;  Power  v.  Ocean  Ins.  Co.,  19  La.  28.  See 
post,  "Alienation." 

^Castner  v.  Farmers'  Mut.  Fire  Ins.  Co.,  46  Mich.  15;  David  v.- 
Williamsburgh  City  Fire  Ins.  Co.,  83  N.  Y.  265;  Stephens  v.  Illinois 
Mut.  Fire  Ins.  Co.,  43  111.  327;  Norwich  Fire  Ins.  Co.  v.  Boomer,  52 
111.  442;  Foley  v.  Manufacturers'  &  B.  F.  Ins.  Co.,  152  N.  Y.  131; 
United  States  v.  American  Tobacco  Co.,  166  U.  S.  468;  Hooper  v. 
Robinson,  98  U.  S.  528.     See  ante,  notes  3-5. 

*  Lycoming  Fire  Ins.  Co.  v.  Jackson,  83  111.  302.  Even  after  fore- 
closure, but  before  the  expiration  of  the  time  for  redemption.  Rich- 
land County  Mut.  Ins.  Co.  v.  Sampson,  38  Ohio  St.  672;  Essex  Sav. 
Bank  v.  Meriden  Fire  Ins.  Co.,  57  Conn.  335,  17  Atl.  930,  18  Atl.  324; 
Walsh  V.  Philadelphia  Fire  Ass'n,  127  Mass.  383, 

"Traders'  Ins.  Co.  v.  Robert,  9  Wend.  (N.  Y.)  404;  Haley  v.  Man- 
ufacturers' F,  &  M,  Ins.  Co.,  120  Mass.  292;  Westchsster  Fire  Ins. 
Co.  V.  Foster.  90  111.  121. 

"  Fox  V.  Phoenix  Fire  Ins.  Co.,  52  Me.  333. 

^^  Sussex  County  Mut.  Ins.  Co.  v.  Woodruff,  26  N,  J,  Law,  541;  Car- 
penter V.  Providence  W.  Ins.  Co.,  16  Pet.  (U.  S.)  495, 


§  124  DURATION  AND  CONTINUANCE.  277 

such  interest  ;^^  a  "bailor"  has  an  insurable  interest  so  long 
as  he  remains  an  owner  of  the  property  bailed ;  a  "bailee"  in 
the  bailed  property  in  his  possession,  to  the  extent  of  his 
i^pecial  interest  in  such  property,  or  his  lien  against  it,  or  his 
liability  as  insurer  of  it;^^  a  "pledgor"  as  an  owner  of  the 
property  bailed  ;^^  an  "inn-keeper"  in  the  goods  or  property 
of  his  guests  to  the  extent  to  which  he  is  responsible  for  their 
safe-keeping  and  protection;^''  a  "common  carrier"  in  prop- 
erty in  its  care  and  possession,  and  in  its  own  name  may  sue 
for  and  recover  the  value  of  the  property  damaged  or  de- 
stroyed, holding  the  excess  over  its  own  interest  for  the 
benefit  of  the  owner  j^''  a  "warehouseman"  in  merchandise 
held  by  him  as  his  own,  or  in  trust  or  storage,  to  the  extent 
of  his  lien  upon  the  merchandise,  or  his  liability  for  its 
safe  keeping  ;i^  a  "commission  merchant"  who  has  the  cus- 
tody of,  or  is  responsible  for,  property  consigned  to  him,  in 
such  property  to  its  full  value  ;^^  a  "consignor"  so  long  as  he 

"Haley  v.  Manufacturers'  F.  &  M.  Ins.  Co.,  120  Mass.  292;  Smith 
v.  Columbia  Ins.  Co.,  17  Pa.  St.  253. 

"Aetna  Ins.  Co.  v.  Jackson,  16  B.  Mon.  (Ky).  258;  California  Ins. 
Co.  V.  Union  Compress  Co.,  133  U.  S,  387.;  Providence  County  Bank 
V.  Benson.  24  Pick.  (Mass.)  204. 

"Nussbaum  v.  Northern  Ins.  Co.,  37  Fed.  524;  Waring  v.  In- 
demnity Fire  Ins.  Co.,  45  N.  Y.  607;  Home  Ins.  Co.  v.  Baltimore  W. 
Co.,  93  U.  S.  527. 

"  Eastern  R.  Co.  v.  Relief  Fire  Ins.  Co.,  98  Mass.  420. 

"Liverpool  &  L.  &  G.  Ins.  Co.  v.  McNeill  (C.  C.  A.),  89  Fed.  131; 
Fire  Ins.  Ass'n  v.  Merchants'  &  Miners'  Transp.  Co..  66  Md.  339; 
Home  Ins.  Co.  v.  Peoria  &  P.  U.  Ry.  Co.,  178  111.  64,  52  N.  E.  862; 
Phoenix  Ins.  Co.  v.  Erie  &  W.  Transp.  Co.,  117  U.  S.  312.  And  may- 
insure  itself  against  the  carelessness  of  its  own  employees.  Cali- 
fornia Ins.  Co.  v.  Union  Compress  Co.,  133  U.  S.  387. 

''Pittsburgh  Storage  Co.  v.  Scottish  U.  &  N.  Ins.  Co.,  168  Pa.  St. 
522.  See,  also,  California  Ins.  Co.  "v.  Union  Compress  Co.,  133  U  S 
387. 

"•Baxter  v.  Hartford  Fire  Ins.  Co.,  11  Biss.  306,  12  Fed.  481;  St. 
Paul  F.  &  M.  Ins.  Co.  v.  Kelly,  43  Kan.  741;  Ferguson  v.  Pekin 
Plow  Co.,  141  Mo.  161,  42  S.  W.  711. 


278  INSURABLE  INTEREST.  §  124 

retains  an  interest  in  tlie  property  consigned  and  to  tlie  extent 
of  that  interest;^''  a  "consignee  or  factor ;"2^  an  "agent," 
when  in  possession  of  property  or  responsible  for  its  safety 
or  protection  ;^^  a  "trustee"  in  the  trust  property  held  by 
him  as  such,^^  a  cestui  que  trust}^  an  "assignee,"^^  and  a 
"receiver,"^^  in  the  property  held  by  them  in  their  respect- 
ive capacities;  a  "stockholder"  in  a  corporation  organized 
for  pecuniary  profit  has  an  interest  in  the  property 
of  the  corporation,  even  though  that  interest  does  not 
amount  to  an  estate,  either  legal  or  equitable,  in  the  property 
insured  ;^'^  an  "indorser  or  surety,"  e.  g.  the  liability  of  a 
mortgagee  as  indorser  of  a  mortgage  note  to  the  assignee  of 
the  mortgage  gives  him  an  insurable  interest  in  the  mortgaged 
property  ;28  go  a  mortgagor  who  remains  liable  on  the  mort- 
gage note  retains  an  insurable  interest  in  the  property  mort- 
gaged, though  he  conveys  his  legal  title  to  it;^'^   a  "rein- 

="  See  ante,  note  6. 

"Gordon  v.  Wright,  29  La.  Ann.  812;  Milburn  Wagon  Co.  v. 
Evans,  30  Minn.  89;  Johnson  v.  Campbell,  120  Mass,  449;  Shaw  v. 
Aetna  Ins.  Co.,  49  Mo.  578;  Hough  v.  Peoples'  Fire  Ins.  Co.,  36  Md. 
398. 

"  See  ante,  "Consignee,"  "Warehouseman,"  "Bailee." 

"Young  v.  Union  Ins.  Co.,  24  Fed.  279;  Dick  v.  Franklin  Fire  Ins. 
Co.,  81  Mo.  103;  Carpenter  v.  Providence  W.  Ins.  Co.,  16  Pet.(U.  S.) 
495. 

"Gordon  v.  Massachusetts  F.  &  M.  Ins.  Co.,  2  Pick.  (Mass.)  249. 

^  Sibley  v.  Prescott  Ins.  Co.,  57  Mich.  14. 

»« Thompson  v.  Phoenix  Ins.  Co..  136  U.  S.  287. 

=^Riggs  v.  Commercial  Mut.  Ins.  Co.,  125  N.  Y.  7;  Seaman  v.  En- 
terprise F.  &  M.  Ins.  Co.,  18  Fed.  250,  21  Fed.  778;  Warren  v,  Daven- 
port Fire  Ins.  Co.,  31  Iowa,  464.  See  Creed  v.  Sun  Fire  OflBce  of 
London,  101  Ala.  522. 

^  Williams  v.  Roger  Williams  Ins.  Co.,  107  Mass.  377. 

=">  Hanover  Fire  Ins.  Co.  v.  Bohn,  48  Neb.  743,  67  N.  W.  774;  Caley 
V.  Hoopes,  86  Pa.  St.  493;  Germania  Fire  Ins.  Co.  v.  Thompson,  95 
U.  S.  547. 


§  124  DURATION  AND  CONTINUANCE.  279 

surer  j"^"  "one  who  lias  an  interest  in  royalties ;"  one  who  has 
a  contract  with  the  owners  of  a  factory  entitling  him  to  the 
payment  of  royalties  on  the  output  of  the  factory,  has  an 
insurable  interest  in  it;^^  "co-partners,"  in  the  partnership 
property  ;^^  a  "creditor;"  one  who  has  bought  goods  on  credit 
for  the  benefit  of  the  seller,  when  the  insurer  agrees 
to  tlie  arrangement.^^  The  creditor  of  a  deceased  debtor 
whose  estate  is  insufficient  to  pay  the  debts,  has  an  insurable 
interest  in  the  property  of  the  estate,  which  by  law,  may  be 
subjected  by  proceedings  in  rem  to  the  payment  of  the  debts ; 
but  the  recovery  cannot  exceed  the  amount  of  the  insurable 
interest  ;^^  a  "sheriff"  or  other  officer  who  takes  goods  under  a 
writ  of  attaclmient  acquires  a  special  property  in  the  goods 
so  taken,  which  constitutes  an  insurable  interest  ;^^  and  the 
receiptor  of  goods  attached  may  insure  them  in  his  own 
name,^®  and  also  the  attaching  or  levying  creditor.^^  "Les- 
see and  lessor;"  a  leasehold  interest  in  real  estate  is   an 

'°  See  post,  c.  19,  "Reinsurance." 

"'  National  Filtering  Oil  Co.  v.  Citizens'  Ins.  Co.,  34  Hun,  556,  106 
N.  Y.  535. 

'=  Converse  v.  Citizens'  Mut.  Ins.  Co.,  10  Cush.  (Mass.)  37;  Phoenix 
Ins.  Co.  V.  Hamilton,  14  Wall.  (U.  S.)  504;  Manhattan  Ins.  Co.  v. 
Webster,  59  Pa.  St.  227;  Grabbs  v.  Farmers'  Mut.  Fire  Ins.  Ass'n, 
125  N.  C.  389,  34  S.  E.  503;  Harvey  v.  Cherry,  76  N.  Y.  436.  See 
ante,  note  1. 

^^Roos  V,  Merchants'  Mut.  Ins.  Co.,  27  La.  Ann.  409;  Bates  v. 
Equitable  Ins.  Co.,  10  Wall.  (U.  S.)  33;  Guiterman  v.  German- 
American  Ins.  Co..  Ill  Mich.  626. 

"  Creed  v.  Sun  Fire  Office  of  London,  101  Ala.  522,  23  L.  R.  A.  177; 
Spare  v.  Home  Mut.  Ins.  Co.,  8  Sawy.  618,  15  Fed.  707.  The  attach- 
ing creditor  has  an  insurable  interest  in  the  property  attached. 
Rohrbach  v.  Germania  Fire  Ins.  Co..  62  N.  Y.  47;  Donnell  v.  Donnell, 

"•White  V.  Madison,  26  N.  Y.  117;  Franklin  Fire  Ins.  Co.  v.  Find- 
lay,  6  Whart.  (Pa.)  483. 

»» Fireman's  Ins.  Co.  v.  Powell,  13  B.  Men.  (Ky.)  312. 

"Wood,  Fire  Ins.  §§  298-309. 


280  INSURABLE    INTEREST.  §  124 

insurable  interest  ;^^  tlie  landlord  and  tenant  eacli  lias  an 
insurable  interest  in  the  premises  demised,  wliicli  maj  be 
protected  bj  a  contract  of  insurance  ;^^  the  lessor  also  has 
an  insurable  interest  in  such  goods  of  the  lessee  as  are  liable 
to  seizure  for  rent;^*'  a  "tenant  by  curtesy"  has  an  insurable 
interest  in  property  to  ^\'hich  he  holds  such  a  title. ^^  "Pur- 
chaser;" a  mere  qualified  or  equitable  interest  in  property 
is  insurable.  The  purchaser  of  property  under  an  agree- 
ment requiring  pajmient  within  a  certain  time  has  an  insur- 
able interest  during  the  life  of  the  contract,  even  although 
payments  are  not  made  when  due;^^  so  with  one  who  has 
made  a  conditional  agreement  to  purchase.*^  One  in  posses- 
sion" of  a  building  under  an  agreement  with  the  owner  by 
which  he  is  to  occupy  it  and  keep  the  building  in  repair;^* 
and  a  managing  o\vner  in  possession ;  '*^  and  one  in  possession 
and  entitled  to  the  beneficial  use  of  buildings  with  an  oral 

**  Philadelphia  Tool  Co.  v.  British  American  Assur.  Co.,  132  Pa.  St. 
236. 

«»Ely  V.  Ely,  80  111.  532;  Carey  v.  London  P.  F.  Ins.  Co.,  33  Hun 
(N.  Y.),  315;  Insurance  Co.  v.  Haven,  95  U.  S.  242;  Georgia  Home 
Ins.  Co.  V.  Jones,  49  Miss.  80.  And  a  sublessee,  Mitchell  v.  Home  Ins. 
Co.,  32  Iowa,  42. 

*°  Columbia  Ins.  Co.  v.  Cooper,  50  Pa.  St.  331. 

"Kyte  V.  Commercial  Union  Assur.  Co.,  144  Mass.  43;  Harris  v. 
New  York  Mut.  Ins.  Co.,  50  Pa.  St.  341.  See  ante,  p.  ,  "Lessee." 
And  a  life-tenant.  Cross  v.  National  Fire  Ins.  Co.,  132  N.  Y.  133; 
Home  Ins.  Co.  v.  Field,  42  111.  App.  392.  And  a  remainder-man, 
Redfield  v.  Holland  Purchase  Ins.  Co.,  56  N.  Y.  354. 

-^Bohn  Mfg.  Co.  V.  Sawyer,  169  Mass.  477;  Holbrook  v.  St.  Paul 
F.  &  M.  Ins.  Co.,  25  Minn.  229;  Southern  Insurance  &  T.  Co.  v.  Lewis, 
42  Ga.  587;  Cumberland  Bone  Co.  v.  Andes  Ins.  Co.,  64  Me.  466; 
Gilman  v.  Dwelling-House  Ins.  Co.,  81  Me.  488. 

"International  Trust  Co.  v.  Norwich  Union  Fire  Ins.  Soc.  (C.  C. 
A.),  71  Fed.  81. 

"Berry  v.  American  Cent.  Ins.  Co.,  132  N.  Y.  49;  Cross  v.  National 
Fire  Ins.  Co.,  132  N.  Y.  133. 

**The  Fern  Holme,  46  Fed.  119;  The  Gulnare,  42  Fed.  861. 


§  121  DURATION   AND    CONTINUANCE.  2S1 

contract  for  the  convejance  of  tlie  land  on  M-liich  tliey 
stand  ;^^  and  a  purchaser  on  conditional  sale  with  right  to 
nse;^'^  a  "contractor,  materialman  or  mechanic"  in  building 
upon  Avhich  they  have  or  are  entitled  to  a  lien  or  on  buildings 
Avhich  they  are  erecting  under  contract  ;^^  a  "husband"  in  the 
homestead  of  his  wife  which  he  occupies  with  her;^®  a 
husband  and  wife  sometimes  in  each  other's  property  f^  but 
a  husband  has  not  ordinarily  any  insurable  interest  in  his 
wife's  separate  property.^  ^ 

«Horsch  V.  Dwelling  House  Ins.  Co.,  77  Wis.  4,  8  L.  R.  A.  806; 
Bicknell  v.  Lancaster  City  &  County  Fire  Ins.  Co.,  58  N.  Y.  677. 

"Holbrook  v.  St.  Paul  F.  &  M.  Ins.  Co.,  25  Minn.  220;  Franklin 
li'ire  Ins.  Co.  v.  Chicago  Ice  Co.,  36  Md.  120;  Grange  Mill  Co.  v. 
Western  Assur.  Co.,  118  111.  396.  See,  also,  McLean  v.  Hess,  106  Ind. 
555;  Reed  v.  Williamsburg  City  Fire  Ins.  Co.,  74  Me.  537;  Little  v. 
Phoenix  Ins.  Co.,  123  Mass.  380;  Acer  v.  Merchants'  Ins.  Co.,  57  Barb. 
(N.  Y.)  68. 

*^  Insurance  Co.  v.  Stinson,  103  U.  S.  25;  Planters'  &  Merchants' 
Ins.  Co.  V.  Thurston,  93  Ala.  255;  Looney  v.  Looney,  116  Mass.  283. 

^''Merrett  v.  Farmers'  Ins.  Co.,  25  Iowa,  11;  Reynolds  v.  Iowa  & 
N.  Ins.  Co.,  80  Iowa,  563,  46  N.  W.  659. 

'"Clarke  v.  Firemens'  Ins.  Co.,  18  La.  431;  German  American  Ins. 
Co.  V.  Paul  (Indian  T.),  53  S.  W.  442;  Warren  v.  Springfield  F.  & 
M.  Ins.  Co.,  13  Tex.  Civ.  App.  466,  35  S  W.  810;  Miotke  v.  Milwaukee 
Mechanics'  Ins.  Co.,  113  Mich.  166,  71  N.  W.  463;  Field  v.  Insurance 
€o.  of  America,  6  Biss.  121,  Fed.  Cas.  No.  4,767. 

"Agricultural  Ins.  Co.  v.  Montague,  38    Mich.  548;    Traders'  Ins. 
Co.  V.  Newman,  120  Ind.  554. 
Illustrations  of  Xo  Insurable  Interest, 

No  insurable  interest  exists  under  a  parol  contract  made  by  a  mar- 
ried woman  to  convey  land.  Perry  -v.  Mechanics'  Mut.  Ins.  Co.,  11 
Fed.  478;  nor  a  prospective  purchaser  to  whom  the  title  of  the 
property  has  not  passed,  Heald  v.  Builders'  Mut.  Fire  Ins.  Co.,  Ill 
Mass.  38.  The  right  of  reimbursement  from  property,  for  advances 
made  for  its  protection,  until  ascertained  and  defined  by  decree,  is 
so  uncertain  an  interest  that  it  is  not  insurable.  Bishop  v.  Clay  F. 
&  M.  Ins.  Co.,  49  Conn.  167.  The  mere  holding  of  a  judgment  by  a 
vendor  of  real  estate,  against  a  purchaser  to  secure  part  of  the 
money,  does  not  per  se  give  the  vendor  an  insurable  interest  in  the 
property.    Light  v.  Countrymens'  Mut.  Fire  Ins.  Co.,  169  Pa.  St.  310. 


2s2  insurable  interest.  §§  125-12t 

In  Lives. 

§125.  Public  policy  forbids  the  procuring  of  insurance  upon 
a  human  life  by  one  who  has  not  an  insurable  interest  in  that 
life. 

§  126.  To  create  an  insurable  interest  which  will  support  a 
life  insurance  contract  there  must  be  a  reasonable  ground, 
founded  in  the  relations  of  the  parties  —  either  pecuniary,  or 
of  blood,  or  aflQ.nity  —  to  expect  some  benefit  or  advantage  from 
the  continuance  of  the  life  of  the  assured. 

§  127.  It  is  suiflcient  if  such  insurable  interest  exists  at  the' 
time  the  insurance  is  eflTected. 

It  is  a  rule  founded  in  public  policy,  and  is  of  general 
application,  that  the  contract  of  life  insurance  must  be  based 
upon  an  interest  in  the  subject  insured.  In  the  absence  of 
an  insurable  interest  the  policy,  having  nothing  upon  which 
to  operate,  must  be  regarded  as  a  mere  wager  upon  human  life. 
It  is  not  easy  to  define  mtli  precision  what  will  in  all  cases 
constitute  an  insurable  interest,  so  as  to  take  the  contract  out 
of  the  class  of  wager  policies.  An  insurable  interest  is  notv 
necessarily,  a  definite  pecuniary  interest,  such  as  is  recog- 
nized and  protected  at  law.  It  may  be  contingent,  restricted 
as  to  time,  or  indeterminate  in  amount,  but  it  must  be  actual 
and  appreciable,  so  that  the  purpose  of  the  party  effecting 
the  insurance  will  be  to  secure  an  advantage  to  the  beneficiary, 
and  not  merely  to  put  a  wager  upon  human  life.  It  may  be- 
stated  generally  to  be  such  an  interest,  arising  from  the  rela- 
tion of  the  party  obtaining  the  insurance,  either  as  creditor,, 
or  surety  for  the  assured,  or  from  the  ties  of  blood  or  marriage 
to  him,  as  will  justify  a  reasonable  expectation  of  advantage- 
or  benefit  from  the  continuance  of  his  life.  This  expectation- 
of  advantage  or  benefit  need  not  be  always  capable  of  pecun- 
iary estimation,  for  a  parent  has  an  insurable  interest  in  the 
life  of  his  child,  a  husband  in  the  life  of  his  wife,  and  a  wife 
in  the  life  of  her  husband.     The  natural  affection,  in  such 


§  127  IN  LIVES.  283 

cases,  is  considered  as  more  powerful,  as  operating  more 
efficaciously  to  protect  the  life  of  the  insured,  than  any- 
other  consideration.  In  all  cases  there  must  he  a  reasonable 
ground  to  expect  some  benefit  or  advantage  to  the  beneficiary 
from  the  continuance  of  the  life  insured ;  otherwise  the  bene- 
ficiary would  be  directly  interested  in  the  early  death  of  the 
insured.  A  policy  issued  to  one  who  is  not  directly  inter- 
ested in  the  continuance  of  the  life  of  the  insured  has  a  tend- 
ency to  create  a  desire  for  his  death.  Such  policies  are, 
therefore,  independently  of  any  statute  npon  the  subject, 
condemned  as  being  contrary  to  public  policy.^ ^ 

Every  person  has  an  insurable  interest  in  his  0"\\ti  life,  and 
may  effect  an  insurance  thereon  for  the  benefit  of  a  relative 
or  friend.  The  essential  thing  is  that  the  policy  be  obtained 
in  good  faith,'  and  not  for  the  purpose  of  speculating  on  the 
hazard  of  a  life  in  which  the  insured  has  no  interest.^^ 

"^^  Connecticut  Mut.  Life  Ins.  Co.  v.  Schaeffer,  94  U.  S.  457;  Key- 
stone Mut.  Ben.  Ass'n  v.  Norris,  115  Pa.  St.  446;  Lamont  v.  Grand 
Lodge,  31  Fed.  180;  Amick  v.  Butler,  111  Ind.  578;  Ruse  v.  Mutual 
Ben.  Life  Ins.  Co.,  23  N.  Y.  516,  52  Cent.  Law  J.  381. 

"  Bloomington  Mut.  Ben.  Ass'n  v.  Blue,  120  III.  121;  New  York 
Mut.  Ins.  Co.  V.  Armstrong,  117  U.  S.  591;  Provident  Life  Ins.  &  Inv. 
Co.  V.  Baum,  29  Ind.  236.  A  policy  is  not  void  as  a  wager  policy 
where  it  is  not  obtained  for  a  speculative  purpose,  although  the  bene- 
ficiary is  neither  a  creditor,  wife,  child,  parent,  brother,  nor  sister 
of  the  insured.  Kentucky  Life  &  Ace.  Ins.  Co.  v.  Hamilton  (C.  C. 
A.),  63  Fed.  93;  Vivar  v.  Supreme  Lodge,  K.  of  P.,  52  N.  J.  Law, 
455;  Schonfield  v.  Turner,  75  Tex.  324,  7  L.  R.  A.  189;  Hill  v.  United 
Life  Ins.  Ass'n,  154  Pa.  St.  29.  A  suit  may  be  maintained  upon  the 
policy  without  proving  an  insurable  interest.  American  E.  L.  Ins. 
Co.  V.  Barr,  68  Fed.  873, '16  C.  C.  A.  51;  Campbell  v.  New  England 
Mut.  Life  Ins.  Co.,  98  Mass.  381;  Union  Fraternal  League  v.  Walton, 
109  Ga.  1,  46  L.  R.  A.  424.  Compare  Vivar  v.  Supreme  Lodge,  K. 
of  P.,  supra;  Schonfield  v.  Turner,  supra;  Life  Ins.  Clearing  Co.  v. 
O'Neill  (C.  C.  A.),  106  Fed.  800;  and  Ruse  v.  Mutual  Ben.  Life  Ins. 
Co.,  23  N.  Y.  516. 


2 Si  INSURABLE   INTEREST,  §  ^27 

Continuity  of  Interest  in  Life. 

A  life  policy,  valid  when  issued,  docs  not  cease  to  "be  so  by 
the  termination  of  the  interest  of  the  assured  in  the  life 
insured  unless  such  be  the  stipulation  of  the  policy.  The 
law  seems  to  be  well  settled  that  it  is  wholly  unnecessary  to 
prove  an  insurable  interest  in  the  life  of  the  assured  at  the 
maturity  of  the  policy,  if  it  was  valid  at  its  inception;  and 

Illustrations  of  Wager  Policies. 

A  policy  issued  by  a  mutual  life  insurance  company  whereby,  upon 
the  lapse  of  any  policy,  a  sum  equal  in  amount  to  its  reserve  value 
becomes  an  absolute  liability  of  the  company,  to  be  paid  to  existing 
policy  holders  at  a  certain  period,  is  void  as  a  wager  policy.  Fuller 
v.  Metropolitan  Life  Ins.  Co.,  70  Conn.  647.  And  a  policy  obtained 
upon  a  person's  life  by  others,  who  pay  the  premiums  upon  the 
understanding  that  they  are  to  have  the  money  collected  upon  the 
policy,  is  void.  Cisna  v.  Sheibley,  88  111.  App.  385;  Roller  v.  Moore's 
Adm'r,  86  Va.  512,  6  L.  R.  A.  136;  Ruth  v.  Katterman,  112  Pa.  St. 
251;  Warnock  v.  Davis,  104  U.  S.  779;  Missouri  Valley  Life  Ins.  Co. 
V.  McCrum,  36  Kan.  146. 

A  daughter  has  not  necessarily  an  insurable  interest  in  the  life  of 
her  mother.  Continental  Life  Ins.  Co.  v.  Volger,  89  Ind.  572;  Life 
Ins.  Clearing  Co.  v.  O'Neill  (C.  C.  A.),  106  Fed.  800.  The  relation 
of  mother  and  son  between  a  payee  and  a  person  whose  life  is  in- 
sured does  not  per  se  always  constitute  an  insurable  interest.  Pru- 
dential Ins.  Co.  V.  Humm,  21  Ind.  App.  525,  52  N.  E.  772;  Peoples' 
Mut.  Ben.  Soc.  v.  Templeton,  16  Ind.  App.  126,  44  N.  E.  809.  A  son- 
in-law  has  not  an -insurable  interest  in  the  life  of  his  mother-in-law, 
Rombach  v.  Piedmont  &  A.  Life  Ins.  Co.,  35  La.  Ann.  233;  Stam- 
haugh  V.  Blake  (Pa.),  15  Atl.  705;  nor  a  step-son  in  the  life  of  his 
step-father.  United  Brethren  Mut.  Aid  Soc.  v.  McDonald,  122  Pa.  St. 
324.  An  uncle  cannot  recover  on  a  policy  in  his  favor  on  the  life  of 
a  nephew,  unless  he  avers  and  proves  a  pecuniary  interest  therein. 
Prudential  Ins.  Co.  v.  Jenkins,  15  Ind.  App.  297,  43  N.  E.  1056; 
Singleton  v.  St.  Louis  Mut.  Ins.  Co.,  66  Mo.  63. 

A  nephew  has  not  always  an  insurable  interest  in  the  life  of  an 
a,unt,  Riner  v.  Riner,  166  Pa.  St.  617;  nor  a  building  association  In 
the  life  of  a  member,  Tate  v.  Commercial  Bldg.  Ass'n,  97  Va.  74,  33 
S.  E.  382,  45  L.  R.  A.  243;  nor  a  college  supported  by  a  church  in  the 
life  of  a  member  of  that  church,  Trinity  ^  College  v.  Travellers'  Ins. 
Co.,  113  N.  C.  244,  22  L.  R.  A.  291;  nor  an  assignee  in  bankruptcy  in 
the  life  of  the  bankrupt.  In  re  McKinney,  15  Fed.  535. 


§  127  IN  LIVES.  285 

in  tlie  alosence  of  an  express  stipnlatlon  to  the  contrary  tlie 
sum  expressed  on  the  face  of  the  policy  is  the  measure  of 
recovery.  ^^ 

Interest  of  Assignee. 

The  assignment  of  a  policy  of  life  Insurance  to  one  not 
having  an  insurable  interest  in  the  life  insured,  is  as  objec- 
tionable from  the  standpoint  of  public  policy  as  is  the  taking 
out  of  a  policy  under  similar  circumstances.  Nor  is  its  char- 
acter changed  because  it  is  for  a  portion  merely  of  the  insur- 
ance money.  The  law  might  be  easily  evaded  if  the  policy^ 
or  interest  in  it,  could,  in  consideration  of  paying  the  pre- 
miums and  assessments  upon  it,  and  the  promise  to  pay  a 
portion  of  the  proceeds  to  designated  persons,  be  transferred 
so  as  to  entitle  the  assignee  to  receive  the  whole  insurance 
money.  But  a  policy  of  life  insurance  which  does  not  con- 
tain any  prohibition  against  its  assignment  is  assignable  by 
the  insured  for  a  valuable  consideration,  equally  with  any 
other  chose  in  action,  provided  the  assignment  is  made  in 
good  faith,  and  not  to  evade  the  law  against  wager  policies.^^ 

There  are,  however,  cases  opposed  to  this  view,  and  holding 
that  a  valid  policy  of  insurance,  effected  by  a  person  upon 
his  own  life,  is  assignable  like  an  ordinary  chose  in  action, 
and  that  the  assignee  is  entitled  upon  the  death  of  the  insured 
to  the  full  sum  payable  without  regard  to  the  consideration 
paid  for  the  assignment,  or  the  existence  of  an  insurable  inter- 
est in  the  life  of  the  insured.^® 

"Appeal  of  Corson,  113  Pa.  St.  445;  Connecticut  Miit.  Life  Ins,  Co. 
V.  Schaefer,  94  U.  S.  457;  Mutual  Life  Ins.  Co.  v.  Allen,  138  Mass.  24. 

"Franklin  Life  Ins.  Co.  v.  Hazzard,  41  Ind.  116;  Franklin  Life 
Ins.  Co.  V.  Sefton,  53  Ind.  380;  Connecticut  Mut.  Life  Ins.  Co.  v. 
Luchs,  108  U.  S.  503;  Roller  v.  Moore's  Adm'r,  86  Va.  512. 

'"St.  John  V.  American  Mut.  Life  Ins.  Co..  13  N.  Y.  31;  Olmsted  v. 
Keyes,  85  N.  Y.  593;  Martin  v.  Stubbings,  126  111.  387.    In  Valton  v. 


286  INSUEABLE   INTEREST.  §  127 

Interest  of  Creditor  in  Life  of  Debtor. 

A  creditor  has,  for  tlie  purpose  of  indemnifying  himself 
against  loss,  an  insurable  interest  in  the  life  of  his  debtor. 
The  amount  of  insurance  taken  out  by  a  creditor  upon  the  life 
of  his  debtor  cannot  be  grossly  disproportionate  to  the  benefit 
Avhich  might  be  reasonably  supposed  to  accrue  from  the  con- 
tinuance of  the  debtor's  life,  without  leaving  the  transaction 
open  to  the  criticism  of  being  a  speculation  or  wager  upon 
the  hazard  of  a  life.  The  policy  is  valid  in  so  far  as  it  has 
been  obtained  and  is  carried  in  pursuance  of  a  hona  fide  effort 
to  secure  payment  of  the  debt.  If  the  amount  of  the  policy 
is  so  far  in  excess  of  the  debt  and  the  interest  thereon  and 
the  expense  of  carrying  the  insurance,  as  to  indicate  an  in- 
tent of  the  creditor  to  speculate  upon  the  life  of  the  debtor, 
the  policy  will  be  void.^"^ 

National  Fund  Life  Assur.  Co.,  20  N.  Y.  32,  it  was  said  that  one  has 
an  insurable  interest  in  his  own  life,  and  no  use  made  by  him  of  the 
policy  issued  on  his  own  life  can  convert  it  into  a  wagering  con- 
tract. 

^'Rittler  v.  Smith,  70  Md.  261;  Exchange  Bank  of  Macon  v.  Loh, 
104  Ga.  446;  Ulrich  v.  Reinoehl,  143  Pa.  St.  238,  13  L.  R.  A.  433; 
Helmetag's  Adm'r  v.  Miller,  76  Ala.  183. 

A  creditor  of  a  firm  has  an  insurable  interest  in  the  life  of  each 
member  of  the  firm,  and  they  in  turn  have  a  similar  interest  in  the 
life  of  every  other  firm  indebted  to  them.  Mitchell  v.  Union  Life  Ins. 
Co.,  45  Me.  104;  Lewis  v.  PhcEnix  Mut.  Life  Ins.  Co.,  39  Conn.  100; 
Rawls  V.  American  Mut.  Life  Ins.  Co.,  27  N.  Y.  282. 

One  who  advances  money  for  premiums  on  policies  on  another's 
life,  under  the  agreement  by  the  insured  to  repay  the  loans,  is  a 
creditor,  and  has  an  insurable  interest.  Reed  v.  Provident  Sav.  Life 
Assur.  Soc,  36  App.  Div.  250,  55  N.  Y.  Supp.  292. 

The  insurable  interest  of  the  creditor  in  the  life  of  his  debtor  is 
not  affected  by  the  fact  that  the  statute  of  limitations  has  run 
against  it  since  the  insurance  was  effected.  Rawls  v.  American  Life 
Ins.  Co.,  36  Barb.  357,  27  N.  Y.  282. 

Although  a  debtor  has  been  discharged  in  bankruptcy,  a  moral 
obligation  to  pay  his  debts  remains,  which  constitutes  a  good  con- 


§  127  IN  LIVES.  287 

Interest  Founded  on  Eelationship. 

Mere  relationsliip  of  itself  is  not  sufficient  to  create  an 
insurable  interest.  This  relationship  must  be  connected  with 
.a  pecuniary  interest,  or  some  element  of  dependency,  so  that 
the  beneficiary  would,  in  reasonable  probability,  suffer  a 
pecuniary  loss,  or  fail  to  make  a  pecuniary  gain,  by  the  deatli 
of  the  assured.  Sentiment  or  affection  is  not  sufficient,  of 
itself,  to  constitute  an  insurable  interest,  but  the  expected 
benefit  must  consist  in  service,  maintenance  or  the  like.  In 
one  relation  only — the  relation  of  husband  and  wife — is  the 
actual  existence  of  such  a  pecuniary  interest  unimportant; 
the  reason  being  that  the  real  pecuniary  interest  is  found  in 
so  great  a  majority  of  cases  involving  this  relation  that  the 
courts  conclusively  presume  it  to  exist  in  every  case.^^ 

sideration  for  a  new  promise  to  pay,  which  will  give  the  promisee 
an  insurable  interest  in  the  debtor's  life.  Mutual  Reserve  Fund 
Life  Ass'n  v.  Beatty  (C.  C.  A.),  93  Fed.  747. 

A  policy  on  the  life  of  another  for  $3,000,  to  secure  a  debt  of  $70, 
is  a  mere  wager  policy.  Cammack  v.  Lewis,  15  Wall.  (U.  S.)  643. 
And  the  taking  out  of  a  policy  for  a  similar  amount  on  the  life  of 
the  debtor,  by  one  who  was  a  creditor  to  the  extent  of  $302,  and  thd 
payment  of  premiums  amounting  to  $293,  has  been  held  not  dispro- 
portionate. Grant's  Adm'rs  v.  Kline,  115  Pa.  St.  61S.  Compare 
Ulrich  v.  Reinoehl,  143  Pa.  St.  238,  13  L.  R.  A.  433;  Amick  v.  Butler, 
111  Ind.  578;  Exchange  Bank  of  Macon  v.  Loh,  104  Ga.  446. 

'^Warnock  v.  Davis,  104  U.  S.  775.  The  words  "related  to,"  in  a 
statute  permitting  persons  related  to  a  member  of  a  beneiit  society 
to  be  named  as  beneficiaries,  include  relatives  by  affinity  as  well 
as  by  blood.  Bennett  v.  Van  Riper,  47  N.  J.  Eq.  563,  14  L.  R.  A. 
342.  Under  some  constructions  a  step-father  is  a  relative.  Simcoke 
v.  Grand  Lodge,  A.  0.  U.  W.,  84  Iowa,  383,  15  L.  R.  A.  114;  Grand 
Lodge,  A.  O.  U.  W.,  v.  McKinstry,  67  Mo  App.  82;  Hosmer  v.  Welch, 
107  Mich.  470,  65  N.  W.  280,  67  N.  W.  504. 
Illustrations  of  Insurahle  Interest  Among  Relations. 

A  wife  will  have  an  insurable  interest  in  the  life  of  her  husband. 
Central  Bank  of  Washington  v.  Hume,  128  U.  S.  195;  and  a  husband 
in  the  life  of  his  wife,  Watson  v.  Centennial  Mut.  Life  Ass'n,  21  Fed. 
698;  Campbell  v.  New  England  Mut.  Life  Ins.  Co.,  98  Mass.  381;  Cur- 


288  INSURABLE   INTEREST.  §  12T 

Other  Insurable  Interests. 

A  partner  lias  an  insurable  interest  in  his  co-partner's 
life;^^  and  a  master  and  servant  in  each  other's  lives  ;^^  and 
an  apprentice  in  a  master's  life;^^  and  a  master  or  employer 
in  the  servant's  life;^^  a  tenant  in  his  landlord's  life,  where 

rier  v.  Continental  Life  Ins.  Co.,  57  Vt.  496;  a  father  in  the  life  of 
his  minor  son  to  whose  earnings  he  is  entitled,  Loomis  v.  Eagle  L. 
&  H.  Ins.  Co.,  6  Gray  (Mass.),  396;  Grattan  v.  National  Life  Ins.  Co., 
15  Hun  (N.  Y.),  74;  Mitchell  v.  Union  Life  Ins.  Co.,  45  Me.  104;  a 
son  in  the  life  of  his  father  only  when  he  has  a  pecuniary  interest 
in  the  continuance  of  the  father's  life.  Guardian  Mut.  Life  Ins.  Co. 
V.  Hogan,  80  111.  35;  Chicago  Guaranty  Fund  Life  Soc.  v.  Dyon,  79 
111.  App.  100.  Compare  Valley  Mut.  Life  Ass'n  v.  Teewalt,  79  Va. 
421;  Crosswell  v.  Connecticut  Ind.  Ass'n,  51  S.  C.  103,  28  S.  E.  200; 
Reserve  Mut.  Ins.  Co.  v.  Kane,  81  Pa.  St.  154;  Life  Ins.  Cleaning  Co. 
V.  O'Neill  (C.  C.  A.),  106  Fed.  800,  30  Ins.  Law  J.  603. 

A  grandchild  has  not  an  insurable  interest  in  the  life  of  a  grand- 
parent, merely  by  virtue  of  the  relationship.  Burton  v.  Connecticut 
Mut.  Life  Ins.  Co.,  119  Ind.  207.  Compare  Corbett  v.  Metropolitan 
Life  Ins.  Co.,  55  N.  Y.  Supp.  775.  Otherwise  if  the  grandparent 
himself  procures  the  insurance  in  favor  of  the  grandchild.  Elkhart 
Mut.  Aid  B.  &  R.  Ass'n  v.  Houghton,  103  Ind.  286.  A  brother  has  an 
Insurable  interest  in  a  sister's  life,  or  a  sister  in  a  brother's  life, 
where  the  element  of  dependency  exists.  Lord  v.  Dall,  12  Mass, 
115;  Hosmer  v.  Welch,  107  Mich.  470,  65  N.  W.  280,  67  N.  W.  504.  An 
aunt  has  an  insurable  interest  in  the  life  of  her  niece  who  lives 
with  her,  and  whom  she  has  supported  under  circumstances  creating 
a  moral  obligation  on  the  latter's  part  to  assist  the  former  if  neces- 
sary. Cronin  v.  Vermont  Life  Ins.  Co.,  20  R.  I.  570,  40  Atl.  497.  See, 
also,  Morrell  v.  Trenton  Mut.  L.  &  F.  Ins.  Co.,  10  Cush.  (Mass.)  282, 
and  notes  in  57  Am,  Dec.  92. 

"Connecticut  Mut.  Life  Ins.  Co.  v.  Luchs,.  108  U.  S.  498;  Valton  v. 
National  L.  F.  Life  Assur.  Soc,  22  Barb.  (N,  Y.)  9. 

*"  Where  a  servant  is  hired  at  a  certain  salary,  for  a  specified  time, 
he  has  an  insurable  interest  for  that  period  in  the  master's  life, 
Hebdon  v.  West,  3  Best  &  S.  579,  18  Cent.  Law  J.  347;  Carpenter  v. 
United  States  Life  Ins.  Co.,  161  Pa.  St.  9,  28  Atl.  943. 

•='12  West.  Jur.  706. 

»^  Miller  v.  Eagle  L.  &  H.  Ins.  Co.,  2  E.  D.  Smith  (N.  Y.),  292;  Sum- 
ners  v.  United  States  I.  A,  &  T.  Co.,  13  La.  Ann.  504;  Trenton  Mut. 
L,  &  F.  Ins.  Co.  v  Johnson,  24  N.  J.  Law,  576. 


§  127  IN  LIVES.  289 

the  latter  is  liimsclf  only  a  tenant  for  life,  because  the  tenn 
depends  on  the  continuance  of  the  life;*'^  an  insurance  com- 
pany in  the  life  insured  by  it;^'*  a  woman,  sometimes,  in  the 
life  of  her  betrothed;®^  a  girl  in  the  life  of  a  man  who  has 
assumed  parental  relations  towards  her,  although  without  any 
legal  obligation ;  ^^  any  one  dependent  for  support  and  main- 
tenance upon  the  continued  life  of  the  assured;®'^  and  a, 
surety  in  the  life  of  the  principal,  to  the  extent  of  the  surety- 
ship.^^ 

•"  Side  V.  Knickerbocker  Life  Ins.  Co.,  16  Fed.  650. 

"  Dalby  v.  India  &  L.  Life  Assur.  Co.,  15  Com.  B.  385. 

''  McCarthy  v.  New  England  Order  of  Protection,  153  Mass.  314,  11 
L.  R.  A.  144;  Kinney  v.  Dodd,  41  111.  App.  49;  Taylor  v.  Travellers' 
Ins.  Co.,  15  Tex.  App.  254,  39  S.  W.  185;  Bogart  v.  Thompson,  24 
Misc.  Rep.  581,  53  N.  Y.  Supp.  622;  Alexander  v.  Parker,  144  111.  355, 
19  L.  R.  A.  187. 

•«  Carpenter  v.  United  States  Life  Ins.  Co.,  161  Pa.  St.  9,  23  L.  R. 
A.  571. 

•"Adamss  Adm'r  v.  Reed  (Ky.),  38  S.  W.  420,  35  L.  R.  A.  692; 
Batdorf  V.  Fehler  (Pa.),  9  All.  468;  Fitzpatrick  v.  Hartford  L.  &  A, 
Ins.  Co.,  56  Conn.  116.  See,  also.  Grand  Lodge,  A.  O.  U.  W.,  v.  Mc- 
Kinstry,  '37  Mo.  App.  82;  Hosmer  v.  Welch,  107  Mich.  470,  65  N.  W. 
280,  67  N.  W.  504. 

»« Scott  V.  Dickson,  108  Pa.  St.  6;  Embry's  Adm'r  v.  Harris  (Ky.), 
52  S.  W.  958. 

KERR,  INS.  — 19 


CHAPTER  X. 

THE  PREMIUM. 

§  128-130.  Definition  and  Necessity. 

131.  Conditions  of  Policy  Regulating  Payment. 

132.  Manner  of  Payment. 

133.  Notice  of  Premium  Falling  Due. 

134.  Tender. 

135.  Waiver  of  Nonpayment 

Definition  and  Necessity. 

§  128.  The  premium  is  the  consideration  for  which  the  in- 
surer assumes  the  risk. 

It  is  one  of  the  essentials  of  a  contract  of  insurance,  and  must 
be  agreed  upon  between  the  insurer  and  the  insured  before 
the  contract  is  complete.    (§  17.) 

§  129.  Prepayment  of  the  premium  is  not  necessary  to  the 
consummation  of  a  contract  of  insurance  unless  made  so  by 
agreement;  but  a  risk  will  not  attach  until  the  premium  has 
been  paid  or  a  liability  to  pay  it  to  the  insurer  has  been  in- 
curred.   (§§  40,  109.) 

§  130.  In  the  absence  of  a  stipulation  to  the  contrary,  the 
presumption  is  that  the  delivery  of  the  policy,  the  attaching 
of  the  risk  and  liability,  and  the  payment  of  the  premium  are 
coincident.    (g§  40,  41.) 

Generally. 

Every  legal  and  enforcible  contract  must  be  based  upon  a 
valuable  consideration.  This  consideration,  in  an  insurance 
contract,  is  called  the  premium.  The  contract  is  not  com- 
plete until  the  amount  of  the  premium  has  been  agreed 
upon — until  the  minds  of  the  parties  have  met  upon  the 
amount  which  the  insurer  is  to  receive  for  undertaking  the 
risk.     The  agreement  is  not  complete  or  enforcible  until  the 


§  130  DEFINITION    AND    NECESSITY.  291 

obligation  of  botii  parties  is  certain  and  definite,  so  that  the 
agreement  as  made  can  be  enforced  by  either  party.  Both 
must  be  bound — the  one  to  insure,  and  the  other  to  pay  the 
premium. 

If  any  essentials  of  the  contract  are  left  open  or  undeter- 
mined, no  contract  has  been  made,  and  the  insurer  is  not  liable 
for  a  loss  occurring,  nor  the  insured  to  pay  the  premium.  If 
the  agreement  and  understanding  concerning  the  essentials 
are  not  mutual,  i.  e.  if  one  party  understands  the  contract  one 
way  and  the  other  party  another,  no  contract  has  been  made 
which  can  be  enforced  either  in  law  or  equity. 

The  contract  of  the  insurer  is  executory.  On  the  part  of 
the  insured,  so  far  as  concerns  the  premium,  the  contract  may 
be  executed,  as  where  the  premium  is  paid,  or  executory, 
as  where  a  promise  has  been  made  to  pay  it.  If  an  insured 
pays  a  premium  in  anticipation  of  a  contract  to  be  made, 
which  the  insurer  subsequently  refuses  to  make,-  the  former  is 
entitled  to  a  return  of  his  premium.  The  insurer  is  not  al- 
lowed to  receive  or  retain  the  premium  where  no  risk  has  at- 
tached, for  in  such  case  it  has  furnished  no  equivalent  for 
the  premium ;  and  it  is  equally  true  that  the  payment  of  the 
premium,  or  a  liability  to  pay  the  same,  must  always  exist 
on  the  part  of  the  insured,  where  the  insurers  are  responsible 
for  the  risk.^ 

^Hartshorn  v.  Shoe  &  Leather  Dealers'  Ins.  Co.,  15  Gray  (Mass.), 
244;  Fish  v.  Cottenet,  44  N.  Y.  538;  Trustees  of  First  Baptist 
Church  V.  Brooklyn  Fire  Ins.  Co.,  19  N.  Y.  305,  28  N.  Y.  153;  Walker 
V.  Metropolitan  Ins.  Co.,  56  Me.  371;  Orient  Mut.  Ins.  Co.  v.  Wright, 
23  How.  (U.  S.)  401.  See  ante,  §  17,  "Essentials  of  Contract;" 
§§  40--46,  "Making  of  Contract."  If  an  insurer  avoids  a  policy  he- 
cause  it  has  been  obtained  through  misrepresentation  or  fraud,  the 
contract  becomes  void  ab  initio,  and  the  insurer  cannot  enforce  the 
obligation  of  the  insured  to  pay  the  premium,  Schreiber  v.  German- 
American  Hail  Ins.   Co.,  43  Minn.  369;    at  least  unless  there  be  a 


292  the  premium.  §  131 

Conditions  of  Policy  Regulating  Payment. 

§131.  Conditions  in  a  policy  regulating  the  time  and  manner 
of  payment  of  the  premium  are  valid  and  of  the  essence  of  the 
contract,  and  must  be  complied  with  unless  waived. 

When  a  policy  of  insurance  has  been  delivered  and  ac- 
cepted, it  becomes,  in  the  absence  of  fraud,  conclusive  evi- 
dence of  the  contract  of  the  parties,  and  its  stipulations 
regulating  the  time  or  manner,  or  place  of  payment  of  the 
premiums  become  binding  on  both  parties.  After  accepting 
a  policy  the  insured  will  not  be  heard  to  deny  knowledge  of 
its  conditions.  And  so,  when  a  policy  contains  a  provision 
that  it  shall  not  be  binding  or  effective  until  the  premium  has 
actually  been  paid,  pre-payment  of  the  premium  becomes  a 
condition  precedent  to  the  attaching  of  any  liability  on  the 
part  of  the  insurer.  This  condition,  being  imposed  for  the 
benefit  of  the  insurer,  may  be  waived  by  any  of  its  authorized 
officers  or  agents.  Whether  an  agent  or  officer  has  power  to 
waive  the  conditions  of  the  policy  in  this  respect  must  be  de- 
termined from  the  circumstances  of  a  given  case.  The  in- 
surer can,  by  its  contract,  limit  the  power  of  waiver  to  cer- 
tain specified  officers.^ 

stipulation  in  the  policy  allowing  the  insurer  to  retain  the  premium 
even  though  it  elects  to  avoid  the  policy,  Id.  The  payment  of  the 
first  premium,  or  the  obligation  to  pay  it,  is  necessary  to  the  incep- 
tion of  the  risk,  but  an  insured  is  not  bound  to  renew  the  policy,  or 
to  pay  future  premiums  to  keep  it  alive,  unless  he  has  obligated 
himself  so  to  do.  Gibson  v.  Megrew,  154  Ind.  273,  56  N.  E.  674,  48 
L.  R.  A.  362.  The  contract  of  a  member  of  a  mutual  benefit  associa- 
tion is  purely  unilateral,  and  he  may  refuse  to  continue  his  pay- 
ments at  any  time,  in  which  event  the  association  can  only  declare- 
his  interest  forfeited,  and  cannot  sue  for  unpaid  assessments. 
Rockhold  V.  Canton  M.  Mut.  Benev.  Soc,  129  111.  440;  Lehman  v. 
Clark,  174  111.  279. 

="  Wilkins  v.  State  Ins.  Co.,  43  Minn.  177.  Where  a  policy  expressly 
provides  that  a  premium  shall  be  paid  on  or  before  a  certain  day, 
and  in  default  thereof  the  policy  shall  be  void,  nonpayment  of  the- 


§  131  CONDITIOX    OF    POLICY    REGULATING    PAYMENT.  293 

The  parties  to  an  iusurance  contract  liave  the  right  to  in- 
sert such  lawful  conditions  as  they  may  agree  upon  concern- 
ing the  obligations  of  each,  and  a  contract  when  made  must  he 
■construed  and  enforced  according  to  the  expressed  intention  of 
the  parties.  It  is  not  unlawful  to  provide  in  the  contract 
that  upon  certain  conditions  or  contingencies  it  shall  become 
void.^ 

An  express  pro^'ision  in  a  policy  that  the  company  shall 
not  be  liable  until  the  premium  be  actually  paid,  is  waived  by 
an  unconditional  delivery  of  the  policy  to  the  insured  as  a 
completed  and  executed  contract,  under  an  express  or  implied 
agreement  that  credit  be  given  for  the  premium,^  provided 
the  delivery  and  Avaiver  be  acts  of  one  authorized  to  bind 
the  insurer  in  those  particulars.  Provisions  of  the  policy 
for  the  release  of  the  insurer  from  liability  on  a  failure  of  the 
insured  to  pay  the  premiums  when  due,  are  of  the  very  es- 
sence and  substance  of  the  contract.  To  hold  the  company 
to  its  promise  to  pay  the  insurance,  notwithstanding  the  de- 
fault of  the  insured  in  making  payment  of  the  premiums  as 

premium    upon    the    day  named    works    a    forfeiture.     Fowler    v. 
Metropolitan  Life  Ins.  Co.,  116  N.  Y.  389. 

^Holman  v.  Continental  Life  Ins,  Co.,  54  Conn.  195;  Northwestern 
Mut.  Life  Ins.  Co.  v.  Hazelett,  105  Ind.  212;  Dwight  v.  Germania 
Life  Ins.  Co.,  103  N.  Y.  341;  Bosworth  v.  Western  Mut.  Aid  Soc,  75 
Iowa,  582;  ante,  c.  8. 

*Farnum  v.  Phoenix  Ins.  Co.,  83  Cal.  246;  Brownfield  v.  Phoenix 
Ins.  Co.,  35  Mo.  App.  54.  But  this  waiver  must  be  by  some  one 
authorized  to  bind  the  insurer  in  the  premises.  Wilkins  v.  State 
Ins.  Co.,  43  Minn.  177;  Miller  v.  Union  Cent.  Life  Ins.  Co.,  110  111. 
102;  Condon  v.  Mutual  Reserve  Life  Fund  Ass'n,  89  Md.  99,  42  Atl. 
944,  44  L.  R.  A".  149;  Trustees  of  First  Baptist  Church  v.  Brooklyn' 
Fire  Ins.  Co.,  19  N.  Y.  305;  Bodine  v.  Exchange  Fire  Ins.  Co.,  51 
N.  Y.  117;  Howell  v.  Knickerbocker  Life  Ins.  Co.,  44  N.  Y.  279; 
Babcock  v.  Baker,  37  App.  Div.  (N.  Y.)  558.  The  waiver  may  take 
place  after  a  loss  has  occurred.  Schoneman  v.  Western  Horse  & 
Cattle  Ins.  Co.,  16  Neb.  404;  ante,  c.  8. 


294  THE    PKEMIUM.  §  132 

stipulated,  is  to  destroy  tlie  very  essence  of  tlie  contract,  and 
this  a  court  cannot  do.^ 

Manner  of  Payment. 

§  132.  A  premium  is  ordinarily  payable  in  cash  only.  Credit 
can  usually  be  given  by  an  agent  for  premiums  on  fire  insur- 
ance policies. 

The  premium  is  ordinarily  payable  in  cash,  and  a  local 
agent  has  no  implied  authority  to  accept  or  to  agree  to  take 
anything  less  in  payment  for  the  premium  due  upon  the 
policy.® 

It  is  an  elementary  principle  of  agency  that  whatever  an 
agent  does  can  be  done  only  in  the  way  usual  in  the  line  of 
business  in  which  he  is  acting.  The  taking  of  a  horse  by  an 
agent,  as  payment  of  a  premium  due  the  company,  is  beyond 
his  powers,  and  a  fraud  as  respects  the  company,  and  does 
not  constitute  a  consideration  necessary  to  create  a  valid  con- 
tract,'^ but  it  may  be  otherwise  where  the  agent  is  a  general 
state  agent,  and  the  transaction  takes  place  within  his  terri- 
tory and  he  has  an  interest  in  the  premiums.^  So  an  agent 
may  sometimes  give  the  insured  credit  for  the  premiums,  and 
substitute  himself  as  debtor  to  the  company.®     The  agree- 

'  Klein  v.  New  York  Life  Ins.  Co.,  104  U.  S.  88. 

°  Lycoming  Fire  Ins.  Co.  v.  Ward,  90  111.  545;  Raub  v.  New  York 
Life  Ins.  Co.,  14  N.  Y.  St.  Rep.  573.  But  payment  may  be  made  by 
check,  Kenyon  v.  Knights  Templar  &  M.  Mut.  Aid  Ass'n,  122  N.  Y. 
247,  25  N.  E.  302;  Maher  v.  Hibernia  Ins.  Co.,  67  N.  Y.  283;  or  by 
draft,  Piedmont  &  A.  liife  Ins.  Co.  v.  Ray,  50  Tex.  511;  ante,  c.  8. 

'  Hoffman  v.  John  Hancock  Mut.  Life  Ins.  Co.,  92  U.  S.  161. 

«  Van  Warden  v.  Equitable  Life  Assur.  Soc,  99  Iowa,  621,  68  N.  W. 
892. 

"Sheldon  v.  Connecticut  Mut.  Life  Ins.  Co.,  25  Conn.  207;  Chick- 
ering  v.  Globe  Mut.  Life  Ins.  Co.,  116  Mass.  321;  Slobodisky  v. 
Phenix  Ins.  Co.,  53  Neb.  816,  74  N.  W.  271.  See,  also,  Buffum  v. 
Fayette  Mut.  Fire  Ins.  Co.,  3  Allen  (Mass.),  360;  Kentucky  Mut. 
Ins.  Co.  V.  Jenks,  5  Ind.  96;  Schwartz  v.  Germania  Life  Ins,  Co.,  18 


§  132  MANNER  OF  paymp:nt.  295 

ment  of  an  agent  to  accept  payment  of  tlie  premium  in  pro- 
fessional services  rendered  by  the  insured,  is  void.-^^  So 
an  agi'eement  of  the  agent  to  set  off  debts  due  between  him- 
self and  the  policy  holder,  and  the  issuance  of  a  receipt  in 
evidence  of  such  an  agreement,  does  not  bind  the  company.  ^^ 
Payment  cannot  be  made  by  the  delivery  of  commodities  to 
the  agent  where  the  policy  provides  for  a  cash  premium.  ^^ 

An  insurer  has  been  held  estopped  to  claim  non-payment  of 
a  premium,  when  its  agent  has  charged  the  broker  who  pro- 
cured the  policy  with  the  amount  of  the  premium.  ^^  Where 
a  policy  provides  that  it  shall  not  be  valid  until  the  first  pre- 
mium be  paid,  but  specifies  no  special  mode  of  payment,  a  de- 
livery of  the  policy  with  a  receipt  for  the  first  year's  pre- 
mium attached,  in  exchange  for  defendant's  notes  for  the 
amount  of  the  premium,  will  be  deemed  in  law  an  agreement 
to  accept,  and  an  acceptance  of  the  notes  in  payment  of  the 
premium.^*  The  agent  may  advance  the  premium  to  the 
company,  and  take  the  note  of  the  assured  for  the  amount  to 
himself,  and  this  will  be  a  sufficient  compliance  with  the  con- 
dition requiring  the  premium  to  be  paid  before  the  company 
shall  be  liable.  ^^     Where  an  insurer  receives  an  order  of  an 

Minn.  448;  Pendleton  v.  Knickerbocker  Life  Ins.  Co.,  5  Fed.  238; 
Pierce  v.  Charter  Oak  Life  Ins.  Co.,  138  Mass.  151;  Clark  v.  Metro- 
politan Life  Ins.  Co.,  107  Mich.  160,  65  N.  W.  1. 

"Anchor  Life  Ins.  Co.  v.  Pease,  44  How.  Pr.  (N.  Y.)  385;  Texas 
Mut.  Life  Ins.  Co.  v.  Davidge,  51  Tox.  244. 

"  Barnes  v.  Piedmont  &  A.  Life  Ins.  Co.,  74  N.  C.  22. 

"Cyrenius  v.  Mutual  Life  Ins.  Co.,  18  App,  Div.  599,  46  N.  Y. 
Supp.  549.  See,  also,  §§  109,  110,  on  power  of  agents  to  receive  pre- 
mium. 

"Elkins  V.  Susquehanna  Mut.  Fire  Ins.  Co.,  113  Pa.  St.  386;  Le- 
banon Mut.  Ins.  Co.  V.  Hoover,  113  Pa.  St.  591. 

"Tayloe  v.  Merchants'  Fire  Ins.  Co.,  9  How.  (U.  S.)  390;  Union 
Cent.  Life  Ins.  Co.  v.  Taggart,  55  Minn.  95. 

^'Home  Ins.  Co.  v.  Curtis,  32  Mich.  402;  Krause  v.  Equitable  Life 
Assur.  Sec,  99  Mich.  461,  58  N.  W.  496;  Shields  v.  Equitable  Life 
Assur.  Soc.  (Mich.),  80  N.  W.  793. 


296  THE   PREMIUM.  §  132 

employe  upon  liis  employer  as  payment  for  tlie  premium, 
advantage  cannot  be  taken  of  a  condition  forfeiting  the  policy 
for  non-payment  unless  notice  be  given  tlie  insured  of  the 
failure  of  the  drawee  to  make  the  payments  mentioned  in  the 
order.  ^®  But  an  order  is  not)  ordinarily,  a  payment  until 
cashed. ^'^  When  an  order  is  accepted  by  an  insurer,  it  must 
be  presented  within  a  reasonable  time.^^ 

A  check  may  be  received  as  payment,  but  in  the  absence  of 
previous  dealings  the  presumption  will  be  that  its  acceptance 
was  conditioned  upon  its  being  paid  when  presented.  ^^  Pay- 
ment must  be  made  to  some  party  authorized  to  receive  the 
premium,  and  if  payment  be,  by  the  policy,  required  to  be 
made  at  a  particular  place,  the  payment  must  be  made  at  the 
place  designated.  Where  a  policy  fixes  no  place  of  payment 
of  premium,  and  names  no  person  to  whom  it  must  be  paid,  pa- 
rol evidence  is  admissible  to  show  the  agreement  between  the 
insured  and  the  agent  effecting  the  insurance,  as  to  the  place  of 
payment.  ^^  The  agent  who  delivers  the  policy  is  presumptively 
entitled  to  receive  payment  of  the  initial  premium.^^  The 
failure  of  a  broker  who  delivers  the  policy  and  receives  the 
premium,  to  pay  it  over  to  the  insurer,  does  not  affect  the 
validity  of  the  policy.^^ 

"Lyon  V.  Travelers'  Ins.  Co.,  55  Mich.  141;  National  Ben.  Ass'n 
V.  Jackson,  114  111.  533. 

"McMahon  v.  Travelers'  Ins.  Co.,  77  Iowa,  229. 

"  Gotten  V.  Fidelity  &  Casualty  Co.,  41  Fed.  506.  See,  also,  effect 
of  orders  of  payment,  Bane  v.  Travelers'  Ins.  Co.,  85  Ky,  677;  Forest 
City  Ins.  Co.  v.  School  Directors  of  Dist.  No.  1,  4  111,  App.  145. 

"Greenwich  Ins.  Co.  v.  Oregon  Imp.  Co.,  76  Hun,  194,  58  N.  Y. 
St.  Rep.  474. 

''"Blackerby  v.  Continental  Ins.  Co.,  83  Ky.  574. 

*^  Scott  v.  Home  Ins.  Co.,  53  Wis.  238;  Lycoming  Fire  Ins.  Co.  v. 
Ward,  90  111.  545;  Whitley  v.  Piedmont  &  A.  Life  Ins.  Co.,  71  N.  C. 
480.    See  ante,  c.  8,  "Agents." 

"  Gaysville  Mfg.  Co.  v.  Phoenix  Mut.  Fire  Ins,  Co.,  67  N.  H.  457,  36 
Atl.  367. 


§  182  MANNER    OF    PAYMENT,  297 

There  is  no  presumption  that  an  agent  who  accepts  a  note 
for  an  insurer  has  power  to  receive  payment  of  the  note  at  its 
maturity,  unless  the  note  be  in  his  possession  at  the  time  of 
pavment.^^  Where  no  place  of  payment  is  specified  in  the 
policy,  pajTinent  made  to  any  authorized  agent  is  sufficient. 
But  if  payment  be,  by  the  policy,  required  at  a  specified  place, 
as,  for  instance,  the  home  office,  the  condition  must  be  com- 
plied with  unless  waived  by  the  insurer.  ^^ 

The  premium  must  be  paid  by  the  insured  or  by  some  one 
authorized  to  act  for  him,  or  on  his  behalf,  except  in  cases 
where  the  contract  recognizes  such  rights  in  third  parties  as 
gives  them  an  interest  in  the  continuance  of  the  policy,  and 
justifies  their  paying  the  premiums  to  keep  it  alive.  Where 
a  policy  of  life  insurance  provided  that  it  should  not  take 
effect  unless  the  premium  were  paid  during  the  lifetime  of 
the  insured,  a  payment  of  the  premium  by  a  third  person 
after  death  of  the  insured,  as  by  his  administrator  or  bene- 
ficiary, does  not  give  life  to  the  contract.  As  the  contract 
cannot  be  created  without  the  consent  of  the  contracting  par- 
ties, so  it  cannot  be  given  effect  or  continued  in  existence  by 
the  act  of  an  intermeddler.^^ 

The  beneficiary  of  a  certificate  of  insurance  on  the  life  of 
her  father  who  is  insane  or  incapable  of  attending  to  business, 
is  entitled  to  notice  of  his  default  in  paying  assessments  be- 
fore a  forfeiture  can  be  declared  therefor,  after  she  has  given 
notice  to  the  company  of  his  condition,  and  requested  a  notice 
of  default,  so  that  she  might  pay  the  assessments  if  he  did 

"Long  Creek  Bldg.  Ass'n  v.  State  Ins.  Co.,  29  Or.  569,  46  Pac. 
366. 

^*Thwing  V.  Great  Western  Ins.  Co.,  Ill  Mass.  93;  Williams  v. 
Washington  Life  Ins.  Co.,  31  Iowa,  541;  O'Reilly  v.  Guardian  Mut. 
Life  Ins.  Co.,  60  N.  Y.  169;  Bulger  v.  Washington  Life  Ins.  Co.,  63 
Ga.  328. 

"^  Whiting  V.  Massachusetts  Mut,  Life  Ins.  Co.,  129  Mass.  240. 


298  THE   PREMIUM.  §  132 

not.^^  The  beneficiary  in  a  policy  lias  sucli  relation  to  the 
contracting  parties,  and  such  an  interest  in  the  maintenance 
of  the  policy,  as  entitles  him  to  pay  the  premium,^^  The 
widow  and  children  of  an  insured  are  entitled  to  make  pay- 
ment of  a  note  given  by  the  deceased  husband  and  father,  to- 
keep  alive  insurance  on  the  homestead.  ^^ 

Giving  Credit  for  Premium. 

Except  when  prohibited  by  the  terms  of  the  contract  an 
insurance  agent  who  has  power  to  receive  applications,  make 
contracts,  and  deliver  the  policies,  is  presumed  to  have  au- 
thority to  waive  pre-payment  of  the  premium,  and  to  give 
credit  therefor.  And  even  when  the  policy  contains  a  pro- 
vision that  it  shall  not  go  into  effect  until  the  initial  premium 
is  paid,  but  contains  no  special  limitation  upon  the  power  of 
the  agent  to  waive  pre-payment,  it  is  held  that  the  delivery 
of  the  policy  without  pre-payment  of  the  premium,  will  give 
rise  to  a  presumption  of  an  intention  to  have  the  policy  take- 
effect  at  once.      The  recital  of  the  payment  of  the  premium 

=•=  Buchannan  v.  Supreme  Conclave,  I.  0.  H.,  178  Pa.  St.  465,  34 
L.  R.  A.  436. 

=■  Hamill  v.  Supreme  Council  of  R.  A.,  152  Pa.  St.  537.  In  Mat- 
thews V.  American  Cent.  Ins.  Co.,  154  N.  Y.  449,  it  was  held  that  in 
a  case  of  loss  by  fire  after  the  death  of  the  original  insured,  and 
before  the  appointment  of  a  legal  representative,  those  interested 
in  the  policy  must  make  reasonable  efforts,  and  see  that  the  cove- 
nants as  to  notice  and  proofs  of  loss  are  kept,  and  use  such  agencies 
as  the  law  provides  to  secure  that  result. 

^^  Continental  Ins.  Co.  v.  Daly,  33  Kan.  601.  See,  also,  as  to  pay- 
ments made  by  third  parties.  Miller  v.  Union  Cent.  Life  Ins.  Co.,  11(? 
111.  102;  Union  Mut.  Life  Ins.  Co.  v.  McMillen,  24  Ohio  St.  67;  Gar- 
ner v.  Germania  Life  Ins.  Co.,  110  N.  Y.  266;  Swift  v.  Railway  Pas- 
senger &  F.  C.  Mut.  Aid  &  Ben.  Ass'n,  96  111.  309;  Hodge  v.  Ellis, 
76  Ga.  272;  Gould  v.  Emerson,  99  Mass.  154;  National  Mut.  Aid  Soc. 
V.  Lupoid,  101  Pa.  St.  111.  A  mortgagee,  for  whose  benefit  a  mort- 
gagor has  contracted  to  carry  insurance  on  the  mortgaged  prop- 
erty, is  entitled  to  pay  the  premiums  necessary  to  keep  the  policy  in 


§  132  MANNER    OF    PAYMENT.  29D 

in  a  policy  is  prima  facie  evidence  that  it  has  been  paid.  If 
the  premiums  have  not  been  in  fact  paid,  yet  the  policy  has 
been  delivered  to  the  insured  without  pre-payment,  and  credit 
given,  it  will  be  held  to  be  in  force,  subject  to  the  right  of  the 
insurer  to  cancel  after  giving  the  necessary  notice.  ^^  But 
a  j)ro vision  in  a  policy  that  "no  insurance  shall  be  considered 
as  binding  until  actual  payment  of  the  premium,  and  no  part 
of  this  contract  can  be  waived  except  in  writing,  signed  by  the 
secretary  of  the  company,"  is  notice  to  the  insured  that  an 
agent  has  no  authority  to  waive  pre-payment  of  the  premium. 
And  a  delivery  of  a  policy  containing  such  a  condition  will 
not  bind  the  insurer  unless  the  premium  be  actually  paid,  or 
the  condition  be  waived  by  the  secretary  or  some  superior 
power.^*^  And  w^here  a  policy  is  delivered  with  the  under- 
standing that  the  premium  is  to  be  paid  in  cash  and  at  once, 
the  mere  receipt  of  the  policy,  even  though  it  contain  acknowl- 
edgment of  payment  of  the  premium,  does  not  estop  the  in- 
surer from  asserting  and  proving  non-pajanent,  as  against  a 
mortgagee  to  whom  loss  if  any  is  payable,  although  he  received 
the  policy  which  acknowledged  receipt  of  the  premium  from 
the  assured,  without  notice  that  the  premium  w^as  unpaid.^  ^ 
Whether  or  not  it  was  intended  thai  the  policy  should  go  into 

force,  and  can  charge  amounts  paid  therefor  as  a  part  of  the  mort- 
gage debt.  St.  Paul  F.  &  M.  Ins.  Co.  v.  Upton,  2  N.  D.  229,  50  N.  W. 
702;  Overby  v.  Fayetteville  B.  &  L.  Ass'n,  81  N.  C.  56.  And  in  such 
case  the  mortgagee  must  account  to  the  mortgagor  for  the  benefit 
of  any  insurance  collected.  Pendleton  v.  Elliott,  67  Mich.  496; 
Johnson  v.  Horsford,  110  Ind.  572;  Nordyke  &  M.  Co.  v.  Gery,  112 
Ind.  535,  13  N.  E.  683. 

-"  John  R.  Davis  Lumber  Co.  v.  Home  Ins.  Co.,  95  Wis.  542,  70 
N.  W.  59;  Mallory  v.  Ohio  Farmers'  Ins.  Co.,  90  Mich.  112,  51  N.  W. 
188;  Stewart  v.  Union  Mut.  Life  Ins.  Co.,  155  N.  Y.  257,  42  L.  R.  A. 
148. 

'"  Wilkins  v.  State  Ins.  Co.,  43  Minn.  178. 

"  Union  Bldg.  Ass'n  v.  Rockford  Ins.  Co.,  83  Iowa,  647. 


300  THE   PREMIUM.  §  132 

•effect  witliout  j)re-payment  of  the  premium,  and  that  credit 
should  he  given  therefor,  is  often  a  question  of  fact  to  be  de- 
termined by  a  jurj.^^ 

The  Effect  of  Taking  a  Note  for  Premium. 

While  it  is  true,  as  a  general  rule,  that  a  promissory  note 
is  not  payment  of  a  debt  which  it  represents,  until  the  note 
is  itself  paid,  yet  it  becomes  a  payment  of  the  debt  when 
the  parties  by  express  stipulation  so  agree.  The  acknowledg- 
ment of  payment  in  the  policy  is  always  open  to  explanation 
by  proof  of  the  actual  facts.  Though  such  acknowledgment 
in  the  policy  would  tend  to  show  that  it  was  the  intention  of 
the  parties  that  a  promissory  note,  given  for  the  premium, 
was  intended  to  be  taken  as  payment,  it  can  always  be  shown, 
to  defeat  the  inference,  that  such  was  not  the  intention  of  the 
parties.  It  only,  in  effect,  changes  the  burden  of  proof  in 
such  cases.^^ 

The  application  and  the  note  given  for  the  policy,  if 
executed  as  part  of  the  same  contract,  are  to  be  considered 
together  in  order  to  determine  what  the  contract  was.^^  When 
a  note  is  accepted  as  payment  of  the  premium,  the  non-pay- 
ment of  the  note  at  maturity  does  not  affect  the  policy,  or 
release  the  insurer,  unless  that  effect  be  expressly  stipulated 
^Qj.  35     Where  a  policy  is  conditioned  to  be  void  on  failure 

==  Church  V.  La  Fayette  Fire  Ins.  Co.,  66  N.  Y.  222.  Where  a  policy 
is  prepared  and  forwarded  to  a  general  agent  to  be  delivered  by 
him,  and  he  to  receive  payment  of  fees  and  premium,  of  which  no 
part  went  to  the  insurer,  the  latter  cannot  complain  of  the  giving 
of  credit.    Pythian  Life  Ass'n  v.  Preston,  47  Neb.  374,  66  N.  W.  445. 

^Pitt  V.  Berkshire  Life  Ins.  Co.,  100  Mass.  502;  Massachusetts 
Ben.  Life  Ass'n  v.  Robinson,  104  Ga.  256. 

=*  McAllister  v.  New  FJngland  Mut.  Life  Ins.  Co.,  101  Mass.  561; 
Beezley  v.  Des  Moines  Life  Ass'n,  100  Iowa,  436,  69  N.  W.  549. 

^^  Union  Cent.  Life  Ins.  Co.  v.  Taggart,  55  Minn.  95;  Trade  Ins. 
€o.  V.  Barracliff,  45  N.  J.  Law,  543. 


§  132  PREMIUM    NOTES.  301 

to  pav  "any  notes  or  otlier  obligations  given  for  premium," 
and  recites  a  consideration  of  a  certain  snm  in  hand  paid,  and 
annual  premiums  for  a  like  amount,  and  part  of  the  payment 
was  in  cash,  and  a  note  had  been  given  for  the  balance,  the 
note  providing  that  if  not  paid  when  due  the  policy  should 
be  void  in  accordance  with  the  conditions  of  the  policy,  it 
is  held  that  the  policy  is  forfeited  by  failure  to  pay  the  note 
at  maturity.^^  A  provision  in  the  note  that  upon  its  non- 
payment at  maturity  the  insurer  shall  have  the  right  to 
cancel  the  policy,  does  not  release  the  insurer  per  sc,  but 
merely  gives  the  insurer  a  right  which  it  can  exercise  or  not 
at  its  option.^''^  But  a  provision  in  a  premium  note  that  if 
it  is  not  paid  at  maturity  the  entire  premium  shall  be  con- 
sidered earned,  and  the  policy  shall  be  null  and  void  so  long 
as  the  note  remains  overdue  and  unpaid,  is  valid  and  bind- 
ing, and  the  policy  is  unenforcible  if  the  note  is  not  paid  at 
maturity  or  prior  to  the  loss.^^ 

The  taking  of  notes,  at  the  time  of  the  issue  of  the  policy, 
in  lieu  of  quarterly  instalments  of  annual  premium,  does  not 
waive  a  provision  of  the  policy  rendering  it  void  for  failure 
to  pay  the  subsequent  instalments  as  they  become  due.^'' 

'"Pitt  V.  Berkshire  Life  Ins.  Co.,  100  Mass.  500;  How  v.  Union 
Mut.  Life  Ins.  Co.,  80  N.  Y.  32, 

"  Western  Horse  &  Cattle  Ins.  Co.  v.  Scheidle,  18  Neb.  495. 

''New  Zealand  Ins.  Co.  v.  Maaz,  13  Colo.  App.  493,  59  Pac.  213; 
Garlick  v.  Mississippi  Valley  Ins.  Co.,  44  Iowa,  553;  American  Ins. 
Co.  V.  Stoy,  41  Mich.  385;  Knickerbocker  Life  Ins.  Co.  v.  Pendleton, 
112  U.  S.  696. 

'"Beezley  v.  Des  Moines  Life  Ass'n,  100  Iowa,  436,  69  N.  W.  549. 
A  forfeiture  of  a  policy,  assented  to  by  the  insured,  for  nonpayment 
of  a  note  for  advance  premiums,  prevents  the  recovery  of  any  part 
of  the  note,  although  the  company  might  otherwise  have  enforced 
the  note,  and  the  insured  might  have  paid  the  premium,  and  con- 
tinued the  policy  in  force.  Skillern  v.  Continental  Ins.  Co.  (Tenn.^, 
42  S.  W.  180. 


302  THE    PREMIUM,  §  lo2 

Where  an  Insurer  avoids  a  policy  for  fraud  or  misrepre- 
sentation, the  consideration  for  the  premium  note  fails.  A 
stipulation  that  in  case  the  policy  shall  become  void  from 
the  happening  of  a  particular  event,  the  whole  premium, 
paid  or  unpaid,  for  the  entire  tenn  shall  be  deemed  earned, 
gives  the  insurer  the  right  to  retain  the  paid-up  premium, 
and  to  collect  the  unpaid  premium,  for  the  benefit  of  the  in- 
surance which  the  insured  has  had  up  to  the  time  of  the  speci- 
fied event,  is  a  sufficient  equivalent  for  the  premium,  paid  and 
impaid.^"  An  agreement  that  the  premium  note  of  the  in- 
sured shall  remain  binding  upon  him  although  the  insurer 
is  relieved  from  liability,  is  not  illegal  or  contrary  to  public 
policy.'^^ 

That  a  premium  note  has  not  been  paid  at  the  time  a  loss 
occurred,  does  not  defeat  a  recovery,  %Yhere  a  note  has  not 
matured  at  the  time  of  the  loss,  and  the  policy  merely  provides 
that  it  shall  be  suspended,  and  of  no  force  and  effect  during 
the  time  the  premium  note,  or  any  pr.rt  thereof,  remains 
overdue   and  unpaid. ^^ 

Forfeitures  of  a  policy  which  has  once  gone  into  effect  are 
not  favored,  and  will  not  be  allowed  to  release  the  insurer 

*•  Schreiber  v.  German-American  Hail  Ins.  Co.,  43  Minn.  368. 

*^  St.  Paul  F.  &  M.  Ins.  Co.  v.  Coleman,  6  Dak.  458,  6  L.  R.  A.  87: 
CauflReld  v.  Continental  Ins.  Co.,  47  Mich.  447;  Minnesota  Farmers' 
Mut.  Fire  Ass'n  v.  Olson,  43  Minn.  21.  Negotiable  promissory  notes, 
which  purport  on  their  face  to  be  premiums,  and  stipulate  that  the 
policy  becomes  void  if  they  are  not  paid  at  maturity,  are  not 
per  se  a  payment  of  the  premium,  so  as  to  avoid  the  policy,  render- 
ing it  void  if  premium  notes  are  not  paid  when  due.  Forbes  v. 
Union  Cent.  Life  Ins.  Co.,  151  Ind.  89,  51  N.  E.  84;  German  Ameri 
can  Ins.  Co.  v.  Divilbiss,  67  Mo.  App.  500.  Stipulations  that  the 
company  shall  not  be  liable  while  the  premium  note  remains  un 
paid  will  be  recognized.  Robinson  v.  Continental  Ins.  Co.,  76  Mich 
641,  6  L.  R.  A.  05;  Fowler  v.  Metropolitan  Life  Ins.  Co.,  116  N.  ^ 
389. 

■^Farmers'  &  Merchants'  Ins.  Co.  v.  Wiard  (Neb.),  81  N.  W.  31" 


§  132  PREMIUM    NOTES.  303 

from  liability,  unless  such  a  result  be  clearly  stipulated  for."*' 
But  a  provision  avoiding  tbe  policy  for  non-payment  of  pre- 
mium or  assessments  within  a  certain  time,  is  certain  and 
unambiguous,  and  cannot  be  construed  to  merely  give  the 
insurer  the  right  to  avoid  the  policy,"*^  and  are  binding  upon 
the  beneficiary.'*^  A  policy  which  provides  for  one  month 
■of  grace  after  the  premium  becomes  due,  cannot  be  forfeited 
for  non-paj-Tuent  of  premium,  unless  the  insured  s\irvives  the 
month.  ^^  It  has  sometimes  been  held  that  the  stipulation 
for  forfeiture  in  the  note  is  nugatory,  and  that  a  forfeiture 
oai)  only  be  based  upon  an  express  provision  of  the  policy 
itself.^^ 

Defenses  to  Premium  Notes. 

It  is  no  defense  to  an  action  on  a  premium  note  that  during 
the  continuance  of  a  default  of  the  insured  the  policy  was 
temporarily  suspended,  and  the  insurer  would  not  be  liable 
for  a  loss  happening  during  such  default  ;^^  nor  that  the  in- 
surer, if  a  foreign  corporation,  has  not  strictly  complied  with 
the  law  authorizing  it  to  do  business  within  the  state,  if  there 
has  been  a  substantial  compliance  with  the  law;"*^  nor  that  the 
insured,  who  was  able  to  read,  did  not  read  the  note  before 
signing  it.^° 

"  Massachusetts  Ben.  Life  Ass'n  v.  Robinson,  104  Ga.  256,  30  S.  E. 
918;  McMaster  v.  New  York  Life  Ins.  Co.,  90  Fed.  40;  Ohio  Farm- 
ers' Ins.  Co.  V.  Stowman,  16  Ind.  App.  205,  44  N.  E.  558,  940;  Han- 
over Fire  Ins.  Co.  v.  Dole,  20  Ind.  App.  333,  50  N.  E.  772;  Grand 
Lodge,  A.  O.  U.'W.,  v.  Bagley,  164  III.  340. 

"Bo^worth  V.  Western  Mut.  Aid  Soc,  75  Iowa,  582. 

*=  Forbes  v.  Union  Cent.  Life  Ins.  Co.,  151  Ind.  89,  51  N.  E.  84. 

*'  McMaster  v.  New  York  Life  Ins.  Co.,  90  Fed.  40. 

"  Dwelling  House  Ins.  Co.  v.  Hardie,  37  Kan.  674. 

"American  Ins.  Co.  v.  Henley,  60  Ind.  515;  American  Ins.  Co.  v. 
Charles,  62  Ind.  210. 

*»  American  Ins.  Co.  v.  Butler,  70  Ind.  1;  American  Ins.  Co.  v. 
Pressell,  78  Ind.  442. 

''°  American  Ins.  Co.  v.  McWhorter,  78  Ind.  136. 


3Ui  THE    PKEMIUM.  §  132 

It  is  no  defense  to  a  premium  note,  in  the  tand  of  an  inno- 
cent purchaser  for  value,  before  maturity,  that  the  company 
which  issued  the  policy  for  which  the  note  was  given,  has 
failed  ;^^  nor  that  the  insurer  had  failed  to  comply  with  a 
contemporaneous  parol  agreement  ;^^  nor  that  by  the  terms  of 
the  policy  it  was  provided  that  the  insurer  might  cancel  the 
policy  and  return  the  premium  for  the  unexpired  tenn  p?*o 
rata,  and  Ijiat  on  failure  to  pay  the  note  at  maturity  the  policy 
should  be  void  until  revived  by  payment,  but  that  the  whole 
amount  due  should  be  considered  earned  ;^^  nor  that  the  in- 
surer failed  to  show  that  it  was  empowered  to  do  business  in 
the  state  where  the  contract  was  made  f^  nor  that  the  act  which 
gave  the  company  power  to  insure  was  unconstitutional,  nor 
that  the  contract  was  ultra  vires,  by  reason  of  want  of  power 
to  insure.^^ 

Payment  of  Premium  after  Loss. 

If  the  contract  has  been  completed  before  a  loss  occurs, 
and  credit  has  been  expressly  or  impliedly  given  for  the  pre- 
mium, payment  made  after  loss  is  sufficient.  If  the  loss  has 
occurred  before  the  contract  is  made  the  insurer  is  not  bound, 
for  insurance  is  against  anticipated  perils  and  events,  and  not 
against  those  which  have  already  happened.^ "^ 

If  the  loss  occurs  during  a  temporary  suspension  of  the 
policy  for  non-payment  of  the  premium,  or  before  the  policy 
by  its  terms  has  become  effective  because  the  initial  premium 

"Union  Ins.  Co.  v.  Greenleaf,  64  Me.  123. 

"  Life  Ass'n  of  America  v.  Cravens,  60  Mo.  388. 

•"Cauffield  v.  Continental  Ins.  Co.,  47  Mich.  447;  American  Ins. 
Co.  V.  Klink,  65  Mo.  78. 

"American  lus.  Co.  v.'  Smith,  73  Mo.  368;  Cassaday  v.  American 
Ins.  Co.,  72  Ind.  95;  Union  Ins.  Co.  v.  Smart,  60  N.  H.  458;  Fidelity 
&  Casualty  Co.  v.  Eickhoff,  63  Minn.  170. 

"  Freeland  v.  Pennsylvania  Cent.  Ins.  Co.,  94  Pa.  St.  504. 

"Wales  V.  New  York  Bowery  Fire  Ins.  Co.,  37  Minn.  106. 


§  133  NOTICE    OF   PKEiriUM   FALLING    DUE.  305 

is  not  paid,  the  insurer  will  not  be  liable.^'^  If  a  policy  pro- 
vides that  it  shall  not  be  efFective  imtil  the  advance  premium 
is  paid  during  the  lifetime  of  the  person  insured,  a  payment 
of  such  premium  by  a  third  person,  without  the  knowledge  of 
the  insured,  is  of  no  effect,  although  paid  with  his  money, 
and  his  administrator  cannot  ratify  the  act.^^  The  payment 
of  a  premium  after  a  loss  has  occurred,  without  disclosing 
the  loss,  is  not  a  fraud,  as  the  insured  owes  the  company  no 
duty  to  disclose  the  loss  before  paying,  provided  the  contract 
was  in  force  at  the  time  the  loss  occurred.^^ 

Notice  of  Premium  Falling  Due. 

§  133.  Notice  need  not  be  given  of  the  falling  due  of  premi- 
ums unless  required  by  the  contract  or  by  statute. 

An  insurer  is  not  bound  to  notify  an  insured  of  the  time 

when  the  premiums  or  premium  notes  will  become  due,  unless 

either  by  contract  or  by-law  such  notice  is  required  to  be 

given,  or  unless  the  insurer  has  specially  agreed  to  give  such 

notice  before  it  mil  claim  a  forfeiture.     InstiTictions  by  an 

insurer  that  premiums  must  be  paid  at  its  home  office,  and 

that  due  notice  will  be  aiven  of  the  date  when  payment  must 

be  made,  will  prevent  a  forfeiture  for  non-payment  of  the 

premium,   until   such   notice  has   been  given.     An   insurer 

will  not  be  allowed  to  take  advantage  of  any  non-payment 

caused  by  its  own  misrepresentations  or  conduct,  which  have 

induced  the  insured  to  delay  payment.®^     Where  the  insurer 

"Cases  supra;  Wall  v.  Home  Ins.  Co.,  36  N.  Y.  157;  Matthews  v. 
American  Ins.  Co..  40  Ohio  St.  135. 

''Whiting  V.  Massachusetts  Mut.  Life  Ins.  Co.,  129  Mass.  240. 

'"Firemen's  Ins.  Co.  v.  Kuessner,  164  111.  275.  See,  also.  Burner's 
Adm'r  v.  German-American  Ins.  Co.  (Ky.),  27  Ins.  Law  J.  732,  45 
S.  W.  109;  Milkman  v.  United  Mut.  Ins.  Co.,  20  R,  I.  10,  36  Atl.  1121. 

'•'  Heinlein  v.  Imperial  Life  Ins.  Co.,  101  Mich.  250,  25  L.  R.  A. 
G27;  Colby  v.  Life  Ind.  &  Inv.  Co.,  57  Minn.  510. 

KERR,  INS.— 20 


306  THE    PREMIUM.  §  133 

has  undertaken,  or  is  obligated  to  give  notice,  it  cannot 
claim  a  forfeiture  without  sho-\\ing  that  it  has  given  the  notice 
required,  in  the  proper  manner,  and  at  the  proper  time.^^ 
Usage  on  the  part  of  the  insurance  company,  of  the  giving 
notice  of  the  day  of  payment,  and  the  reliance  of  the  as- 
sured upon  such  notice,  is  no  excuse  for  non-payment.^^  In 
some  states  the  legislature  has  interfered  on  behalf  of  the 
insured,  and  has  by  statute  prevented  a  literal  enforcement 
of  the  policy  forfeiting  the  rights  of  the  insured  for  non- 
payment of  premiums  upon  the  due-day,  and  required  that 
when  a  premium  becomes  due  notice  must  be  given,  and  a 
specified  time  allowed  in  which  to  pay,  before  the  policy  can 
be  forfeited  for  non-payment  of  premium.  The  provisions 
of  a  statute,  making  the  serving  of  the  notice  a  condition 
precedent  to  the  forfeiting  of  the  policy,  cannot  be  superseded 
by  the  contract  of  the  parties.®^  But  such  law,  while  control- 
ling the  rights  of  the  insurer  to  forfeit  the  policy  of  insured, 
does  not  destroy  the  rights  of  the  contracting  parties  to  agree 
to  abandon  the  contract.®* 

«^  Covenant  Mut.  Ben.  Ass'n  v.  Spies,  114  111,  463;  Wolf  v.  Michi- 
gan Masonic  Mut.  Ben.  Ass'n,  108  Mich.  665,  66  N.  W.  576;  Goodwin 
V.  Provident  Sav.  Life  Assur.  Ass'n,  97  Iowa,  226,  66  N.  W.  157,  32 
L.  R.  A.  473;  Benedict  v.  Grand  Lodge,  A.  O.  U.  W..  48  Minn.  471; 
Shelden  v.  National  Masonic  Ace.  Ass'n,  122  Mich.  403,  81  N.  W.  266. 

"^Thompson  v.  Knickerbocker  Life  Ins.  Co..  104  U.  S.  252;  Man- 
dego  V.  Centennial  Mut.  Life  Ass'n,  64  Iowa,  134. 

"^  Baxter  v.  Brooklyn  Life  Ins.  Co.,  119  N.  Y.  450;  Laws  N.  Y.  1877, 
c.  321;  Laws  N.  Y.  1892,  c.  690,  §  92;  Equitable  Life  Assur.  Soc.  v. 
Trimble  (C.  C.  A.),  83  Fed.  85;  Nail  v.  Provident  Sav.  Life  Assur. 
Soc.  (Tenn.  Ch.  App.),  54  S.  W.  109.  For  construction  of  this  New 
York  statute,  see  Banholzer  v.  New  York  Life  Ins.  Co.,  74  Minn. 
387,  77  N.  W.  295;  Trimble  v.  New  York  Life  Ins.  Co.,  20  Wash.  386, 
55  Pac.  429;  Rosenplanter  v.  Provident  Sav.  Life  Assur.  Soc.  (C.  C. 
A.),  96  Fed.  721.  46  L.  R.  A.  473. 

"  Mutual  Life  Ins.  Co.  v.  Hill,  178  U.  S.  347. 


I   133  NONFORFEITABLE    TOLICIES.  307 

Nonforfeitable  Policies. 

Some  policies  contain  a  provision  that  if,  after  they  have 
heen  kept  ^live  a  designated  time,  or  until  after  a  certain 
number  of  premiums  have  been  paid,  they  should  lapse  by 
reason  of  non-payment  of  premium,  then  the  risk  will  be 
carried  by  the  insurer  for  a  given  time,  notwithstanding  the 
failure  to  pay  the  premium  stipulated  for;  or  the  insured 
may,  at  his  option,  upon  surrender  of  the  policy,  obtain  a 
new  one  for  a  sum  proportioned  to  the  amount  of  premiums 
which  have  been  paid.  Such  policies  are  termed  non-for- 
feitable.  They  are  written  upon  the  theory  that  the  premium 
paid  is  more  than  sufficient  to  carry  yearly  or  term  insurance, 
and  that  there  is  in  the  hands  of  the  insurer  at  the  time  of 
failure  to  pay  the  premiuifi  a  surplus  to  the  benefit  of  which 
the  insured  is  entitled.  In  effect  it  enables  him  to  partici- 
pate in  the  profits  of  the  business  of  the  insurer.  In  many 
states  this  subject  is  regulated  by  statute.*'^ 

Upon  familiar  principles  of  laAV  the  statutes  of  a  state 
enter  into  and  become  a  part  of  every  contract  made  within 
a  state,  or  which  is  to  be  construed  as  a  contract  of  that  state. 
They  are  neither  retroactive  nor  retrospective,  nor  can  their 
repeal  affect  contracts  made  subject  to  them.^^  The  pro- 
visions of  such  statute  are  intended  for  the  benefit  of  the  in- 
sured, and  may  be  waived  by  him.  Thus,  a  termination  of 
a  life  insurance  policy  by  mutual  agreement  after  defaulting 
in  payment  of  premiums,  and  the  refusal  of  the  insured  to 
continue  the  policy,  is  conclusive  against  the  insured,  not- 

•"Deering's  Ann.  Civ.  Code  Cal.  §  2766;  1  Mill's  Stat.  Colo.  1891, 
§  2223;  Rev.  St.  Me.  1883.  p.  460,  §  91;  Pub.  Laws  Me.  1887,  c.  71; 
How.  Ann.  St.  Mich.  1882,  §  4232;  St.  Mass.  1880,  c.  232,  §  6;  Id. 
1882,  c.  119,  §§  159-160;  Id.  1887,  c.  214,  §  76;  3  Rev.  St.  N.  Y. 
(8th  Ed.)  D.  1688. 

"^  McDonnell  v.  Alabama  G.  L.  Ins.  Co.,  85  Ala.  401;  Hope  Mut. 
Ins.  Co.  v.  Flynn,  38  Mo.  483,  90  Am.  Dec.  438;  ante,  §§  55,  68. 


308  THE    PKEMIUM.  §   13S 

withstanding  tlie  statutory  provision  precluding  a  forfeit- 
ure.^'^ 

Tlie  precise  nature  of  the  rights  of  the  insured,  and  the 
liability  of  the  insurer,  must  vary  according  to  the  condi- 
tions of  the  contract,  and  statute  under  which  it  is  made.^* 

The  Return  of  the  Premium. 

As  we  have  seen,  the  consideration  for  the  premium  Is  the 
attaching  of  the  risk,  and  the  insurance  afforded.  When 
for  any  reason  the  contract  has  not  been  consummated,  or  a 
risk  never  attaches^  or  the  policy  is  void,  there  is  no  consider- 

«^  Mutual  Life  Ins.  Co.  v.  Phinney,  178  U.  S.  327;  Mutual  Life  Ins. 
Co.  V.  Sears,  178  U.  S.  345;  Mutual  Life  Ins.  Co.  v.  Hill,  178  U.  S. 
347;  Mutual  Life  Ins.  Co.  v.  Allen,  178  U.  S.  351. 

<^In  Carter  v.  John  Hancock  Mut.  Life  Ins.  Co.,  127  Mass.  153, 
the  court  said:  "The  purpose  of  the  statute  is  merely  to  establish 
a  rule  which  shall  enable  the  assured  to  reap  the  full  benefit  of  pre- 
miums paid  before  default  on  his  part,  and,  at  the  same  time,  to 
secure  to  the  insurance  company,  in  case  it  is  obliged  to  pay,  the 
full  amount  of  the  premiums  which  the  terms  of  the  policy  call  for. 
It  is  not  the  purpose  of  the  statute  to  make  a  new  contract  between 
the  parties,  nor  to  make  any  change  in  the  time  when  the  amount 
of  the  policy  becomes  payable.  *  *  *  The  premium  provided  for 
by  the  policy  is  fixed  with  reference  to  the  endowment  feature,  and 
is,  of  course,  much  larger  than  is  paid  for  a  pure  life  policy,  whea 
the  age  of  the  assured  is  such  that  his  expectation  of  life  is  largely 
in  excess  of  the  period  at  the  end  of  which  the  amount  of  the  policy 
is  made  payable." 

The  making  of  a  default,  and  the  conversion  of  the  policy  from 
an  annual  premium  policy  to  a  paid-up  policy,  is  at  the  option  of  the 
insured.  Lovell  v.  St.  Louis  Mut.  Life  Ins.  Co.,  Ill  U.  S.  264. 
This  right  to  exercise  the  option  is  lost  by  the  surrender  of  the 
policy.  Mover  v.  Manhattan  Life  Ins.  Co.,  144  Ind.  439,  43  N.  E. 
448;  Mutual  Life  Ins.  Co.  v.  Phinney,  178  U.  S.  327. 

For  construction  of  policies  containing  this  feature,  see,  also, 
Lewis  V.  Penn  Mut.  Life  Ins.  Co.,  3  Mo.  App.  372;  Chase  v.  Phoenix 
Mut.  Life  Ins.  Co.,  67  Me.  85;  Hamilton  v.  Mutual  Ben.  Life  Ins.  Co., 
109  Ga.  381,  34  S.  E.  593;  Matlack  v.  Mutual  Life  Ins.  Co.,  180  Pa. 
St.  360.  36  Atl.  1082;  Sheerer  v.  Manhattan  Life  Ins.  Co.,  20  Fed. 
886;  Smith  v.  National  Life  Ins.  Co.,  103  Pa.  St.  177;  McConnell  v. 


§  133  KETUKN  OE  PREMIUM.  309 

ation  to  sustain  tlie  pa^Tnent  of  the  premium,  and  if  paid  it 
must  be  returnc  1.     If  unpaid  it  cannot  be  coUected.*^^ 

Thus  if  a  policy  upon  which  premiums,  have  been  paid  is 
void  because  of  misconduct  on  the  part  of  the  agent  procur- 
ing it,  without  fault  on  the  part  of  the  applicant,  the  company 
is  liable  for  the  return  of  the  premiums  which  have  been 
paidJ"  So  if  the  risk  did  not  attach  because  the  sole  0"\\T.iei^ 
sliip  of  the  insured  property  was  not  in  the  insured  ;'^^  or  if 
the  insurer,  by  virtue  of  a  condition  of  the  policy,  exercises 
the  right  given  him  to  avoid  it  in  toto,  and  from  the  begin- 
ning;'^^  or  if  the  contract  was  conditional,  and  never  became 
in  force  or  effect.'^^  But  an  insured  cannot  recover  back  the 
premium  when  the  policy  is  void  because  of  fraudulent  mis- 
representations or  concealment  on  his  part;"^"*  nor  if  the  con- 
tract be  illegal  in  its  inception,  if  the  parties  are  in  'pari  dc- 
licto.'^°  An  infant  cannot  recover  premiums  paid  for  insur- 
ance upon  his  Qwn  life  when  the  contract  is  fair  and  reason- 
able and  free  from  fraud  or  bad  faith  on  the  part  of  the 

Provident  Sav.  Life  Assur.  Soc.  (C.  C.  A.),  92  Fed.  769;  Omalia 
Nat.  Bank  v.  Mutual  Ben.  Life  Ins.  Co.,  81  Fed.  935;  McMaster  v. 
New  York  Life  Ins.  Co.,  78  Fed."  33. 

""Schreiber  v.  German-American  Hail  Ins.  Co.,  43  Minn.  367;  Wal- 
ler v.  Northern  Assur.  Co.,  64  Iowa,  101;  McCutcheon  v.  Rivers,  68 
Mo.  122;  Prentice  v,  Knickerbocker  Life  Ins.  Co.,  77  N.  Y.  483; 
United  States  Life  Ins.  Co.  v.  Wright,  33  Ohio  St.  533;  Abell  v. 
Penn  Mut.  Life  Ins.  Co.,  18  W.  Va.  400. 

™  New  York  Life  Ins.  Co.  v.  Fletcher,  117  U.  S.  519. 

''  Waller  v.  Northern  Assur.  Co.,  64  Iowa,  101. 

'-  Schreiber  v.  German-American  Hail  Ins.  Co.,  43  Minn.  367, 

"'Harnickell  v.  New  York  Life  Ins.  Co.,  40  Hun  (N.  Y.),  558. 

''Aetna  Life  Ins.  Co.  v.  Paul,  10  111.  App.  431;  Fisher  v.  Metro- 
politan Life  Ins.  Co.,  162  Mass.  236. 

''Howard  v.  Refuge  Friendly  Society,  54  Law  T.  (N.  S.)  644; 
Russell  V.  De  Grand,  15  Mass.  35;  1  Story,  Eq.  Jur.  (6th  Ed.)  69; 
Welsh  V.  Cutler,  44  N.  H.  561.  Nor  can  the  insurer  collect  the  pre- 
mium in  such  case.  Eldred  v.  Malloy,  2  Colo.  320,  25  Am.  Rep.  752; 
Comly  V.  Hillegass,  i)4  Pa.  St.  132.  39  Am.  Rep.  774. 


310  THE   PREMIUM.  §  133 

insurer,  and  the  insurance  was  liad  in  a  solvent  company,  at 
ordinary  and  usual  rates,  for  an  amount  reasonably  commen- 
surate with  the  infant's  estate. "^^ 

Excuses  for  Nonpayment. 

It  is  elementary  that  when  the  performance  of  a  con- 
tract becomes  impossible  by  the  act  of  God,  the  obligor  is 
excused,  and  his  rights  under  the  contract  are  not  forfeited. 
This  rule  contemplates  only  cases  of  absolute  impossibility 
to  perform — contracts  in  which  the  conditions  could  not  have 
been  performed  by  the  obligors,  nor  by  others  for  them,  and 
where  neither  the  exercise  of  prudence  or  foresight  could 
have  provided  against  the  effects  of  the  act  of  God.  Neither 
sickness  nor  insanity  of  the  insured  is  an  excuse  for' failure  to 
pay  the  premium,  for  the  act  required  is  not  a  personal  act, 
and  could  have  been  performed  by  others  than  the  insured.'^ ^ 
Otherwise  where  the  contract  contains  a  provision  to  the  con- 
trary in  case  of  sickness,  or  for  valid  reason,  or  provides  for 
payment  within  a  reasonable  time  after  the  premium  be- 
comes due.'^^  The  insured  is  not  excused  from  paying  his 
premiums  because  the  insurer  holds  his  policy  as  bailee  ;'^'^ 
nor  because  the  insurer  has  engaged  in  business  which  is 
nltra  vires  its  powers,  unless  the  insured  is  specially  dam- 
aged thereby.^"  A  premium  cannot  be  paid  by  an  intermed- 
dler.^^     But  the  beneficiary  of  a  certificate  on  the  life  of  her 

'"  Johnson  v.  Northwestern  Mut.  Life  Ins.  Co.,  56  Minn.  365. 

''Klein  v.  New  York  Life  Ins.  Co.,  104  U.  S.  88;  Thompson  v. 
Knickerbocker  Life  Ins.  Co.,  104  U.  S.  252;  Wheeler  v.  Connecticut 
Mut.  Life  Ins.  Co.,  82  N.  Y.  543;  Carpenter  v.  Centennial  Mut.  Life 
Ass'n,  68  Iowa,  453,  27  N,  W.  456. 

"Dennis  v.  Massachusetts  Ben.  Ass'n,  47  Hun  (N.  Y.),  338;  Van 
Houten  v.  Pine,  38  N.  J.  Eq.  72;  Howell  v.  Knickerbocker  Life  Ins. 
Co.,  44  N.  Y.  276. 

"  Howard  v.  Mutual  Ben.  Life  Ins.  Co.,  6  Mo.  App.  577. 

^  Haydel  v.  Mutual  Reserve  Fund  Life  Ass'n,  98  Fed.  200. 

*^  Whiting  V.  Massachusetts  Mut.  Life  Ins.  Co.,  129  Mass.  240. 


§m 


TENDER. 


311 


father  who  Is  insane  and  incapable  of  attending  to  business, 
is  entitled  to  notice  of  Lis  default  in  paying  assessments,  and 
has  the  right  to  pay  them  herself  after  she  has  given  notice 
to  the  company  of  his  condition,  and  requested  notice  of 
default.®^  An  insurer,  however,  is  not  bound  to  give  notice 
of  the  day  upon  which  the  premium  becomes  due,  unless  the 
contract  so  provides,  and  its  failure  to  give  notice,  though 
its  usage  has  been  to  the  contrary,  will  not  excuse  the  non- 
payment^^ But  misrepresentations  of  the  insurer  and  its 
agents,  which  mislead  the  insured,  and  induce  him  to  refrain 
from  paying  the  premiums,  furnish  a  good  excuse  for  non- 
payment.^* 

Excuse  for  Default  —  Tender. 

§  134.  After  tlie  insurer  has  declared  a  policy  forfeited  or  ter- 
minated the  insured  need  not  tender  subsequent  premiums, 

A  tender  of  a  premium  when  due  to  one  authorized  to  re- 
ceive payment  is  just  as  effective  to  preserve  the  rights  of 
the  insured  as  its  payment  Avould  have  been.^^  After  an 
insurer  has  declared  a  policy  forfeited  the  insured  loses  no 
rights  by  failure  to  tender  subsequent  premiums.  One  party 
cannot  predicate  a  forfeiture  upon  an  omission  by  the  other 
which  his  own  conduct  has  helped  to  bring  about.     The  dec- 

'"Buchannan  v.  Supreme  Conclave,  I.  0.  H.,  178  Pa.  St.  465,  34 
L.  R.  A.  436. 

"'Smith  V.  National  Life  Ins.  Co.,  103  Pa.  St.  177;  Thompson  v. 
Knickerbocker  Life  Ins.  Co.,  104  U.  S.  252;  Survick  v.  Valley  Mut. 
Life  Ass'n  (Va.),  23  S.  E.  223.  As  to  effect  of  war  as  an  excuse  for 
nonpayment  of  premium,  see  Clemmitt  v.  New  York  Life  Ins.  Co., 
76  Va.  355;  New  York  Life  Ins.  Co.  v.  Statham,  93  U.  S.  24;  Con- 
necticut Mut.  Life  Ins.  Co.  v.  Duerson's  Ex'r.  28  Grat.  (Va.)  630; 
Mutual  Ben.  Life  Ins.  Co.  v.  Hillyard,  37  N.  J.  Law,  444. 

^*  Colby  V.  Life  Ind.  &  Inv.  Co.,  57  Minn.  510. 

"■'Hallock  V.  Commercial  Ins.  Co.,  26  N.  J.  Law,  268;  Manhattan 
Life  Ins.  Co.  v.  Le  Pert,  52  Tex.  504;  Beatty  v.  Mutual  Reserve 
Fund  Life  Ass'n   (C.  C.  A.),  75  Fed.  65. 


312  THE   PKEMIUM.  §  134 

laration  tliat  a  policy  of  insurance  is  already  forfeited  will 
constitute  a  sufficient  justification  for  the  omission  to  tender 
subsequently  accruing  premiums,  upon  the  ground  that  tho 
assured  is  justified  in  believing  that  no  tender  would  be  ac- 
cepted.^^ 

Renewal  Premiums. 

A  renewal  premim  is  considered  as  in  effect  paid,  or  pre- 
payment waived,  by  the  delivery  of  a  renewal  receipt  properly 
signed,  continuing  the  policy  in  force,  even  though  the  policy 
requires  actual  pre-payment  of  the  premium.^'' 

Reinstatement  of  Policy  Forfeited  for  Nonpayment  of  Pre- 
mium. 

Where  by  misrepresentations  of  the  insurer  the  insured 
is  misled  and  induced  to  refrain  from  paying  premiums  he 
otherwise  would  have  paid  at  the  proper  time,  and  because  of 
such  non-payment  the  policy  is  forfeited,  he  is  entitled  to 
have  his  policy  reinstated  upon  payment  of  the  proper  pre- 
miums, as  soon  as  he  learns  of  his  mistake,  if  this  be  during 
his  life.  If  the  insured  dies  before  discovering  his  mistake 
the  beneficiary  can  recover  on  the  policy,  upon  payment  of 
the  premiums.  The  insurer  will  never  be  allowed  to  profit 
by  declaring  a  forfeiture  through  non-payment  which  it  has 
wrongfully  induced.^^ 

*°  National  Mut.  Ins.  Co.  v.  Home  Ben.  Soc,  181  Pa.  St.  443,  37 
Atl.  519;  Supreme  Lodge,  K.  of  H.,  v.  Davis,  26  Colo.  252,  58  Pac. 
595;  Shaw  v.  Republic  Life  Ins.  Co.,  69  N.  Y.  286;  Girard  Life  Ins. 
Co.  V.  Mutual  Life  Ins.  Co.,  86  Pa.  St.  236. 

*'Tennant  v.  Travellers'  Ins.  Co.,  31  Fed.  322;  McCabe  v.  Aetna 
Ins.  Co.  (N.  D.),  81  N.  W.  427;  Willey  v.  Fidelity  &  Casualty  Co., 
77  Fed.  961. 

»^  Colby  V.  Life  Ind.  &  Inv.  Co.,  57  Minn.  510;  Shelden  v.  National 
Masonic  Ace.  Ass'n,  122  Mich.  403,  81  N.  W.  266;  Leslie  v.  Knicker- 
bocker Life  Ins.  Co.,  63  N.  Y.  27;  ante,  notes  60,  86. 


§  134  .  KEINSTATEMENT.  313 

A  policy  holder  may  compel  reinstatement  upon  tender  of 
the  proper  premium,  where  his  policy  is  sought  to  be  forfeited 
for  non-payment  of  an  excessive  assessments^  But  such  an 
action  must  he  brought  within  the  time  specified  in  tlie- 
policy.^^  Where  a  contract  provides  for  reinstatement  the 
insured  is  entitled  to  be  reinstated  upon  the  exact  terms  stip- 
ulated for.^^  And  the  insurer  cannoj:,  after  the  issuing  of 
the  contract,  attach  new  requirements  as  conditions  prece- 
dent to  reinstatement.^^  A  policy  suspended  for  non-pay- 
ment of  premium,  is  revived  by  the  subsequent  payment 
flnd  acceptance  thereof  during  the  term  of  the  policy  and  be- 
fore loss  has  occurred.^ ^ 

The  right  of  reinstatement  within  a  certain  period,  upon 
payment  of  accrued  assessments  after  the  forfeiture  of  a 
policj"  which  takes  place  eo  instanti  by  oj)eration  of  law,  and 
without  notice,  according  to  the  contract,  is  terminated  by 
the  death  of  the  member  without  such  payment  during  the 
time  allowed  for  such  reinstatement.^^ 

*'Bagley  v.  Mutual  Reserve  Fund  Life  Ass'n,  24  Misc.  Rep. 
(N.  Y.)    634,  54  N.  Y.  Supp.  189. 

""Survick  v.  Valley  Mut.  Life  Ass'n  (Va.),  23  S.  E.  223.  Concern- 
ing rights  of  members  of  mutual  societies  to  reinstatement,  see 
Supreme  Lodge  Nat.  Resei've  Ass'n  v.  Turner,  19  Tex.  Civ.  App.  340, 
47  S.  W.  44;  Sovereign  Camp,  W.  of  W.,  v.  Rothschild,  15  Tex.  Civ. 
App.  463,  40  S.  W.  553. 

"^Manson  v.  Grand  Lodge,  A.  O.  U.  W.,  30  Minn.  509;  Davidson  v. 
Old  People's  Mut.  Ben.  Soc,  19  Minn.  303. 

"-  Sieverts  v.  National  Benev.  Ass'n,  95  Iowa,  710,  64  N,  W.  671.  In 
this  case  it  was  held  that  the  insurer  could  not,  after  the  issuing  of 
a  policy,  bind  the  insured  by  the  adoption  of  a  by-law  requiring  a 
health  certificate  to  be  furnished  as  a  condition  precedent  to  rein-' 
statement,  in  addition  to  the  other  requirements,  unless  the  right 
to  do  so  was  expressly  reserved  in  the  contract.  Hobbs  v.  Iowa 
Mut.  Ben.  Ass'n.  82  Iowa.  107.  47  N.  W.  983. 

"^  Schreiber  v.  German-American  Hail  Ins.  Co.,  43  Minn.  367; 
American  Ins.  Co.  v.  Klink,  65  Mo.  78. 

"'Carlson  v.  Supreme  Council.  A.  L.  of  H.,  115  Cal.  466,  35  L.  R. 
A.  643. 


314  THE    PREMIUM.  §  135 

An  insured  avIio,  as  a  condition  precedent  to  reinstatement,, 
signs  a  health  certificate,  certifying  that  on  its  date  he  is  and 
has  continuously  been  in  good  health,  and  free  from  disease 
and  infirmity,  certifies  only  to  his  condition  during  his  de- 
linquency.^^ A  reinstatement  of  a  policy  which  has  lapsed 
for  non-payment  of  premiums,  obtained  through  a  fraudulent 
misrepresentation  of  material  facts  made  by  the  insured,  is 
ineffectual,  and  not  binding  upon  the  insurer.^^  The  doc- 
trine of  the  revival  of  contracts  suspended  by  war  cannot  be 
invoked  to  revive  a  contract  of  life  insurance  whose  ternii? 
make  prompt  payments  at  stipulated  times  the  essence  of  the 
contract.^'^ 

Waiver  of  Non-patment. 

§  135.  Any  agreement,  declaration,  or  course  of  action  on  the 
part  of  an  insurance  company,  which  leads  the  party  insured 
honestly  and  justifiably  to  believe  that  by  comforming  thereto 
a  forfeiture  of  his  policy  will  not  be  incurred,  followed  by  due 
conformity  on  his  part,  will  estop  the  company  from  insisting 
upon  a  forfeiture  which  might  otherwise  be  claimed  under  the 
express  wording  of  the  contract. 

The  fundamental  general  rule  of  the  law  is  that  the  con- 
tract actually  existing  between  the  parties,  and  the  perform- 
ance of  the  respective  obligations  to  which  they  have  agreed,, 
shall  be  enforced.  But  a  contract  once  made  may  be  modi- 
fied, and  provisions  favorable  to  either  party  may  be  relaxed 
or  eliminated.  Whether  the  minds  of  the  parties  have  met 
on  such  modification  or  relaxation  may  be  determined  as- 
well  from  acts  and  conduct  as  from  express  words.  When 
the  exact  performance  of  a  condition  is  not  important  to  the- 
obligee,  and  the  requirement  of  strict  performance  results  in 

"'Reilly  v.  Chicago  Guaranty  Fund  Life  Soc,  75  Minn.  377,  77 
N.  W.  982. 

"''  Massachusetts  Ben.  Life  Ass'n  v.  Robinson,  104  Ga.  256,  42r 
L.  R.  A.  26L 

»"  New  York  Life  Ins.  Co.  v.  Statham,  93  U.  S.  24. 


§  135  WAIVER    OF    NON-rAYMENT.  315 

serious  injury  or  in  forfeiture  to  the  obligor,  courts  lean  to 
such  construction  of  the  contract  and  the  words  and  acts  of 
the  parties,  as  will  be  most  likely  to  accomplish  the  tnie  pur- 
pose and  understanding  of  the  parties,  as  well  as  to  promote 
justice.  In  line  with  such  general  policy  the  rule  has  become 
established  that  where  by  failure  of  some  exact  performance 
a  forfeiture  is  imposed  on  one  party  by  the  strict  terms  of 
an  agreement,  conduct  of  the  other  sufficient  to  induce  a  be- 
hef  that  such  strict  perfonnance  is  not  insisted  upon,  but 
that  a  modified  performance  is  satisfactory  and  will  be  ac- 
cepted as  an  equivalent,  justifies  a  conclusion  that  the  parties 
have  assented  to  a  modification  of  the  original  terms,  and 
that  their  minds  have  met  upon  the  new  understanding  that 
a  different  mode  of  performance  shall  have  the  same  effect, 
or,  as  it  is  often  expressed,  that  the  obligee  has  waived  strict 
performance.^^ 

Waiver  or  forfeiture  for  non-payment  of  the  premium  at 
the  stipulated  time  will  be  treated  as  unconditional,  unless 
a  contrary  understanding  of  the  parties  clearly  appears.^* 
An  agreement  made  after  the  issuance  of  the  policy,  whereby 
the  insurer  agrees  to  accept  quarterly  instead  of  annual  pay- 
ments of  premiums,  and  that  the  forfeitures  stipulated  for 
in  case  of  non-payment  shall  not  take  effect  if  the  premiums 
are  paid  within  a  reasonable  time,  is  valid  and  binding.  ^^^ 
An  insurer  cannot  continue  its  right  to  insist  upon  forfeiting 
a  contract  unless  payments  are  made,  and  at  the  same  time 

'^  Hartford  Life  &  Annuity  Ins.  Co.  v.  Unsell,  144  U.  S.  439;  Muel- 
ler V.  Grand  Grove,  U.  A.  O.  D.,  69  Minn.  236,  72  N.  W.  48;  Roby  v. 
American  Cent.  Ins.  Co.,  120  N.  Y.  510;  Griffin  v.  Prudential  Ins. - 
Co.,  43  App.  Div.  (N.  Y.)  499;  Mobile  Life  Ins.  Co.  v.  Pruett,  74 
Ala.  487;  Alexander  v.  Continental  Ins.  Co.,  67  Wis.  422,  30  N.  W. 
727;  National  Mut.  Ben.  Ass'n  v.  Jones,  84  Ky.  110;  ante,  note  88. 

'"'  Murray  v.  Home  Ben.  Life  Ass'n,  90  Cal.  402. 

"^  De  Frece  v.  National  Life  Ins.  Co..  136  N.  Y.  144. 


316  THE   PKEMIUM.  §  135 

accept  overdue  payments  of  premiums  whenever  tendered.  ^"^ 
But  an  occasional  acceptance  of  an  overdue  premium  while 
the  insured  was  in  good  health,  does  not  of  itself  constitute  a 
waiver  of  the  right  to  enforce  the  stipulations  of  the  contract 
concerning  payment.  ^'^^  And  a  benefit  society  does  not  waive 
a  forfeiture  for  non-payment  of  assessments  by  making 
further  assessments,  and  giving  notice  thereof  within  the 
period  during  which  the  insured  has  a  right  to  reinstatement 
upon  making  pajTuent  of  all  accrued  assessments. -^"^  Nor 
does  a  collection  of  an  assessment  from  one  whose  member- 
ship has  been  forfeited,  restore  such  person  to  membership, 
where  the  contract  provides  that  the  collection  of  assessments 
shall  not  operate  to  relieve  any  one  from  a  forfeiture. -^"^  An 
acceptance  of  premiums  after  they  are  due  and  reinstatement 
of  the  insured  does  not  waive  the  prompt  payment  of  future 
premiums  where  there  is  an  express  agreement  that  the  rein- 
statement shall  not  waive  forfeiture  for  future  non-pay- 
ments.-^°^ 

A  waiver  that  will  preclude  the  insurer  from  relying  on  the 
terms  of  the  policy  must  be  in  the  nature  of  an  estoppel. 
The  insurer  must,  by  some  act  of  an  agent  having  real  or 
apparent  authority,  have  done  or  said  something  that  in- 
duced the  plaintiff. to  do  or  forbear  to  do  something  to  his 
prejudice.^°^  An  insurer  is  not  required  to  do  any  affirm- 
ative act  declaring  forfeiture  for  violation  of  the  conditions 

'"^  Sweetser  v.  Odd  Fellows'  Mat.  Aid  Ass'n.  117  Ind.  97. 

^"^Lantz  V.  Vermont  Life  Ins.  Co.,  139  Pa.  St.  546,  10  L.  R.  A.  577; 
Haydel  v.  Mutual  Reserve  Fund  Life  Ass'n.  98  Fed.  200. 

"^  Carlson  v.  Supreme  Council,  A.  L.  of  H.,  115  Cal.  466,  35  L.  R. 
A.  643. 

">*  Ellerbe  v.  Faust.  119  Mo.  653,  25  L.  R.  A.  149. 

1"^  French  v.  Hartford  L.  &  A.  Ins.  Co.,  169  Mass.  510,  48  N.  E.  268. 

^"^  Weidert  v.  State  Ins.  Co.,  19  Or.  261. 


§  135  WAIVER    OF    NO\-PAYMENT.  317 

of  a  policj;  wHich  causes  the  policy  by  its  own  terms  to  be- 
come void.^^''' 

Illustrations  — No  Waiver. 

Where  a  policy  provides  for  forfeiture  upon  non-payment 
of  the  premium  ad  diem,  the  acceptance  of  a  note  waives  pay- 
ment of  the  premium,  but  the  conditions  of  the  policy  con- 
cerning forfeiture  for  non-payment  of  the  note  becomes  op- 
erative. ^°^  There  is  no  waiver  of  prompt  payment  of  a  pre- 
mium, unless  the  insurer  does  or  omits  some  act  whereby 
the  insured  has  just  ground  to  believe,  and  does  believe,  and 

"^Betcher  v.  Capital  Fire  Ins.  Co.,  78  Minn.  240,  80  N.  W.  971. 
See,  also,  concerning  waiver.  New  York  Life  Ins.  Co.  v.  McGowan, 
18  Kan.  300;  Phoenix  Mut.  Life  Ins.  Co.  v.  Hinesley,  75  Ind.  1; 
Missouri  Valley  Life  Ins.  Co.  v.  Dunklee,  16  Kan.  158;  Robinson  v. 
Pacific  Fire  Ins.  Co.,  18  Hun  (N.  Y.),  395;  Alabama  G.  L.  Ins.  Co. 
V.  Garmany,  74  Ga.  51. 

For  illustrations  of  waiver,  see  Mallory  v.  Ohio  Farmers'  Ins.  Co., 
90  Mich.  112,  51  N.  W.  188;  Phenix  Ins.  Co.  v.  Tomlinson,  125  Ind. 
84,  9  L.  R.  A.  317;  Southern  Life  Ins.  Co.  v.  Kempton,  56  Ga.  339; 
Piedmont  &  A.  Life  Ins.  Co.  v.  Lester,  59  Ga.  812;  Hopkins  v. 
Hawkeye  Ins.  Co.,  57  Iowa.  203;  Smith  v.  St.  Paul  F.  &  M.  Ins.  Co., 
3  Dak.  80;  Krumm  v.  Jefferson  Fire  Ins.  Co.,  40  Ohio  St.  225. 

Effect  of  other  defences:  The  receiving  and  retaining  of  a  pre- 
mium after  a  forfeiture,  waives  any  known  previous  cause  of  for- 
feiture. Smith  V.  St.  Paul  F.  &  M.  Ins.  Co.,  3  Dak.  80;  as  misrepre- 
sentations, Seibel  v.  Northwestern  Mut.  Relief  Ass'n,  94  Wis.  253, 
68  N.  "W.  1009;  or  alienation  or  change  of  title,  Cornell  v.  Tiverton 
&  L.  C.  Mut.  Fire  Ins.  Co.  (R.  I.),  35  Atl.  579;  or  the  erection  of  an 
adjoining  building  contrary  to  the  provisions  of  the  policy, 
Schmurr  v.  State  Ins.  Co.,  30  Or.  29,  46  Pac.  363;  or  a  breach  of 
warranty,  for  which  the  insurer  could  avoid  the  policy,  Selby  v. 
Mutual  Life  Ins.  Co.,  67  Fed.  490;  Phinney  v.  Mutual  Life  Ins.  Co;,  CT' 
Fed.  493;  or  a  breach  of  condition  avoiding  the  policy  in  case  of 
foreclosure  of  a  mortgage  without  the  insurer's  consent.  Bloom  v. 
State  Ins.  Co.,  94  Iowa,  359,  62  N.  W.  810. 

'"'  Thompson  v.  Knickerbocker  Life  Ins.  Co..  104  U.  S.  252. 


318  THE    PREMIUM.  §  135 

acts  on  tlie  belief,  tliat  tlie  insurer  will  mal^e,  continue,  or 
restore  the  contract.  ^*^^ 

Sending  the  policy  to  the  insured  on  his  promise  to  remit 
the  premium,  does  not  estop  the  insurer  from  denjdng  its 
validity  for  non-payment  of  a  premium,  as  against  a  mort- 
gagee, to  whom  the  loss,  if  any,  is  payable,  although  the  latter 
received  the  x>oliey  from  the  assured  without  notice  of  non- 
pa}^nent  of  the  premium.  ^^® 

'^°Home  Ins.  Co.  v.  Karn  (Ky.),  39  S.  W.  501;  Baldwin  v.  Ger- 
man Ins.  Co.,  105  Iowa,  379,  75  N.  W.  326;  French  v.  Hartford  L. 
&  A.  Ins.  Co..  169  Mass.  510;  Mosser  v.  Knights  Templars'  &  M. 
Life  Ind.  Co..  115  Mich.  672,  74  N.  W.  230;  Equitable  Life  Assur. 
Soc.  V.  McElroy,  49  U.  S.  App.  548,  83  Fed.  631;  Conway  v.  Phoenix 
Mut.  Life  Ins.  Co.,  140  N.  Y.  79. 

"°  Union  Bldg.  Ass'n  v.  Rockford  Ins.  Co.,  83  Iowa,  647.  See,  also, 
Clark  V.  Insurance  Co.  of  North  America.  89  Me.  26,  35  Atl.  1008; 
How  V,  Union  Mut.  Life  Ins.  Co..  80  N.  Y.  32;  Brown  v.  Massa- 
chusetts M.  L.  Ins.  Co.,  59  N.  H.  298. 

Who  can  waive:  See  ante,  c.  8,  "Agents." 


CHAPTER  XI. 

WARRANTIES  AND  REPRESENTATIONS. 

§  136-138.  Nature  and  Definitions. 

139.  What  are  Warranties. 

140.  Representations  and  Misrepresentations. 

141.  Concealment. 

142.  Fraud. 

143.  Mistakes  of  Agents. 

144.  Waiver  of  Misrepresentation,  Breach  of  Warranty,  Fraud 

or  Concealment. 

145.  Burden  of  Proof  of  Breach  of  Warranty  or  Misrepre- 

sentation. 

Natuke  and  Defiistitioxs. 

§  136.  In  the  law  of  insurance  a  warranty  is  always  a  part 
of  the  contract. 

§  137.  A  warranty  is  a  stipulation,  assertion,  or  statement 
of,  or  related  to,  some  fact  connected  with  the  subject  matter 
of  the  insurance,  upon  the  literal  truth  of  which  the  validity  of 
the  contract  depends,  without  regard  to  the  materiality  of 
such  fact,  or  the  motive  which  prompted  such  stipulation, 
assertion,  or  statement. 

^  138.  A  representation  is  a  stipulation,  assertion,  or  state- 
ment relative  to  the  risk  assumed,  and  is  collateral  to  the  con- 
tract. It  is  sufficent  if  a  representation  be  substantially  true, 
or  substantially  complied  with.  Only  when  made  of  and  con- 
cerning a  fact  material  to  the  risk  can  the  falsity  of  a  represen- 
tation be  asserted  to  defeat  recovery. 

The  Difference  between  Warranties  and  Representations. 

The  difference  between  a  warranty  and  a  representation  is 
that  a  warranty  must  be  literally  true,  mthout  regard  to  its 
materiality  to  the  risk;  while  a  representation  must  be  true 
only  so  far  as  the  representation  is  material  to  the  risk.  They 
both  speak  as  of  the  time  of  the  consummation  of  the  contract. 


320  WARRANTIES   AND    REPRESENTATIONS.       §§  136-13S 

A -warranty  in  insurance  enters  into  and  forms  a  part  of  the 
contract  itself.  It  defines,  by  way  of  particular  stipulation, 
description,  condition,  or  otherwise,  the  precise  limits  of 
the  obligation  which  the  insurer  undertakes  to  assume.  No 
liability  can  arise  except  within  these  limits.  In  order  to 
charge  the  insurer,  therefore,  every  one  of  the  terms  which 
defines  its  obligation  must  be  satisfied  by  the  facts  which  are 
proven  in  a  case.  From  the  very  nature  of  the  contract  the 
party  seeking  indemnity  or  payment  must  bring  his  claim 
wdthin  the  provisions  of  the  instrument  he  is  undertaking  to 
enforce.  A  statement  which  is  a  warranty  is  a  part  and 
parcel  of  the  contract  itself,  and  in  the  nature  of  a  condition 
precedent,  and  whether  material  to  the  risk  or  not  must  be 
strictly  complied  with,  or  literally  fulfilled,  before  the  insured 
can  recover.  It  must  be  not  merely  a  substantial  conformity, 
but  exact  and  literal;  not  only  in  material  particulars,  but 
in  those  that  are  immaterial  as  well. 

A  representation  is,  on  the  other  hand,  in  its  nature  no 
part  of  the  contract  of  insurance.  Its  relation  to  the  contract 
is  usually  described  by  the  word  "collateral."  It  is  not  of 
the  essence  of  the  contract,  but  relates  to  something  prelimi-" 
nary,  Avliicli  was  an  inducement  to  the  making  of  the  con- 
tract. Though  false  it  does  not  avoid  the  contract,  unless 
it  relates  to  a  fact  actually  material,  or  clearly  intended  by 
the  parties  to  be  made  material.  It  may  be  proved  although 
existing  only  in  parol  and  preceding  the  written  instrument. 
Unlike  other  verbal  negotiations,  it  is  not  necessarily  merged 
in,  nor  waived  by,  the  subsequent  writing.  This  principle 
is  in  some  respects  peculiar  to  insurance,  and  rests  upon 
other  considerations  than  the  rule  which  admits  proof  of 
verbal  representations  to  impeach  written  instruments  upon 
the  ground  of  fraud.  Representations  to  insurers  before  or 
at  the  time  of  making  a  contract  are  a  presentation  of  the 


§§   136-138  NATURE    AND    DEFINITIONS.  321 

elements  upon  ^vllicl^  to  estimate  tlie  risk  proposed  to  be  as- 
sumed. Thej  are  the  basis  of  tbe  contract,  the  foundation, 
upon  the  faith  of  -which  it  is  entered  into.  If  wrongly  pre- 
sented in  any  respect  material  to  the  risk,  or  by  the  parties 
understood  and  intended  to  be  material  thereto,  the  policy 
"that  may  be  issued  thereon  will  not  be  binding.  To  enforce 
it  would  be  to  apply  it  to  a  risk  w^hich  was  never  presented  to 
the  insurer,  and  to  make  it  liable  for  a  risk  it  never  intended 
to  assume.-^ 
Warranties  —  Materiality  and  Good  Faith. 

By  an  express  warranty  the  insured  stipulates  for  the 
absolute  truth  of  his  statements.     Good  faith   and  honest 

^  Cable  V.  United  States  Life  Ins.  Co.  (C.  C.  A.),  Ill  Fed.  26; 
Weil  V.  New  York  Life  Ins.  Co.,  47  La.  Ann.  1405,  17  So.  853; 
Mutual  Ben.  Life  Ins.  Co.  v.  Robison  (C.  C.  A.),  58  Fed.  723; 
Kimball  v.  Aetna  Ins.  Co.,  9  Allen  (Mass.),  540;  Pboenix  Life  Ins. 
Co.  V.  Raddin,  120  U.  S.  183;  Continental  Life  Ins.  Co.  v.  Rogers, 
119' 111.  474;  O'Niel  v.  Buffalo  Fire  Ins.  Co.,  3  N.  Y.  122;  Williams 
V.  New  England  Mut.  Fire  Ins.  Co.,  31  Me.  219;  American  Credit 
Ind.  Co.  V.  Carrollton  Furniture  Mfg.  Co.  (C.  C.  A.),  95  Fed.  Ill; 
Continental  Life  Ins.  Co.  v.  Young,  113  Ind.  159;  Western  Assur.  Co. 
V.  Redding  (C.  C.  A.),  68  Fed.  714. 

"  'An  express  warranty,  *  *  *  in  tbe  law  of  insurance,  is  a 
stipulation  inserted  in  writing,  on  the  face  of  the  policy,  on  the 
literal  truth  or  fulfillment  of  which  the  validity  of  the  entire  con- 
tract depends.  *  *  *>  a  representation,  as  distinguished  from 
a  warrantj^  *  *  *  'is  a  verbal  or  written  statement,  made  by 
the  assured  to  the  underwriter  [insurer]  before  the  subscription  of 
the  policy,  as  to  the  existence  of  some  fact  or  state  of  facts  tending 
to  induce  the  insurer  more  readily  to  assume  the  risk,  by  diminish- 
ing the  estimate  he  would  otherwise  have  formed  of  it.'  *  *  *  a 
warranty  is  always  part  of  the  contract,  a  condition  precedent, 
upon  the  fulfillment  of  which  its  validity  depends.  A  representa- 
tion, on  the  other  hand,  is  not  part  of  the  contract,  but  is  collateral 
to  it.  The  essential  difference  between  a  warranty  and  a  repre- 
sentation is  that  in  the  former  it  must  be  literally  fulfilled  or  there 
is  no  contract,  the  parties  having  stipulated  that  the  subject  of  the 
warranty  is  material,  and  closed  all  inquiry  concerning  it;  while  in 
the  latter,  if  the  representation  prove  to  be  untrue,  still,  if  it  is  not 

KERR,  INS.—  21 


322  -WARRANTIES    AND    REPRESENTATIONS.       §§  13G-138 

purpose  will  not  excuse  error.  The  statements  must  be  en- 
tirely true,  or  the  warranty  is  not  fulfilled.  Nor  is  it  material 
that  some  of  the  facts  stipulated,  or  statements  or  answers 
made  and  w^arranted  to  he  true,  may  be  unimportant.  The 
j)arties  have  agreed  to  their  materiality  by  making  them  war- 
ranties, and  have  set  inquiry  as  to  that  question  at  rest. 
Where  an  insured  makes  the  truth  of  the  statements  contained 
in  his  apj^lication  the  basis  of  his  contract  of  insurance,  the 
question  whether  or  not  a  false  statement  is  actually  material 
to  the  risk  is  unimportant,  as  is  also  the  question  whether  or 
not  the  falsehood  was  intentional.  To  avoid  liability  it  is 
sufficient  for  the  insurer  to  show  that  the  statement  was 
actually  untrue.  Where  one  asserts  that  certain  statements 
are  true,  and  that  if  they  are  not  true  this  fact  shall  avoid 
the  policy,  whether  they  are  actually  material  is  not  import- 
ant, as  parties  have  the  right  to  make  their  truth  the  basis 
of  the  contract.^ 

In  some  states  there  are  statutes  regulating  this  matter, 
and  providing  that  no  representations  or  untrue  statement 
in  an  application  for  a  policy  shall  effect  a  forfeiture,  unless 
it  pertains  to  matters  material  to  the  risk.     Such  statutes 

material  to  the  risk,  the  contract  is  not  avoided."  Aetna  Ins.  Co. 
v.  Grube,  6  Minn.  82  (Gil.  32);  Angell,  Ins.  §§  140-147;  Burritt  v. 
Saratoga  County  Mut.  Fire  Ins.  Co.,  5  Hill  (N.  Y.),  188. 

=*  Aetna  Life  Ins.  Co.  v.  France,  91  U.  S.  510;  Cuthbertson  v.  North 
Carolina  Home  Ins.  Co.,  96  N.  C.  481;  Cushman  v.  United  States 
Life  Ins.  Co.,  63  N.  Y.  404;  Cobb  v.  Covenant  Mut.  Ben.  Ass'n,  153 
Mass.  176;  McGowan  v.  Supreme  Court,  I.  O.  of  F.,  104  Wis.  173,  80 
N.  W.  603;  Voss  v.  Eagle  L.  &  H.  Ins.  Co.,  6  Cush.  (Mass.)  42.  The 
purpose  in  requiring  a  warranty  is  to  dispense  with  inquiry,  and 
cast  entirely  upon  the  assured  the  obligation  that  the  facts  shall 
be  as  represented.    State  Mut.  Fire  Ins.  Co.  v.  Arthur,  30  Pa.  St.  315. 

Materiality  of  warranty  a  question  of  law:  Patten  v.  Farmers' 
Mut.  Fire  Ins.  Co.,  38  N.  H.  338;  Hutchins  v.  Cleveland  Mut.  Ins. 
Co.,  11  Ohio  St.  477;  Shoemaker  v.  Glens  Falls  Ins.  Co.,  60  Barb. 
(N.  Y.)   84. 


NATUKE    AND    DEFINITIONS.  323 

control  the  rights  of  parties  to  make  contracts  within  their 
respective  states,  and  cannot  be  overthrown  hj  a  provision  in 
a  policy  that  all  representations  shall  be  deemed  warranties, 
and  shall  avoid  the  policy  if  untrue,  irrespective  of  their 
materiality.^  Technical  warranties,  as  well  as  representa- 
tions, although  refei-red  to  in  the  policy  as  part  of  the  contract, 
are  included  in  the  provisions  of  a  statute  which  provides  that 
misrepresentations  in  the  negotiations  of  a  contract  shall 
not  be  deemed  material  unless  made  with  actual  intent  to  de- 
ceive, or  unless  the  matter  misrepresented  increases  the  risk.^ 

Sam^e  —  Kinds. 

Warranties  may  be  express,  as  where  they  appear  upon  the 
face  of  the  contract ;  or  implied  from  the  very  nature  of  the 
contract  itself,  as,  in  marine  insurance,  concerning  the  sea- 
worthiness of  the  ship  insured,  or  in  fire  insurance,  concern- 
ing the  existence  of  the  subject  matter  of  the  risk,  or  in  life 
insurance,  concerning  the  life  of  the  party  insured ;  or  affirm- 
ative, as  where  the  assured  expressly  affirms  the  existence  of 
certain  facts  at  the  time  of  the  making  the  application;  or 
promissory,  as  where  the  assured  undertakes  to  perform  some 
executory  stipulation,  as  that  certain  things  shall  be  done, 
or  certain  conditions  will  continue  to  exist. 

If  a  warranty  be  express  or  affirmative  it  must  be  liter- 
ally and  absolutely  true ;  if  promissory  it  must  be  strictly  per- 
formed. There  may  be  several  warranties,  and  of  each  class, 
in  one  policy.^ 

'Fidelity  Mut.  Life  Ass'n  v.  Ficklin.  74  Md.  185;  Penn  Mut.  Life 
Ins.  Co.  V.  Mechanics'  Sav.  Bank  &  Trust  Co.,  37  U.  S.  App.  692,  43 
U.  S.  App.  75,  72  Fed.  413,  73  Fed.  653. 

'White  V.  Provident  Sav.  Life  Assur.  Soc,  163  Mass.  108,  27 
L.  R.  A.  398. 

'Stout  V.  City  Fire  Ins.  Co.,  12  Iowa,  371,  79  Am.  Dec.  539;  Jen- 
nings V,  Chenango  County  Mut.  Ins.  Co.,  2  Denio  (N.  Y.),  75;  Copp 


324  warranties  and  kepresentations.  §  13^ 

What  are  Warranties. 

§  139.  Whether  an  assertion  or  stipulation  is  a  warranty  or 
representation  is  a  question  of  law.  Warranties  will  not  be 
created  nor  extended  by  construction.  They  must  arise  from 
the  fair  interpretation  and  clear  intendment  of  the  language 
used.  The  application  is  in  itself  merely  collateral  to  the  con- 
tract of  insurance,  and  its  statements  are  to  be  classified  as  rep- 
resentations unless  by  force  of  a  reference  in  the  policy  they 
are  converted  into  warranties,  and  the  purpose  is  clearly  mani- 
fested from  the  papers  thus  connected  that  the  whole  shall 
form  one  entire  contract. 

The  general  rule  in  insurance  is  that  a  warranty  must  ap- 
pear on  the  face  of  the  policy,  and  no  statements  or  declara- 
tions or  representations  are  regarded  as  warranties  unless 
clearly  stipulated  to  he  such.  If  a  doubt  exists  as  to  whethej- 
a  statement  is  a  warranty  or  a  representation,  it  will  be  held 
a  representation.  In  construing  the  contract  for  the  purpose 
of  determining  whether  the  statements  were  intended  by  the 
parties  thereto  to  be  warranties  or  representations,  the  court 
will  take  into  consideration  the  situation  of  the  parties,  the 
subject  matter  of  the  contract,  and  the  language  employed, 
and  will  construe  a  statement  made  to  be  a  warranty  only 
when  it  clearly  appears  that  such  i&  the  expressed  intention 
of  the  contracting  parties. 

Among  the  settled  rules  for  the  construction  of  policies  of 
insurance,  are  these:  1.  That  all  the  conditions  and  obliga- 
tions of  the  contract  will  be  construed  liberally  in  favor  of 
the  assured,  and  strictly  against  the  insurer.  2.  That  the 
clearest  and  most  unequivocal  language  is  necessary  to  create 
a  warranty,  and  all  statements  of  doubtful  meaning  will  be 
construed  as  representations  merely.  3.  That  even  though 
the  warranty  and  any  matter  or  fact  be  declared  by  the  policy, 
its  effect  may  be  modified  by  other  portions  of  the  policy,  or  of 
the  application,  including  questions  and  answers,  so  that  the 


§  139  WHAT    AKE    WARRANTIES.  325 

answers  to  questions  not  material  to  tlic  risk  may  be  con- 
strued as  warranting  only  their  honesty  and  good  f  aith.^ 

But  technical  words  or  forms  of  expression  are  not  es- 
sential to  the  creation  of  a  warranty.  Words  of  affirmation, 
or  statements  on  the  part  of  the  insured,  contained  in  his 
application,  and  relating  to  the  risk,  or  affecting  its  character 
and  extent,  upon  the  strength  of  which  it  must  be  inferred 
the  insurer  contracted,  will  ordinarily  be  construed  as  a 
Avarranty.'^ 

V.  German  American  Ins.  Co.,  51  Wis.  637;  Duncan  v.  Sun  Fire  Ins. 
Co.,  6  Wend.  (N.  Y.)   48S;  post,  notes  36--44. 

''Wilkinson  v.  Connecticut  Mut.  Life  Ins,  Co..  30  Iowa,  119; 
Campbell  v.  New  England  Mut.  Life  Ins.  Co.,  98  Mass.  381;  Ken- 
tucky &  L.  Mut.  Ins.  Co.  V.  Southard,  8  B.  Mon.  (Ky.)  634;  Daniels 
V.  Hudson  River  Fire  Ins.  Co.,  12  Cush.  (Mass.)  416;  First  Nat. 
Bank  of  Kansas  City  v.  Hartford  Fire  Ins.  Co.,  95  U.  S.  673;  Ala- 
bama Gold  Life  Ins.  Co.  v.  Johnston,  80  Ala.  467;  Dwight  v.  Ger- 
mania  Life  Ins.  Co.,  103  N.  Y.  341;  Penn  Mut.  Life  Ins.  Co.  v.  Wiler, 
100  Ind.  92. 

The  words  "no  fire  in  and  about  the  building,  except  one  under 
kettle,  securely  imbedded  (in  masonry)  and  used  for  heat,"  are  not 
a  warranty,  and  only  affirm  the  condition  of  the  premises  at  the 
time  the  insurance  was  effected.  Schmidt  v.  Peoria  M.  &  F.  Ins. 
Co.,  41  111.  295.  And  a  statement  that  wooden  casks  in  the  building 
will  be  kept  filled  constantly,  is  not  a  warranty  against  the  negli- 
gence of  the  servants  of  the  assured  to  obey  his  orders  in  that  re- 
spect. DanielR  v.  Hudson  River  Fire  Ins.  Co.,  12  Cush.  (Mass.)  416. 
See,  also,  Gerhauser  v.  North  British  &  M.  Ins.  Co.,  7  Nev.  174.  A 
breach  of  warranty  does  not  occur  upon  the  failure  of  the  insured 
to  drop  other  insurance  according  to  the  stipulations  of  his  appli- 
cation. Commercial  Mut.  Ace.  Co.  v.  Bates.  176  111.  194,  52  N.  E.  49. 
A  warranty  that  smoking  is  not  allowed  on  the  premises  is  not 
broken  by  the  assured  or  others  afterwards  smoking  there,  if  smok- 
ing on  the  premises  was  forbidden  at  the  time  of  the  making  of  the 
warranty.  Hosford  v.  Germania  Fire  Ins.  Co.,  127  U.  S.  399.  See, 
also,  Hale  v.  Life  Ind.  &  Inv.  Co.,  65  Minn.  548;  Aetna  Ins.  Co.  v. 
Norman,  12  Ind  App.  652,  40  N.  E.  1116,  24  Ins.  L.  J.  611;  Moulor 
V.  American  Life  Ins.  Co.,  Ill  U.  S.  335;  First  Nat.  Bank  of  Kansas 
City  V.  Hartford  Fire  Ins.  Co.,  95  '  U.  S.  673;  Fitch  v.  American 
Popular  Life  Ins.  Co.,  59  N.  Y.  557;  Hoose  v.  Prescott  Ins.  Co.,  84 
Mich.  309,  47  N.  W.  587. 

'Texas  Banking  &  Ins.  Co,  v.  Stone,  49  Tex.  4;  post,  notes  36-44. 


326  WARRANTIES    AND    KEPRESENTATIONS.  §  130 

When  the  Application  and  Other  Papers  are  Part  of  the  Con- 
tract. 

As  we  have  "before  seen,  a  warranty  must  be  contained  in 
the  final  contract  of  the  parties.  It  is  considered  to  be  on 
the  face  of  the  policy  although  it  may  be  written  in  the  mar- 
gin, or  transversely,  or  in  a  subjoined  paper  referred  to  in 
the  policy.  The  contract  may  by  proper  words  adopt  and 
make  a  part  of  it  any  other  writing  or  paper.  But  in  order 
that  they  may  form  a  part  of  the  contract  the  policy  must  not 
only  refer  to,  but  must  in  express  terms,  or  by  necessary  im- 
plication, adopt  such  other  writing  or  paper  as  a  part  of 
itself,  and  a  mere  reference  thereto,  without  special  or  neces- 
sary inclusion,  does  not  make  such  writing  or  paper  referred 
to  a  part  of  the  policy  or  contract  itself,  nor  the  statements 
therein  warranties. 

Statements  contained  in  an  application  are  of  themselves 
mere  representations,  and  in  order  that  they  may  have  the 
force  and  effect  of  warranties  they  must  not  only  be  made  a 
part  of  the  contract,  but  it  must  appear  upon  an  examination 
of  the  entire  contract  that  they  were  deemed  conditions  upon 
the  literal  truth  or  fulfillment  of  which  the  validity  of  the 
insurance  was  intended  to  rest.  To  give  the  effect  of  a  war- 
ranty to  an  application  referred  to  in  the  policy,  it  should  be 
referred  to  in  such  a  manner  as  to  show  that  it  was  intended 
by  the  parties  that  it  should  have  such  effect.^  But  if  the 
policy  provides  that  the  application  shall  constitute  a  part  of 
the  contract,  statements  which  otherwise  would  be  mere  rep- 
resentations may  be  converted   into  warranties.^     The  at- 

« Equitable  Life  Ins.  Co.  v.  Hazlewood.  75  Tex.  338,  7  L.  H.  A.  217; 
Vivar  v.  Supreme  Lodge,  K.  of  P.,  52  N.  J.  Law,  455;  Farmers'  In- 
surance &  Loan  Co.  v.  Snyder,  16  Wend.  (N.  Y.)  481;  Rogers  v. 
Phenix  Ins.  Co.,  121  Ind.  570;  Kratzenstein  v.  Western  Assur.  Co.. 
116  N.  Y.  54,  5  L.  R.  A.  799;  ante,  §  52. 

"Smith  V.  Empire  Ins.  Co.,  25  Barb.  (N.  Y.)   497;  Kelsey  v.  Uni- 


§  139  WnAT    A.EE   WAKKANTIES.  327 

tacLing  of  an  application  to  the  back  of  a  policy  with  muci- 
lage, is  an  indorsement  of  the  application  upon  the  policy, 
within  the  provisions  of  the  policy  that  the  insured  is  ac- 
cepted in  consideration  of  the  warranties  contained  in  the 
application  indorsed  on  the  policy.  ^° 

Sometimes  the  application  is  by  statute  required  to  be  an- 
nexed to  or  contained  in  the  policy. -^-^  The  mere  statement  in 
the  application  that  it  is  to  become  a  part  of  the  policy,  is  not 
alone  always  held  sufficient  to  make  it  a  part  of  the  contract.-'^ 

versal  Life  Ins.  Co.,  35  Conn.  225;  Cerys  v.  State  Ins.  Co.,  71  Iowa, 
338,  72  N.  W.  849.  27  Ins.  Law  J.  258.  i 

"  Reynolds  v.  Atlas  Ace.  Ins.  Co.,  69  Minn.  93,  71  N.  W.  831.  See, 
also,  as  to  when  an  application  is  a  part  of  the  contract,  Bartlett 
V.  Fireman's  Fund  Ins.  Co.,  77  Iowa,  155,  41  N.  W.'601;  Cronin  v. 
Fire  Ass'n  of  Philadelphia,  123  Mich.  277,  82  N.  W.  45;  Boyle  v. 
Northwestern  Mut.  Relief  Ass'n,  95  Wis.  312,  70  N.  W.  351;  Aloe 
V.  Mutual  Reserve  Life  Ass'n,  147  Mo.  561,  49  S.  W.  553;  Brady 
V.  United  Life  Ins.  Ass'n  (C.  C.  A.),  60  Fed.  727;  American  Ins.  Co. 
V.  Gilbert,  27  Mich.  429;  Cox  v.  Aetna  Ins.  Co.,  29  Ind.  586;  King 
Brick  Mfg.  Co.  v.  Phcenix  Ins.  Co.,  164  Mass.  291.  41  N.  E.  277. 

Survey:  A  general  reference  to  the  description  of  the  insured 
property  on  file  in  the  office  of  the  insurers  does  not  make  it  a 
part  of  the  contract.  Stebhins  v.  Globe  Ins.  Co.,  2  Hall  (N.  Y.), 
675.  It  must  appear  that  it  was  the  intention  and  agreement  of  the 
parties  to  have  other  papers  considered  a  part  of  the  contract,  be- 
fore they  will  be  held  to  be  such.  Le  Roy  v.  Park  Fire  Ins.  Co.,  39 
N.  Y.  56;  Kentucky  &  L.  Mut.  Ins.  Co.  v.  Southard.  8  B.  Mon.  (Ky.) 
634;  Jennings  v.  Chenango  County  Mut.  Ins.  Co.,  2  Denio  (N.  Y.) 
75,  And  a  survey  or  diagram  will  only  bind  the  applicant  when  it 
appears  that  it  was  prepared  by  him  or  under  his  direction,  or  that 
he  assented  to  it  prior  to  the  consummation  of  the  contract.  Vilas 
V.  New  York  Cent.  Ins.  Co.,  72  N.  Y.  590;  Le  Roy  v.  Park  Fire  Ins. 
Co.,  supra;  Denny  v.  Conway  S.  &  M.  Fire  Ins.  Co.,  13  Gray  (Mass.), 
492;  Lycoming  Fire  Ins.  Co.  v.  Jackson,  83  111.  302. 

"Mullaney  v.  National  F.  &  M.  Ins.  Co.,  118  Mass.  393;  Johnson 
V.  Scottish  U.  &  N.  Ins.  Co.,  93  Wis.  223,  67  N.  W.  416;  Goodwin  v. 
Provident  Sav.  Life  Assur.  Ass'n,  97  Iowa.  226,  66  N.  W.  157,  32 
L.  R.  A.  473. 

"  Owens  V.  Holland  Purchase  Ins.  Co.,  56  N.  Y.  565. 

Application  not  part  of  policy:  A  stipulation  in  an  application 
that  the  statements  made  therein  shall  be  the  basis  of  a  contract  of 


328  WARRANTIES   AND   KEPKE3ENTATI0NS.  §  139 

Construction  of  Application  and  "Warranties. 

A  statement  hj  an  aj)plicant  that  all  the  statements  and 
answers  made  by  him  in  his  application  are  warranted  by  him 
to  be  tmie,  is  not  a  warranty  that  the  answers  given  are  full 
and  complete,  but  only  that  the  answers  as  given  are  true. 
The  applicant  is  bound  to  answer  correctly  and  truthfully 
only  in  so  far  as  he  undertakes  to  answer,  and  his  warranty 
canuot  be  extended  beyond  the  answers  actually  given.  If 
a  question  is  not  answered  there  is  no  warranty,  and  if  only 
partially  answered  the  warranty  cannot  be  extended  beyond 
the  answer,  for  it  can  only  be  predicated  on  the  affirmation 
of  something  not  true.*^  A  question  to  which  no  answer  is 
given  raises  no  inference  for  or  against  the  person  signing  the 
application.  The  situation  is  the  same  as  if  the  question 
had  not  been  asked. ^* 

The  distinction  between  an  answer  apparently  complete, 
but  in  fact  incomplete,  and  therefore  untrue,  and  an  answer 
manifestly  incomplete,  and  as  such  accepted  by  the  insurer, 
may  be  illustrated  by  two  cases  of  fire  insurance,  which  are 
governed  by  the  same  rules  in  this  respect  as  cases  of  life 
insurance.  If  one  applying  for  insurance  upon  a  building 
against  fire,  is  asked  whether  the  property  is  encumbered, 
and  for  what  amount,  and  in  his  answer  discloses  only  one 
mortgage  when  in  fact  there  are  two,  the  policy  issued  thereon 

insurance,  and  that  the  insured  warrants  the  same  to  be  true,  doea 
not  necessarily  make  the  warranties  a  part  of  the  policy.  Boehni  v. 
Commercial  Alliance  Life  Ins.  Co.,  9  Misc.  Rep.  529,  30  N.  Y.  Supp. 
660;  Northwestern  Mut.  Life  Ins.  Co.  v.  Woods,  54  Kan.  663;  Missouri, 
K.  &  T.  Trust  Co.  v.  German  Nat.  Bank  of  Denver  (C.  C.  A.),  77 
Fed.  117;  Conover  v.  Massachusetts  Mut. 'Life  Ins.  Co.,  3  Dill.  217, 
Fed.  Cas.  No.  3,121;  Presbyterian  Mut.  Assur.  Fund  v.  Allen,  106 
Ind.  593. 

"Dilleber  v.  Home  Life  Ins.  Co.,  69  N.  Y.  256;  Hale  v.  Life  Ind. 
&  Inv.  Co.,  65  Minn.  557.    See  ante,  note  6. 

"  Briesenmeister  v.  Supreme  Lodge,  K.  of  P.,  81  Mich.  525,  45 
N.  W.  977. 


§  139  WHAT    AEE    WARRANTIES.  329 

is  avoiclc(],  if  the  answer  is  warranted.  But  if  to  the  same 
(luestion  he  merely  answers  that  the  property  is  encumbered, 
without  stating  the  amount  of  the  encumbrances,  the  issuing 
of  the  policy  without  further  inquiry  is  a  waiver  of  the  omis- 
sion to  state  the  amount. ^^  Statements  contained  in  an  ap- 
plication made  by  the  agent  of  the  insurer  from  facts  within 
]]is  own  knowledge,  are  not  binding  upon  the  insured. ^° 

In  Ecdman  v.  Hartford  Fire  Ins.  Co.,^^  the  application  re- 
cited "that  the  applicant  covenants  and  agrees  with  the  com- 
pany Hhat  the  foregoing  is  a  just,  full  and  true  exposition 
of  all  the  facts  and  circumstances  in  regard  to  the  condition, 
■situation,  value  and  risk  of  the  property  to  be  insured,  so 
far  as  the  same  are  known  to  the  applicant  and  are  material 
to  the  risk,  and  the  same  is  hereby  made  a  condition  of  the 
insurance,  and  a  warranty  on  the  part  of  the  assured.'  The 
l>olicy  provides  that  the  application  'shall  be  considered  a 
part  of  this  policy,  and  a  warranty  by  the  assured.'  "  Held, 
that  this  last  stipulation  means  such  a  warranty  as  is  stipu- 
lated in  the  application ;  that  the  clause  "so  far  as  are  known 
to  the  applicant"  is  not  an  additional  stipulation  that  all  the 
facts  have  been  stated  known  to  be  material  to  the  risk, 
though  not  called  for  by  the  question,  but  it  qualifies  the  pre- 
ceding clause,  changing  it  from  an  absolute  covenant  that 
the  answers  are  true,  to  one  that  they  are  true  so  far  ns 
known. 

"Nichols  V.  Fayette  Mut.  Fire  Ins.  Co.,  1  Allen  (Mass.),  63; 
Towne  v.  Fitchburg  Mut.  Fire  Ins.  Co.,  7  Allen  (Mass.),  51;  Con- 
necticut Mut.  Life  Ills.  Co.  V.  Luchs,  108  U.  S.  498;  Lebanon  Mut.' 
Ins.  Co.  V.  Kepler,  106  Pa.  St.  28;  Dolliver  v.  St.  Joseph  F  &  M 
Ins.  Co..  128  Mass.  315. 

'"  Thomas  v.  Hartford  Fire  Ins.  Co.,  20  Mo.  App.  150. 

"47  Wis.  89.  See,  further,  as  to  incomplete  or  imperfect  answers, 
Carson  v.  Jersey  City  Ins.  Co.,  43  N.  J.  Law,  300.  44  N.  J.  Law,  210; 
Merchants'  &  Mechanics'  Ins.  Co.  v.  Schroeder,  18  Bradw.  '(111.) 
216;    Phoenix  Life  Ins.  Co.  v.  Raddin,   120  U.   S.   183;  .Johnston  v. 


330  WARRANTIES    AND    REPRESENTATIONS.  §  139 

ILLUSTRATIONS  OF  WARRANTIES. 

I.  Fire  Insurance. 
Title. 

A  warranty  as  to  the  condition  and  extent  of  tlie  title  of  the 
insured  to  the  subject  matter  of  the  risk  must  he  strictly  com- 
l>lied  with.  A  warranty  that  the  house  containing  the  insured 
property  belongs  to  the  applicant  in  fee,  and  free  from  all 
liens,  is  broken  if  the  house  stands  on  leased  ground. ^^  And 
a  stipulation  in  the  policy  whereby  the  insured  covenants  that 
he  is  the  sole  owner  of  the-property  insured,  is  a  warranty;^'* 
and  so  where  the  statement  is  made  that  the  insurance  is  on 
'^her  two-story  metal  roof  building,"  referring  to  the  proj)erty 
covered,  and  the  interest  of  the  insured  in  it.^'^  But  an 
agreement  that  the  policy  shall  be  void  if  the  insured  is  not 
the  sole  and  unconditional  owner  does  not  void  the  policy,  if 
he  has  described  his  actual  interest.^^  A  covenant  that  title 
is  held  under  warrarxty  deed  does  not  warrant  a  title  in  fee.^^ 
It  has  been  held  that  one  does  in  effect  not  warrant  himself  to 
be  the  sole  and  unconditional  owner  of  property,  by  accepting 
a  policy  conditioned  to  be  void  if  he  is  not  such  owner  ;-^  but 
this  would  seem  to  be  in  direct  violation  of  a  w^ell  established 
rule  of  law,  wliich  will  not  permit  an  insured  to  assert  a  right 
under  those  portions  of  the  policy  which  are  advantageous  to 
him,  and  repudiate  the  portions  which  are  disadvantageous. 

A  warranty  of  sole  and  undisputed  ownership  is  not  broken 

Northwestern  Live  Stock  Ins.  Co.,  94  Wis.  117,  68  N.  W.  868;  Com- 
mercial Mut.  Ace.  Co.  V.  Bates,  176  111.  194. 

"Cuthbertson  v.  North  Carolina  Home  Ins.  Co.,  96  N.  C.  480;  East 
Texas  Fire  Ins.  Co.  v.  Brown,  82  Tex.  631. 

'"Western  Assiir.  Co.  v,  Altheimer,  58  Ark.  565. 

-"  Breedlove  v.  Norwich  Union  Fire  Ins.  Co.,  124  Cal.  164. 

"  Hoose  V.  Prescott  Ins.  Co.,  84  Mich.  309,  11  L.  R.  A.  340. 

-'Rockford  Ins.  Co.  v.  Nelson,  65  111.  415;  Merrill  v.  Agricultural 
Ins.  Co.,  73  N.  Y.  452. 

=' Manchester  Fire  Assur.  Co.  v,  Ahrams  (C.  C.  A.),  89  Fed.  932. 


§  139  ILLUSTRATIONS   OF   WARRANTIES.  331 

by  tko  i:)endency  of  an  action  bj  a  judgment  creditor  of  a 
former  owner  to  subject  the  property  to  the  payment  of  his 
judgment. ^^  A  warranty  that  the  L^nd  on  which  an  insured 
building  is  situated  is  held  in  fee  simple,  is  not  broken  Ix^cause 
of  the  existence  of  an  agreement  between  the  insured  and  the 
owaier  of  the  adjoining  premises,  giving  the  latter  the  right 
to  use  one  of  the  walls  of  the  insured  building  as  a  party  wall 
if  this  condition  existed  when  the  insurance  was  effected,  and 
was  known  to  the  insurer. ^^  The  existence  of  a  mortgage 
upon  the  property  insured  is  not  a  breach  of  a  warranty  that 
the  mortgagor  is  the  unconditional  and  sole  o"wner.^^  A  war- 
ranty that  the  applicant  is  the  sole  and  undisputed  owner  of 
the  property  insured,  and  that  the  title  thereto  was  in  his 
name,  is  not  broken  by  the  fact  that  the  insured  held  a  con- 
tract with  the  owners  of  the  legal  title,  for  a  conveyance  of  the 
property,  and  was  in  possession  of  the  property  under  that 
contract,  and  had  fully  performed  all  of  the  conditions  of  the 
contract,  up  to  the  time  of  making  the  application;^'''  nor  by 
the  fact  that  the  insured  had  leased  the  property  insured 
under  a  conditional  contract  of  sale,  reserving  title  in  himself 
until  full  payment  should  be  made.^^  A  warranty  of  owner- 
ship in  the  insured  relates  to  the  time  of  the  issuing  of  the 
policy,  and  is  not  continuing. ^^  A  warranty  of  unconditional 
and  sole  O'wnership  is  not  fulfilled  if  the  insurer  has  only  a 
bond  for  the  title,  and  the  vendor  retains  a  lien  for  the  pur- 

"  Lang  V.  Hawkeye  Ins.  Co.,  74  Iowa,  673,  39  N.  W.  86. 

"Commercial  Fire  Ins.  Co.  v.  Allen,  80  Ala.  571;  Des  Moines  Ice 
Co.  V.  Niagara  Fire  Ins.  Co.,  99  Iowa,  193,  68  N.  W.  600. 

^''Morotock  Ins.  Co.  v.  Rodefer,  92  Va.  747;  Vankirk  v.  Citizens' 
Ins.  Co..  79  Wis.  627,  48  N.  W.  798. 

"Baker  v.  State  Ins.  Co.,  31  Or.  41;  Imperial  Fire  Ins.  Co.  v. 
Dunham,  117  Pa.  St.  460. 

='Burson  v.  Fire  Ass'n  of  Philadelphia,  136  Pa.  St.  267;  Walter  v. 
Sun  Fire  Office,  165  Pa.  St.  381,  30  Atl.  945. 

'"  Collins  V.  London  Assur.  Corp.,  165  Pa.  St.  298,  30  Atl.  924. 


332  WARKANTIES    AND    EEPKESENTATI0N8.  §  139 

chase  money  f^  nor  if  the  insured  holds  title  dependent  upon 
any  conditions.^^ 

Iron-Safe  Clause. 

A  provision  of  a  contract  requiring  the  insured  to  keep  a 
set  of  books,  and  an  inventory  of  stock  securely  in  an  iron  safe, 
is  valid,  and  non-compliance  with  it  will  defeat  the  policy, 
unless,  with  knowledge  of  the  forfeiture,  the  company  waives 
it.  An  agreement  and  warranty  of  the  insured  to  this  effect, 
if  pasted  upon  the  policy,  is  a  part  of  the  contract,  and  must 
be  fulfilled.^ ^  Such  provisions  are  reasonably  construed^  and 
only  require  the  insured  to  keep  in  his  books  an  intelligent 
record  of  his  business  transactions.^^  The  policy  is  not 
voided  by  an  accidental  omission  to  place  the  daily  cash  sales 
book  in  the  safe,  where  the  book  is  not  material  in  ascer- 
taining a  satisfactory  record  of  the  business;"^  nor  by  an 

^  Liberty  Ins.  Co.  v.  Bouklen.  96  Ala.  508. 

^^  Dwelling  House  Ins.  Co.  v.  Dowdall,  49  111.  App.  33.  See,  also, 
for  further  illustrations  of  breach  of  warranty  of  title,  Hamilton  v. 
Dwelling  House  Ins.  Co..  98  Mich.  535;  Collins  v.  St.  Paul  F.  &  M. 
Ins.  Co.,  44  Minn.  440;  Mt.  Leonard  Milling  Co.  v.  Liverpool  &  L.  & 
O.  Ins.  Co.,  25  Mo.  App.  259;  Holloway  v.  Dwelling  House  Ins.  Co., 
448  Mo.  App.  1;  Bennett  v.  Agiicultural  Ins.  Co.,  50  Conn.  420;  Mott 
V.  Citizens'  Ins.  Co.,  69  Hun  (N.  Y.),  501;  Syndicate  Ins.  Co.  v. 
Bohn  (C.  C.  A.),  65  Fed.  165;  McWilliams  v.  Cascade  F.  &  M.  Ins. 
Co.,  7  Wash.  48,  34  Pac.  140;  Ereedlove  v.  Norwich  Union  Fire 
Ins.  Co.,  124  Cal.  164;  Kibbe  v.  Hamilton  Mut.  Ins.  Co.,  11  Gray 
(Mass.),  163;  McCulloch  v.  Norwood.  58  N.  Y.  562. 

^-  Kelley-Goodfellow  Shoe  Co.  v.  Liberty  Ins.  Co.,  8  Tex.  Civ.  App. 
227,  28  S.  W.  1027;  City  Drug  Store  v.  Scottish  U.  &  N.  Ins.  Co. 
(Tex.  Civ.  App.),  44  S.  W.  21.  Compare  Mechanics'  &  Traders'  Ins. 
Co.  v.  Floyd  (Ky.),  49  S.  W.  543. 

^'Spratt  v.  New  Orleans  Ins.  Ass'n,  53  Ark.  215,  13  S.  W.  799; 
Pelican  Ins.  Co.  v.  Wilkerson,  53  Ark.  353,  13  S.  W.  1103;  Ameri- 
can Cent.  Ins.  Co.  v.  Ware,  65  Ark.  336,  46  S.  W.  129,  27  Ins.  Law  J. 
785;  Roberts,  Willis  &  Taylor  Co.  v.  Sun  Mut.  Ins.  Co.,  19  Tex.  Civ. 
App.  338,  48  S.  W.  559. 

"Western  Assur.  Co.  v.  Redding  (C.  C.  A.),  68  Fed.  708. 


§  139  ILLCSTKATIONS    OF    WAKKANTIES.  33S 

insured  removing  the  books  from  the  safe  when  the  building- 
is  throated  by  fire,  though  in  so  doing  he  lost  a  portion  of 
them.^^ 

Keeping  Watchman. 

A  wan'anty  that  a  watchman  will  be  employed  in  and  about 
the  premises  day  and  night,  is  broken  if  there  be  but  one 
watchman,  who  sleeps  at  night  three  hundred  feet  away  from 
the  insured  premises  f^  or  if  he  only  visits  the  premises.two  or 
three  times  a  night.^'^  An  agreement  to  maintain  a  good 
watch,  means  a  suitable  and  proper  watch  under  all  the  cir- 
cumstances.^^ A  warranty  that  a  watchman  shall  be  em- 
ployed about  the  premises  day  and  night  while  the  property 
remains  idle  is  complied  with,  as  to  the  day  time,  when  the 
fireman  of  another  mill,  450  feet  distant,  belonging  to  the 
insured,  and  the  man  under  him,  keep  watch  over  it.^^  A 
temporary  absence  of  a  watchman  on  matters  connected  with 
his  employment,  is  not  a  breach  of  the  warranty,  unless  the 
loss  occurs  during  his  absence  ;^*^  and  his  temporary  absence 
does  not  relieve  the  company  from  liability  if  the  fire  was  not 
due  to  his  absence.  ^^ 

*' Liverpool  &  L.  &  G.  Ins.  Co.  v.  Kearney  (Indian  T.),  46  S.  W. 
414,  27  Ins.  Law  J.  873.  See,  also,  on  construction  of  "iron  safe" 
clause,  Scottish  U.  &  N.  Ins.  Co.  v.  Stubbs,  98  Ga.  754;  Goldman  v. 
North  British  Mercantile  Ins.  Co.,  48  La.  Ann.  223;  Virginia  F.  & 
M.  Ins.  Co.  V.  Morgan,  90  Va.  290,  18  S.  E.  191. 

''Rankin  v.  Amazon  Ins.  Co.,  89  Cal.  203. 

"McKenzie  v.  Scottish  U.  &  N.  Ins.  Co.,  112  Cal.  548;  First  Nat. 
Bank  V.  North  America  Ins.  Co.,  50  N.  Y.  45. 

'' Parker  v.  Bridgeport  Ins.  Co.,  10  Gray  (Mass.),  302. 

"Spies  V.  Greenwich  Ins.  Co.,  97  Mich.  310,  56  N.  W.  560;  McGan- 
non  V.  Michigan  Millers'  Mut.  Fire  Ins.  Co.,  87  N.  W.  61. 

^"Au  Sable  Lumber  Co.  v.  Detroit  Manufacturers'  Fire  Ins.  Co., 
89  Mich.  407.  50  N.  W.  870. 

"  Hart  V.  Niagara  Fire  Ins.  Co.,  9  Wash.  620,  27  L.  R.  A.  86.  See, 
also,  Hanover  Fire  Ins.  Co.  v.  Gustin,  40  Neb.  828,  59  N.  W.  375; 
Phoenix  Assur.  Co.  v.  Coffman,  10  Tex.  Civ.  App.  631,  32  S.  W.  810; 


S3i  WARKANTIES    AND    KEPliESENTATIONS.  §  139 

Clear  Space. 

A  warranty  by  tlie  assured  that  a  contimious  clear  space 
for  a  certain  distance  shall  be  maintained  between  the  prop- 
erty insured,  and  any  other  property,  creates  a  warranty  in 
futwo,  and  it  is  of  no  consequence  that  the  defendant's  agent 
knew  that  it  was  not  fulfilled,  when  he  took  the  application.^- 
Such  a  covenant  is  of  the  very  essence  of  the  contract,  and  its 
breach,  unless  waived,  relieves  the  insurer. ^^  A  warranty  to 
keep  in  the  building  insured,  and  within  ten  feet  of  a  gin- 
stand,  a  barrel  full  of  water,  and  two  buckets,  requires  the  in- 
sured to  see  that  the  water  and  buckets  are  at  all  times  reason- 
ably accessible.^* 

Use  and  Occupation. 

Statements  concerning  the  condition  or  description,  or 
use  of  property  insured,  are  frequently  held  to  be  representa- 
tions merely,  and  will  be  held  warranties  only  when  such  an 

Bliimer  v.  Phcenix  Ins.  Co.,  48  Wis.  535;  Sheldon  v.  Hartford  Fire 
Ins.  Co.,  22  Conn.  235,  58  Am.  Dec.  420;  American  Fire  Ins.  Co.  v. 
Brigton  Cotton  Mfg.  Co.,  125  111.  131,  17  N.  E.  771;  Sierra  M.,  S. 
&  M.  Co.  V.  Hartford  Fire  Ins.  Co.,  76  Cal.  235;  Virginia  F.  &  M.  Ins. 
Co.  V.  Buck,  88  Va.  517. 

*^  Michigan  Shingle  Co.  v.  London  &  L.  Fire  Ins.  Co.,  91  Mich. 
441.  51  N.  W.  1111.  But  in  Michigan  Shingle  Co.  v.  State  Inv.  & 
Ins.  Co.,  94  Mich.  389,  53  N.  W.  945,  it  was  held  that  the  insurer 
was  estopped  from  avoiding  the  policy  for  deficiency  of  clear  space, 
where  its  agent,  when  he  wrote  the  policy,  knew  the  condition  of 
the  insured  property,  and  a  clear  space  for  the  stipulated  distance 
did  not  exist,  and  that  the  insured  could  not  control  a  clear  space 
for  that  distance,  and  the  agent  decided  that  the  existing  clear 
space  was  satisfactory,  and  fixed  the  rate  of  premium  accordingly, 
and,  after  knowledge  that  the  clear  space  was  not  maintained,  took 
no  steps  to  cancel  the  policy, — two  judges  dissenting. 

^  Jones  V.  Insurance  Co.  of  North  America,  90  Tenn.  604. 

"Mechanics'  Ins.  Co.  v.  Thompson,  57  Ark.  279,  21  S.  W.  468; 
Southern  Ins.  Co.  v.  White,  58  Ark.  277,  24  S.  W.  425.  Compare 
Masters  v.  Madison  County  Mut.  Ins.  Co.,  11  Barb.  (N.  Y.)  624, 
Brrleigh  v,  Gebhard  Fire  Ins.  Co.,  90  N.  Y.  220. 


§  139  ILLrSTKATIONS    OF    WAKKANTIES.  335 

effect  is  clearly  stipulated  for.  But  if  the  descriptive  state- 
ment be  a  substantive  part  of  tke  contract,  or  if  it  appears 
that  in  reliance  upon  the  statement  as  to  the  future  use  of 
the  property  the  insurance  was  effected. at  special  rates,  the 
statements  will  sometimes  be  held  warranties,  though  not  ex- 
pressly made  so.''^  Thus  a  statement  that  a  building  is  oc- 
cupied as  a  "dwelling  and  boarding  house"  has  been  held  to 
be  a  warranty  as  to  the  use  to  which  it  was  then  put.'*^  A 
warranty  that  premises  are  used  as  a  boarding  house  is  not 
broken  if  a  part  of  them  be  subsequently  used  as  a  bar-room 
and  billiard  room,  if  such  change  is  not  forbidden,-  and  if 
the  risk  be  not  increased. ^^  A  statement  in  a  policy  describ- 
ing the  property  insured  as  a  building  "while  occupied  by 
assured  as  a  store  and  dwelling  house,"  and  providing  that 
the  policy  shall  be  void  if  the  property  shall  become  vacant 
or  unoccupied,  is  not  a  warranty  as  to  the  future  use  or  oc- 
cupancy of  the  building. "^^ 

^'Wood  V.  Hartford  Fire  Ins.  Co.,  13  Conn.  533,  35  Am.  Dec.  92; 
Continental  Ins.  Co.  v.  Kasey,  25  Gratt.  (Va.)  268,  18  Am.  Rep.  681; 
Michigan  Shingle  Co.  v.  London  &  L.  Fire  Ins.  Co.,  91  Mich.  441,  51 
N.  W.  1111;  Fowler  v.  Aetna  Fire  Ins.  Co.,  6  Cow.  (N.  Y.)  673; 
United  States  F.  &  M.  Ins.  Co.  v.  Kimberly,  34  Md.  224;  Sarsfield 
V.  Metropolitan  Ins.  Co.,  61  Barb.  (N.  Y.)   479,  42  How.  Prac.  97. 

■^•Franklin  Fire  Ins.  Co.  v.  Martin,  40  N.  J.  Law,  568;  Hall  v. 
People's  Mut.  Fire  Co.,  6  Gray  (Mass.),  185. 

*' Martin  v.  State  Ins.  Co.,  44  N.  J.  Law,  485.  See,  also,  United 
States  F.  &  M.  Ins.  Co.  v.  Kimberly,  34  Md.  224.  6  Am.  Rep.  325; 
Wood  V.  Hartford  J  ire  Ins.  Co.,  13  Conn.  533,  35  Am.  Dec.  92;  Joyce 
V.  Maine  Ins.  Co.,  45  Me.  168;  Sillem  v.  Thornton,  3  El.  &  Bl.  868; 
Billings  V.  Tolland  County  Mut.  Fire  Ins.  Co.,  20  Conn.  139;  Hall 
V.  People's  Mut.  Fire  Ins.  Co.,  6  Gray  (Mass.),  187;  Wall  v.  East 
River  Mut.  Ins.  Co.,  7  N.  Y.  370. 

*' Burlington  Ins.  Co.  v.  Brockway,  138  111.  644,  28  N.  E.  799. 

"Incumbrances,  breach  of  warranty:"  State  Ins.  Co.  v.  Jordan,  24 
Neb.  358,  38  N.  W.  839;  Smith  v.  Agricultural  Ins.  Co.,  118  N.  Y. 
522;  Lang  v.  Hawkeye  Ins.  Co.,  74  Iowa,  673,  39  N.  W.  86;  Leonard 
v.  American  Ins.  Co.,  97  Ind.  299;  Bowman  v.  Franklin  Ins.  Co.^  40 
Md.  620;  Bidwell  v.  Northwestern  Ins.  Co..  19  N.  Y.  179. 


336  WAKKANTIES    AND    KEPEESEXTATIONS.  §  139" 

2.  Life  Insurance. 
Generally. 

Policies  of  life  insurance  are  nsnallv  issued  upon  written 
applications,  which  contain  numerous  questions  to  be  an- 
swered by  the  applicants.  If  the  policy  provides  that  the 
application  is  a  part  of  the  contract  and  that  the  answers  given 
are  warranties  the  breach  of  any  one  of  them  vitiates  the 
contract;  as,  a  mis-statement  of  age;^^  or  name;^^  or  occu- 
pation.^^ A  provision  in  a  life  insurance  policy  that  the  in- 
sured shall  not  be  connected  with  the  liquor  business  relates 
to  the  occupation  of  the  insured  subsequent  to  the  consumma- 
tion of  the  contract,  and  an  answer  in  an  application  (war- 
ranted to  be  tiiie)  that  the  applicant  was  a  grocer,  without 
stating  anything  more  in  relation  to  his  occupation,  while  it 
appeared  that  he  then  sold  liquor  at  retail  in  a  partition  por- 

Otlier  -warranties;  Bilbrough  v.  Metropolis  Ins.  Co.,  5  Duer 
(N.  Y.),  587  (as  to  time  factory  ran)  ;  Glens  Falls  Portland  Cement 
Co.  V.  Travellers'  Ins.  Co.,  11  App.  Div.  411,  42  N.  Y.  Supp.  285 
(warranty  that  insured  would  maintain  statutory  safeguards  on 
premises)  ;  Northrup  v.  Piza,  43  App.  Div.  284,  60  N.  Y.  Supp.  36.5 
(warranty  of  completion  of  party  wall);  Murdock  v.  Chenango 
County  Mut.  Ins.  Co.,  2  N.  Y.  210  (warranty  that  chimney  would 
be  built);  Grubbs  v.  Virginia  F.  &  M.'  Ins.  Co.,  110  N.  C.  108  (a 
statement  in  an  application  for  insurance  that  "the  clerk  sleeps  in 
the  store"  is  not  a  continuing  warranty  that  the  clerk  will  continue 
to  sleep  there) ;  City  of  Worcester  v.  Worcester  Mut.  Fire  Ins.  Co., 
9  Gray  (Mass.),  27  (warranty  concerning  removal  of  ashes);  Rose- 
bud M.  &  M.  Co.  V.  Western  Assur.  Co.  (U.  S.  Cir.  Ct.),  25  Ins.  Law 
J.  693  (breach  of  warranty  concerning  communication  of  fire,  and 
situation  of  machinery);  Waterbury  v.  Dakota  F.  &  M.  Ins.  Co.,  6 
Dak.  468,  43  N.  W.  697  (warranty  concerning  building  of  brick 
chimney). 

"  Hartford  Fire  Ins.  Co.  v.  Moore,  13  Tex.  Civ.  App.  644,  36  S.  W. 
146;  Butler  v.  Supreme  Council,  C.  B.  L.,  43  App.  Div.  531,  60 
N.  Y.  Supp.  70;  McCarthy  v.  Catholic  K.  &  L.  of  A.,  102  Tenn.  345, 
52  S.  W.  142;  United  Brethren  Mut.  Aid  Soc.  v.  White,  100  Pa.  St. 
12;  Swett  v.  Citizens'  Mut.  Relief  Soc,  78  Me.  543.  7  Atl.  394. 

"''  Quandt  v.  Grand  Lodge,  I.  G.  O.,  13  Nat.  Corp.  Rep.  614. 

"  Grattan  v.  Metropolitan  Life  Ins.  Co.,  80  N.  Y.  281. 


§  139  ILLUSTRATIONS    OF    WARRANTIES.  337 

tion  of  his  store,  will  not,  in  the  absence  of  proof  of  intent 
to  deceive,  avoid  the  policy.^ ^  The  insurer  is  entitled  to  an 
honest  and  full  answer  to  the  questions  asked  concerning  the 
occupation  of  the  applicant.  The  information  called  for  ia 
the  occupation  at  the  time  the  application  is  made,  and  the 
usual  rather  than  the  temporary  occupation.  If  the  answer 
given  and  warranted  is  not  true,  the  policy  is  avoided.^^ 

Suicide. 

A  warranty  that  the  insured  will  not  die  by  his  own  act, 
"whether  sane  or  insane,"  is  an  affirmative  and  a  continuing 
warranty  and  is  not  invalid  as  imposing  an  impossible  condi- 
tion by  attempting  to  control  the  act  of  the  insured  while  in- 
sane.^* 

Temperate. 

The  w'ord  "temperate"  as  used  in  an  application  for  insur- 
ance, means  moderation  in  the  use  of  intoxicating  liquors,  and 
does  not  imply  total  abstinence  from  their  use.  A  warranty 
that  the  insured  is  temperate  means  that  he  refrains  from  ex- 
cessive indulgence  in  the  use  of  intoxicants,  and  not  that  he 
never  uses  them.  A  warranty  that  the  applicant  has  never 
been  intemperate  is  not  broken  by  occasional  excessive  in- 

"  McGurk  V.  Metropolitan  Life  Ins.  Co.,  56  Conn.  528,  1  L.  R.  A. 
563. 

"United  Brethren  Mut.  Aid  Soc.  v.  White,  100  Pa.  St.  12;  Dwight 
V.  Germania  Life  Ins.  Co.,  103  N.  Y.  341;  Northwestern  Mut.  Life 
Ins.  Co.  V.  Amerman,  119  III.  329,  10  N;  E.  225;  Hart  v.  National 
Masonic  Ace.  Ass'n,  105  Iowa,  717,  75  N.  W.  508;  Triple  Link  Mut. 
Ind.  Ass'n  v.  Williams,  121  Ala.  138,  26  So.  19;  Stone's  Adm'rs  v. 
United  States  Casualty  Co.,  34  N.  J.  Law,  371;  Ford  v.  United  States 
Mut.  Ace.  Relief  Co.,  148  Mass.  153,  19  N.  E.  169;  Kenyon  v.  Knights 
Templar  &  M.  Mut.  Aid  Ass'n,  122  N.  Y.  247,  25  N.  E.  299. 

■•*Kelley  v.  Mutual  Life  Ins.  Co.,  75  Fed.  638. 

Walking  on  roadbed:  Traders'  &  Travellers'  Ace.  Co.  v.  Wagley 
(C.  C.  A.),  ?4  Fed.  457. 

KERR,  INS.—  23 


338  WAEKANTIES    AND    KEPKESENTATIONS.  §  139 

diligences,  but  a  continuous  and  daily  use  of  intoxicating 
drinks  is  not  necessary  to  constitute  intemperate  habits.^' 

Other  Insurance. 

A  question  of  great  importance  frequently  arises  in  con- 
sidering the  legal  effect  of  a  question  as  to  whether  the  appli- 
cant has  ever  had  his  life  insured  in  any  insurance  company, 
of  if  an  ai)plication  by  him  for  insurance  in  a  company  has 
ever  been  rejected,  or  if  he  has  applied  for  other  insurance. 
The  query  is  whether  the  term  "insurance  company"  includes 
mutual  and  fraternal  organizations,  and  whether  certificates 
issued  by  them  constitute  insurance  within  the  ordinary  and 
legal  acceptance  of  that  term.  The  weight  of  authority  on 
questions  of  construction  of  certificates  as  to  beneficiaries, 
forfeitures  and  the  like,  treats  fraternal  and  mutual  bene- 
fit societies  as  life  insurance  companies,  in  the  absence  of 
statutes  defijiing  them  not  to  be  insurance  companies,  al- 
though the  fact  that  the  by-laws  and  constitution  of  the  order 
usually  become  a  part  of  the  contract,  may  make  the  relation 
of  the  member  to  the  order  somewhat  different  from  that  of 
the  ordinary  relation  of  insurer  to  insured.  In  Penn  Mut. 
Life  Ins.  Co.  v.  Mechanics'  Savings  Bank  &  Trust  Co.,^*'  the 
rule  is  laid  down  that  certificates  in  mutual  aid  societies  do 
not  constitute  insurance  within  the  meaning  of  a  question  in 
an  application  blank  of  an  insurance  company  as  to  existing 

"Union  Mut.  Life  Ins.  Co.  v.  Reif,  36  Ohio  St.  596,  38  Am.  Rep. 
613;  Meacham  v.  New  York  State  Mut.  Ben.  Ass'n,  120  N.  Y.  237; 
Chambers  v.  Northwestern  Mut.  Life  Ins.  Co.,  64  Minn.  495,  58  Am. 
St.  Rep.  549;  Knecht  v.  Mutual  Life  Ins.  Co.,  90  Pa.  St.  118;  Mengel 
V.  Northwestern  Mut.  Life  Ins.  Co.,  176  Pa.  St.  280,  35  Atl.  197. 

=«37  U.  S.  App.  692,  43  U.  S.  App.  75,  72  Fed.  413,  38  L.  R.  A.  33; 
Northwestern  Masonic  Aid  Ass'n  v.  Jones,  154  Pa.  St.  99;  Theobald 
V.  Supreme  Lodge,  K.  of  P.,  59  Mo.  App.  87;  Sparks  v.  Knight 
Templars'  &  M.  Life  Ind.  Co.,  61  Mo.  App.  115;  Continental  Life 
Ins.  Co.  V.  Chamberlain,  132  U.  S.  304. 


§  139  ILLUSTKATIONS    OF    WARRANTIES.  339 

insurance  in  it  or  anotlier  company.  Judge  Taft  said:  "Hav- 
ing in  view  the  well-established  rule  that  insurance  contracts 
are  to  be  construed  against  those  who  frame  them,  *  *  * 
and  that  any  doubt  or  ambiguity  in  them  is  to  be  resolved  in 
favor  of  the  insured,  we  conclude  that  a  certificate  in  a 
mutual  benefit  and  social  society,  was  not  within  the  descrip- 
tion ^policy  of  life  insurance  in  any  other  company.'  We  are 
fortified  in  the  conclusion  by  the  fact  that  this  contract  is  a 
Pennsylvania  contract,  and  the  courts  of  that  state  have  uni- 
fonnly  held  that  mutual  aid  associations  and  insurance  com- 
panies are  so  clearly  to  be  distinguished  that  statutes  applying 
to  insurance  companies  and  their  policies  do  not  have  applica- 
tion to  mutual  aid  associations  and  the  certificates  of  life  in- 
surance which  they  issue  to  their  members."  But  in  other 
states  it  has  been  held  that  such  associations  are  within  the 
description  of  insurance  companies,  and  that  the  contracts 
they  make  are  properly  termed  policies,  as  that  term  is  ordi- 
narily used.^'^ 

Attending  Physician.  ». 

An  applicant  Avas  attended  by  a  physician  within  the  mean- 
ing of  the  question  in  an  application  for  life  insurance,  if  ho 
went  to  the  office  of  a  physician,  told  the  physician  that  he 

"State  V.  Nichols,  78  Iowa,  747;  Co-operative  Fire  Ins.  Order  v. 
Lewis,  12  Lea  (Tenn.),  136;  Presbyterian  Mut.  Assur.  Fund  v. 
Allen,  106  Ind.  594;  Com.  v.  Wetherbee,  105  Mass.  159;  Sherman 
■V.  Com.,  82  Ky.  102,  See,  also,  Bruce  v.  Connecticut  Mut.  Life  Ins. 
Co.,  74  Minn.  314;  Aloe  v.  Mutual  Reserve  Life  Ass'n,  147  Mo.  561, 
49  S.  W.  553;  Kelley  v.  Life  Insurance  Clearing  Co.,  113  Ala.  453. 
21  So.  361;  Silverman  v.  Empire  Life  Ins.  Co.,  24  Misc.  Rep.  399,  53 
N.  Y.  Supp.  407;  Commercial  Mut.  Ace.  Co.  v.  Bates,  74  111.  App. 
335;  Finch  v.  Modern  Woodmen  of  America,  113  Mich.  646,  71 
N.  W.  1104;  United  States  Life  Ins.  Co.  v.  Smith  (C.  C.  A.),  92  Fed. 
503;  Fidelity  Mut.  Life  Ass'n  v.  Miller  (C.  C.  A.),  92  Fed.  63; 
Tarpey  v.  Security  Trust  Co.,  80  111.  App.  378. 


340  WARKANTIES   AND    REPRESENTATIONS.  §  13^ 

liad  a  congli  and  spit  blood,  submitted  to  a  physical  examina- 
tion, obtained  a  prescription  and  paid  a  fee  therefor,  and  after- 
wards consulted  the  physician,  and  again  paid  a  fee.^^  A 
statement  by  an  applicant  that  he  had  never  called  a  doctor 
in  liis  life,  made  in  answer  to  a  question  requiring  him  to 
state  what  physician  last  attended  him,  and  for  what  com- 
plaint, is  untrue  if  the  applicant  has  previously  called  a 
physician,  though  only  for  a  temporary  ailment.^^  But  a 
question  as  to  the  name  of  the  physician  who  last  attended 
the  applicant,  and  the  date  of  his  last  visit,  has  been  held  to 
refer  to  a  physician  who  was  in  attendance  npon  the  appli- 
cant for  some  disease  or  ailment  of  importance,  and  not  for  a 
trivial  indisposition.®^ 

Sickness,  Bodily  Injury  and  Sound  Health,  etc. 

The  words  "hurt"  and  "wound"  in  a  question  contained  in 
an  application  for  life  insurance,  mean  and  refer  to  any  in- 
jury of  the  body  causing  an  impairment  of  health  or  strength, 
or  rendering  the  applicant  more  liable  to  contract  disease,  or 
less  liable  to  resist  its  effects.®^  "Sound  health"  means  a  state 
of  health  free  from  disease  that  affects  the  general  soundness 
of  the  system  seriously,  and  not  a  mere  temporary  indisposi- 
tion.    The  phrase  "serious  illness"  is  used  to  define  trouble 

•^  White  V.  Provident  Sav.  Life  Assiir.  Soc,  163  Mass.  108,  27  L. 
R.  A.  398;  Wall  v.  Royal  Soc.  of  Goodf allows,  179  Pa.  St.  355,  36 
Atl.  748. 

09  Providence  Life  Assur.  Soc.  v.  Reutlinger,  58  Ark.  528;  Brady 
v.  United  Life  Ins.  Ass'n  (C.  C.  A.),  60  Fed.  727.  See,  also,  Cobb  v. 
Covenant  Mut.  Ben.  Ass'n,  153  Mass.  176,  10  L.  R.  A.  666;  Roche 
V.  Supreme  Lodge,  K.  of  H.,  47  N.  Y.  Supp.  774;  Mutual  Life  Ins. 
Co.  V.  Arhelger  (Ariz.),  36  Pac.  895;  Aloe  v.  Mutual  Reserve  Life 
Ass'n,  147  Mo.  561,  49  S.  W.  553. 

""  Brown  v.  Metropolitan  Life  Ins.  Co.,  65  Mich.  306.  Compare 
Cushman  v.  United  States  Life  Ins.  Co.,  70  N.  Y.  72;  Higgins  v. 
Phoenix  Mut.  Life  Ins.  Co.,  74  N.  Y.  6;  Dentz  v.  O'Neill,  25  Hun 
(N.  Y.),  442;  Russell  v.  Canada  Life  Assur.  Co.,  8  Ont.  App.  716. 

"  Bancroft  v.  Home  Ben.  Ass'n,  120  N.  Y.  14,  8  L.  R.  A.  68. 


§  140  EEPKESENTATION    AND    MISflEPKESENTATION.  341 

of  great  importance,  and  one  likelj  to  have  an  influence  upon 
ilie  duration  of  life,  or  to  impair  subsequent  health. ^^  A 
warranty  bj  the  insured  that  he  is  in  sound  health  is  broken 
if  he  is  not  in  sound  health  at  the  time  of  making  the  warranty, 
whether  he  is  aware  of  that  fact  or  not.^^  And  a  warranty 
against  local  injury  or  infirmity  is  broken  if  the  insured  has 
a  stricture.^*  A  warranty  against  bodily  or  mental  in- 
firmity is  not  broken  by  the  fact  that  the  applicant  was  near- 
sighted, and  had  a  defective  vision.*"^ 

Representation  and  Misrepresentation. 

§  140.  A  false  representation  does  not  vitiate  a  policy  of  in- 
surance, unless  it  relates  to  a  fact  actually  material  to  the  risk, 
or  clearly  intended  to  be  made  material  by  the  agreement  of 
the  parties. 

A  representation  need  not,  like  a  warranty,  be  strictly  and 
literally  complied  with,  but  only  substantially  and  in  those 
particulars  which  are  material   to  be  disclosed   to  the  in- 

"  Brown  v.  Metropolitan  Life  Ins.  Co.,  65  Mich.  306,  32  N.  W. 
610;  Billings  v.  Metropolitan  Life  Ins.  Co.,  70  Vt.  477,  41  Atl.  516; 
Meyers  v.  Woodmen  of  the  World,  193  Pa.  St.  470,  44  Atl.  563. 

"'Foot  V.  Aetna  Life  Ins.  Co.,  61  N.  Y.  571;  Breeze,  v.  Metro- 
politan Life  Ins.  Co.,  24  App.  Div.  377,  48  N.  Y.  Supp.  753;  Supreme 
Lodge,  K.  of  H.,  V.  Dickison,  102  Tenn.  255,  52  S.  W.  862;  Powers  v. 
Northeastern  Mut.  Life  Ass'n,  50  Vt.  630. 

"*Hanna  v.  Mutual  Life  Ass'n,  11  App.  Div.  245,  42  N.  Y.  Supp. 
228. 

»'Cotten  V.  Fidelity  &  Casualty  Co.,  41  Fed.  506.  See,  also,  tem- 
porary ailment,  Pudritzky  v.  Supreme  Lodge,  K.  of  H.,  76  Mich.  428, 
43  N.  W.  ,373;  headaches.  Mutual  Life  Ins.  Co.  v.  Simpson,  88  Tex. 
333,  28  L.  R.  A.  765;  bodily  or  mental  infirmity,  fainting  spells. 
Manufacturers'  Ace.  Ind.  Co.  v.  Dorgan  (C.  C.  A.),  58  Fed.  945; 
family  history,  Jerrett  v.  John  Hancock  Mut.  Life  Ins.  Co.,  18  R.  I. 
754,  30  Atl.  793;  Bloomington  Mut.  Life  Ben.  Ass'n  v.  Cummins,  53 
111.  App.  530;  disease,  World  Mut.  Life  Ins.  Co.  v.  Schultz,  73  111. 
586;  temporary  ailment  not  disease,  Northwestern  Mut.  Life  Ins. 
Co.  V.  Heimann,  93  Ind.  24;  Metropolitan  Life  Ins.  Co.  v.  McTague, 
49  N.  J.  Law,  587,  9  Atl.  766;    Morrison  v.  Wisconsin  Odd  Fellows' 


342  WARRANTIES    AND    REPRESENTATIONS.  §   140 

surors.  "Where  tlie  question  of  the  materiality  of  such  par- 
ticulars depends  upon  circumstances,  and  not  upon  the  con- 
struction of  any  writing,  it  is  a  question  of  fact  to  be  deter- 
mined by  a  jury ;  but  where  the  representations  are  in  writing, 
their  interpretation,  like  that  of  other  written  instruments, 
belongs  to  the  court  The  parties  may,  by  the  frame  and 
contents  of  the  contract,  either  by  putting  representations  as  to 
the  quality  or  histoiy  of  the  subject  insured  into  the  form  of 
answers  to  specific  questions,  or  by  the  mode  of  referring  to 
them  in  the  policy,  settle  for  themselves  that  they  shall  be 
deemed  material ;  and  w^hen  they  have  done  so  the  insured  will 
not  afterwards  be  permitted  to  show  that  a  fact  which  the 
parties  have  declared  material  to  be  truly  stated  to  the  in- 
surers, was  in  fact  immaterial,  and  thereby  escape  from  the 
consequences  of  making  a  false  answer  to  such  a  question. 
The  untruth  of  a  representation  made  by  an  applicant,  and 
upon  which  a  policy  is  issued,  will  not  avoid  the  policy  nor 
give  an  insurer  the  right  to  avoid  it,  unless  the  representation 
be  material  to  the  risk,  or  made  so  by  the  parties,  or  knowingly 
and  fraudulently  made.®^ 

Mut.  Life. Ins.  Co.,  59  Wis.  162;  physician,  Dilleber  v.  Home  Life 
Ins.  Co.,  69  N.  Y.  256;  Flynn  v.  Equitable  Life  Ins.  Co.,  78  N.  Y. 
568;  affection  of  the  liver,  Connecticut  Mut.  Life  Ins.  Co.  v.  Union 
Trust  Co.,  112  U.  S.  250. 

«'Weil  v.  New  York  Life  Ins.  Co.,  47  La.  Ann.  1405;  Campbell  v. 
New  England  Mut.  Life  Ins.  Co.,  98  Mass.  381;  Cronin  v.  Fire 
Ass'n  of  Philadelphia,  112  Mich.  106,  70  N.  W.  449.  See  ante, 
note  1.  Though  the  particular  state  of  the  assured's  title  in  the 
property  insured  need  not  be  stated  unless  inquired  about  by  the 
insurers,  yet  a  substantially  untrue  answer  to  a  question  put  to 
him  by  an  insurer,  in  relation  to  his  title,  will  avoid  the  policy. 
Locke  v.  North  American  Ins.  Co.,  13  Mass.  61;  Strong  v.  Manu- 
facturers' Ins.  Co.,  10  Pick.  (Mass.)  45;  Fletcher  v.  Commonwealth 
Ins.  Co.,  18  Pick.  (Mass.)  421.  This  principle  is  equally  applicable 
to  cases  of  life  insurance.  Vose  v.  Eagle  L.  &  H.  Ins.  Co.,  6  Cush. 
(Mass.)  49.  An  answer  given  by  an  applicant,  which  is  untrue  in 
fact,  and  known  by  the  applicant  to  be  so,  avoids  the  policy,  irre- 


§   140  EEPEESENTATION    AND   MISKEPEESENTATION.  343 

False  representations  of  a  material  fact  Avill  avoid  a  policy 
taken  on  the  faith  thereof,  whether  the  misrepresentation  was 
innocently  or  fraudulently  made.^'^  But  a  false  answer  and 
representation  in  an  application  for  re-instatement,  does  not 
affect  the  liability  of  the  insurer  if  the  policy  had  not  lapsed, 
and  the  application  was  not  necessary.^^ 

Materiality  of  Representation. 

A  misrepresentation  as  to  an  immaterial  fact,  does  not,  in 
the  absence  of  moral  fraud,  avoid  the  policy,  unless  the  con- 
tract contains  a  clear  stipulation  that  any  misrepresentation, 
no  matter  how  immaterial,  shall  render  it  void.^^  But  the 
parties  often  stipulate  that  all  questions  asked,  and  answers 
given,  shall  be  material,  and  foreclose  inquiry  on  that  score, 

spective  of  the  materiality  of  the  answer  given.  Connecticut  Mut. 
Life  Ins.  Co.  v.  Pyle,  44  Ohio  St.  19;  Sweat  v.  Piscataquis  Mut.  Ins. 
Co.,  79  Me.  109.  If  the  matter  misrepresented  increases  the  risk, 
it  will  defeat  the  policy  although  not  made  with  intent  to  deceive. 
Ring  V.  Phoenix  Assur.  Co.,  145  Mass.  426.  Fraudulent  representa- 
tions made  by  the  assured  to  the  insurer  in  an  application  for  a 
policy,  though  not  in  fact  material  to  the  risk,  yet  material  in  the 
judgment  of  the  insurer,  and  which  induced  him  to  take  the  risk, 
will  avoid  the  policy.  Valton  v.  National  Fund  Life  Assur.  Co.,  20 
N.  Y.  32.  See,  also,  Aetna  Ins.  Co.  v.  Simmons,  49  Neb.  811,  69  N.  W. 
125;  Miotke  v.  Milwaukee  Mechanics'  Ins.  Co.,  113  Mich.  166. 

"'Continental  Ins.  Co.  v.Kasey,25  Grat.  (Va.)  268;  Ryan  v.Spring- 
field  F.  &  M.  Ins.  Co.,  46  Wis,  671;  Cronin  v.  Fire  Ass'n  of  Phila- 
delphia, 112  Mich.  106,  70  N.  W.  448.  A  material  misrepresenta- 
tion will  avoid  the  policy  if  the  insurer  would  not  havfe  assumed 
the  risk  if  it  had  known  the  truth.  Missouri,  K.  &  T.  Trust  Co. 
v.  German  Nat.  Bank  of  Denver  (C.  C.  A.),  77  Fed.  117;  Johns- 
ton v.  Northwestern  Live  Stock- Ins.  Co.,  107  Wis.  344,  83  N.  W.  644;' 
Alston  V.  Mechanics'  Mut.  Ins.  Co.,  4  Hill  (N.  Y.),  329;  Taylor  v. 
Aetna  Ins.  Co.,  120  Mass.  254;  Cerys  v.  State  Ins.  Co.,  71  Minn.  338. 

"*  Massachusetts  Ben.  Life  Ass'n  v.  Robinson,  104  Ga.  256,  42  L. 
R.  A.  261. 

"^  Manufacturers'  &  Merchants'  Mut.  Ins.  Co.  v.  Zeitinger,  168  111. 
286,  48  N.  E.  179;  Mosley  v.  Vermont  Mut.  Fire  Ins.  Co.,  55  Vt.  142. 


3-14  WARRANTIES   AND   REPRESENTATIONS.  §  140 

by  providing  that  the  imtnitli  of  any  answer  sliall  aYoid  tlie 
policy. '^^  Statements  concerning  tlie  condition  and  value  of 
the  property  insured  are  immaterial  where  the  policy  is 
issued  under  a  statute  requiring  the  insurer  to  personally 
examine  the  property,  and  that  the  parties  agree  upon  its 
insurable  value. '^^  Whether  a  representation  be  actually 
material  to  the  risk,  or  is  made  so  by  the  contract  of  the 
parties,  is  sometimes  a  question  of  fact,  sometimes  a  question 
of  law,  and  sometimes  a  mixed  question  of  fact  and  law."^ 
Misrepresentations  as  to  the  age  of  the  insured,  and  as  to  the 
age  of  his  parents  at  their  death,  and  the  disease  of  which 
they  died,  and  concerning  the  existence  of  his  brothers  and 
sisters,  and  their  health,  are  material  as  matters  of  law.'^" 
But  the  effect  and  materiality  of  a  misrepresentation  as  to 
the  health  and  physical  condition  of  the  applicant,"^*  and  as  to 
the  value  of  the  goods  insured,''^'  and  as  to  their  location/^ 
and  the  materiality  of  a  misrepresentation  concerning  the 

"  Stensgaard  v.  St.  Paul  Real  Estate  Title  Ins.  Co.,  50  Minn.  429, 
52  N.  W.  910;  O'Brien  v.  Home  Ins.  Co.,  79  Wis.  399,  48  N.  W.  714; 
Fromherz  v.  Yankton  Fire  Ins.  Co.,  7  S.  D.  187,  63  N.  W.  784. 

"  Queen  Ins.  Co.  v.  Leslie,  47  Ohio  St.  409,  9  L.  R.  A.  45. 

"Illustrations:  Overvaluation,  Boutelle  v.  Westchester  Fire  Ins. 
Co.,  51  Vt.  4;  misstatement  as  to  current  insurance.  Armour  r. 
Transatlantic  Fire  Ins.  Co.,  90  N.  Y.  450;  as  to  title,  Graham  v. 
Fireman's  Ins.  Co.,  87  N.  Y.  69;  as  to  nature  of  building  in  which 
goods  are  kept,  Prudhomme  v.  Salamander  Fire  Ins.  Co.,  27  La. 
Ann.  695.  See,  also,  Lycoming  Fire  Ins.  Co.  v.  Rubin,  79  111.  402; 
Schmidt  v.  Mutual  C.  &  V.  Fire  Ins.  Co.,  55  Mich.  432;  Cerys  v.  State 
Ins.  Co.,  71  Minn.  338. 

"Lowe  v.  Union  Cent.  Life  Ins.  Co.,  41  Ohio  St.  273;  Hartford 
L.  &  A.  Ins.  Co.  V.  Gray,  91  111.  159. 

'*  March  v.  Metropolitan  Life  Ins.  Co.,  186  Pa.  St.  629,  40  Atl. 
1100;  John  Hancock  Life  Ins.  Co.  v.  Warren,  59  Ohio  St.  45,  51 
N.  E.  546.     See  cases  ante. 

"Lycoming  Fire  Ins.  Co.  v.  Rubin,  79  111.  402. 

"Prudhomme  v.  Salamander  Fire  Ins.  Co.,  27  La.  Ann.  695. 


§  14:0  EEPEESENTATION    AND   MISREPKESENTATIOX.  345 

title/^  or  value  of  property  insured/^  liave  sometimes 
been  held  to  be  questions  for  tlie  jury.  Tlie  true  test  of  the 
materiality  of  a  representation  is  the  probable  effect  it  had 
upon  the  conduct  of  the  insurer  in  relation  to  the  assumption 
of  the  risk. 

""  Sweat  V.  Piscataquis  Mut.  Ins.  Co.,  79  Me.  109. 

"  Thayer  v.  Providence  W.  Ins.  Co.,  70  Me.  531. 

Other  questions  for  jury:  Physical  condition, McGowan  v. Supreme 
Court,  I.  O.  F.,  104  Wis.  173,  80  N.  W.  603;  change  in  building, 
Gerhauser  v.  North  British  &  M.  Ins.  Co.,  7  Nev.  174;  description 
of  goods,  Franklin  Fire  Ins.  Co.  v.  Martin,  40  N.  J.  Law,  568;  value 
of  property  insured.  Farmers'  Ins.  Co.  v.  McCluckin,  40  Ohio  St. 
42;  Franklin  Fire  Ins.  Co.  v.  Vaughan,  92  U.  S.  516;  Campbell  v. 
New  England  Mut.  Life  Ins.  Co.,  98  Mass.  381. 

Illustrations  of  fatal  misrepresentations: 

Fire:  Exposure  and  distance,  Chaffee  v.  Cattaraugus  County  Mut. 
Ins.  Co.,  18  N.  Y.  376;  title,  Collins  v.  St.  Paul  F.  &  M.  Ins.  Co.,  44 
Minn.  440;  Reithmueller  v.  Philadelphia  Fire  Ass'n,  20  Mo.  App. 
246;  O'Brien  v.  Home  Ins.  Co.,  79  Wis.  399.  48  N.  W.  714;  protection 
of  building  with  sprinklers,  Fromherz  v.  Yankton  Fire  Ins.  Co.,  7 
S.  D.  187,  63  N.  W.  784;  mortgage  foreclosure,  Pinkham  v.  Morang 
&  M.  Mut.  Fire  Ins.  Co.,  40  Me.  587;  danger  from  incendiaries, 
Jennings  v.  Chenango  County  Mut.  Ins.  Co.,  2  Denio  (N.  Y.),  75. 

Life:  Family  history,  Jerrett  v.  John  Hancock  Mut.  Life  Ins.  Co., 
18  R.  I.  754,  30  Atl.  793;  Bloomington  Mut.  Life  Ben.  Ass'n  v. 
Cummins,  53  111.  App.  530;  married  or  single.  United  Brethren  Mut. 
Aid  Soc.  v.  White,  100  Pa.  St.  12;  other  insurance,  March  v.  Metro- 
politan Life  Ins.  Co.,  186  Pa.  St.  629;  Bruce  v.  Connecticut  Mut.  Life 
Ins.  Co.,  74  Minn.  314,  77  N.  W.  210;  Penn  Mut.  Life  Ins.  Co.  v.  Me- 
chanics' Sav.  Bank  &  Trust  Co.,  37  U.  S.  App.  692,  43  U.  S.  App.  75, 
and  note  thereto  in  38  L.  R.  A.  33;  examination  by  physician,  March 
v.  Metropolitan  Life  Ins.  Co.,  supra;  Finch  v.  Modern  Woodmen  of 
America,  113  Mich.  440,  71  N.  W.  1104;  Ferris  v.  Home  Life  Assur. 
Co.,  118  Mich.  485,  76  N.  W.  1041;  temperate  habits,  Union  Cent. 
Life  Ins.  Co.  v.  Lee  (Ky.),  47  S.  W.  614;  Malicki  v.  Chicago  Guar- 
anty Fund  Life  Soc,  119  Mich.  151,  77  N.  W.  690;  age,  Swett  v. 
Citizens'  Mut.  Relief  Soc,  78  Me.  541;  Lowe  v.  Union  Cent.  Life 
Ins.  Co.,  41  Ohio  St.  273.  See,  also,  Valton  v.  National  Fund  Life 
Ins.  Co.,  20  N.  Y.  32  (misrepresentation  as  to  identity  of  applicant)  ; 
Siebel  v.  Northwestern  Mut.  Relief  Ass'n,  08  N.  W.   1009,  94   Wis. 


846  "warranties  anj)  eepkesentations.  §  141 

Concealment. 

§  141.  A  concealment  exists  when  either  party  withholds 
from  the  other  facts  which  are  unknown  to  that  other,  and  are 
material  to  the  risk,  and  in  good  faith  ought  to  be  disclosed. 

The  rule  of  marine  insurance,  which  required  the  insured  to 
voluntarily  disclose  to  the  insurer  all  facts  known  to  him,  and 
material  to  the  risk,  and  which  the  insurer  had  not  the  means 

253;  Insurance  Co.  v.  Lampkin,  38  Pac.  335;  Supreme  Council  v. 
Green,  71  Md.  263,  17  Atl.  1048  (identity  of  beneficiary  material). 

Illustrations  of  representations  not  fatal: 

Fire:  Value,  or  other  matter  stated  by  way  of  opinion.  Standard 
Oil  Co.  V.  Amazon  Ins.  Co.,  79  N.  Y.  506;  Fisher  v.  Crescent  Ins. 
Co.,  33  Fed.  549;  incumbrance.  Mutual  Mill  Ins.  Co.  v.  Gordon,  121 
111.  366.  Compare  Cerys  v.  State  Ins.  Co.  of  Des  Moines,  71  Minn. 
338.  A  representation  that  an  applicant  is  the  owner  of  the  prem- 
ises to  be  insured  is  not  false,  if  he  is  the  equitable  owner,  though 
he  has  no  legal  title.  Wainer  v.  Milford  Mut.  Fire  Ins.  Co.,  153' 
Mass.  335,  11  L.  R.  A.  598;  Kenton  Ins.  Co.  v.  Wigginton,  89  Ky. 
330,  7  L.  R.  A.  81;  Franklin  Fire  Ins  Co.  v.  Martin,  40  N.  J.  Law, 
568;  Rohrbach  v.  Germania  Fire  Ins.  Co.,  62  N.  Y.  47;  Buck  v. 
Phoenix  Ins.  Co.,  76  Me.  586;  Fame  Ins.  Co.  v.  Mann,  4  Bradw.  (111.) 
485;  Collins  v.  Charlestown  Mut.  Fire  Ins.  Co.,  10  Gray  (Mass.),. 
155.  A  representation  that  the  premises  were  used  for  a  residence 
and  stores  is  not  fatally  false  if  in  fact  they  were  used  for  the 
purposes  of  a  bakery  and  restaurant.  Richards  v.  Washington  F. 
&  M.  Ins.  Co.,  60  Mich.  420,  27  N.  W.  586.  See,  also,  as  to  use,  Liver- 
pool, L.  &  G.  Ins.  Co.  V.  Colgin  (Tex.  Civ.  App.),  34  S.  W.  291.  Age 
of  building,  Eddy  v.  Hawkeye  Ins.  Co.,  70  Iowa,  472,  30  N.  W.  808. 
A  representation  that  stovepipes  were  under  a  brick  chimney,  when 
in  fact  they  passed  through  the  roof,  will  not  avoid  the  policy  if 
it  be  shown  that  the  actual  condition  entails  no  additional  risk, 
Bankhead  v.  Des  Moines  Ins.  Co.,  70  Iowa,  387;  Eddy  v.  Hawkeye 
Ins.  Co.,  supra.  Taking  stock,  Wynne  v.  Liverpool  &  L.  &  G.  Ins. 
Co.,  71  N.  C.  121.  An  application  for  insurance  on  specified  goods,, 
while  they  are  contained  in  a  given  building,  into  which  they  are 
to  be  removed,  does  not  amount  to  a  representation  that  the  in- 
sured owned  the  building.  Omaha  Fire  Ins.  Co.  v.  Crighton,  50 
Neb.  314,  69  N.  W.  766.  A  distillery  is  not  represented  as  in  opera- 
tion by  describing  it  as  "occupied  by  assured  as  a  distillery,"  in  a 


§  141  CONCEALME^'T.  347 

of  knowiiii^,  or  was  not  presumed  to  know,  lias  never  obtained 
in  life  and  fire  insurance.  In  these  latter  classes  of  insur- 
ance the  rule  seems  to  be  that  an  applicant  need  not  volun- 
tarily disclose  to  the  insurer  even  matters  material  to  tho 
risk,  except  when  those  matters  concern  the  very  existence 
of  the  subject  matter  of  the  risk  at  the  time  the  insurance  is 
effected,  and  any  material  change  in  its  condition  between 
the  time  the  application  is  made  and  the  contract  is  consum- 
mated."^^ Any  change  in  the  health  of  the  insured  be- 
tween the  time  of  making  the  application  and  the  acceptance 
of  the  risk,  should  be  communicated  to  the  insurer.^^     And 

policy  issued  when  it  has  long  been  idle.  Louck  v.  Orient  Ins.  Co., 
176  Pa.  St.  638.  Good  faith  and  reasonable  diligence  to  ascertain 
the  truth  on  the  part  of  the  insured  in  making  his  representations 
are  ordinarily  all  that  can  be  required  of  him.  Field  v.  Insirrance 
Co.  of  North  America,  6  Biss.  121,  Fed.  Cas.  No.  4,767;  Harrington 
V.  Fitchburg  Mut.  Fire  Ins.  Co.,  124  Mass.  126;  Redman  v.  Hart- 
ford Fire  Ins.  Co.,  47  Wis.  89;  Miller  v.  Alliance  Ins.  Co.,  19 
Blatchf.  308,  7  Fed.  649;  Lynchburg  Fire  Ins.  Co.  v.  West,  76  Va. 
575;  Planters'  Ins.  Co.  v.  Myers,  55  Miss.  479;  Dupree  v.  Virginia 
Home  Ins.  Co.,  92  N.  C.  417;  Citizens'  F.  &  M.  Ins.  Co.  v.  Short,  62 
Ind.  316;  National  Bank  v.  Hartford  Fire  Ins.  Co.,  95  U.  S.  673. 
Compare  Goddard  v.  Monitor  Mut.  Fire  Ins.  Co.,  108  Mass.  56. 

Life:  Physical  condition,  illness,  etc..  Mutual  Reserve  Fund  Life 
Ass'n  V.  Farmer,  65  Ark.  581,  47  S.  W.  850;  Sieverts  v.  National 
Benev.  Ass'n,  95  Iowa,  710,  64  N.  W.  671;  consulting  physician, 
Sieverts  v.  National  Benev.  Ass'n,  supra;  Supreme  Lodge,  K.  of  P., 
V.  Taylor  (Ala.),  24  So.  247;  Billings  v.  Metropolitan  Life  Ins.  Co., 
70  Vt.  477,  41  Atl.  516.  A  misrepresentation  concerning  the  amount 
of  other  life  insurance  carried  by  the  applicant  is  not  always  fatal, 
Germania  Ins.  Co.  v.  Rudwig,  80  Ky.  223.  See,  also,  as  to  nonfatal 
misrepresentations,  Manhattan  Life  Ins.  Co.  v.  Carder,  42  U.  S. 
App.  659,  82  Fed.  986;  New  York  Life  Ins.  Co.  v.  Baker,  49  U.  S.' 
App.  690,  83  Fed.  647;  Wiberg  v.  Minnesota  S.  R.  Ass'n,  73  Minn. 
297,  age  of  applicant. 

"Washington  Mills  Emery  Mfg.  Co.  v.  Weymouth  &  B.  Mut.  Fire 
Ins.  Co.,  135  Mass.  503;  Newman  v.  Springfield  F.  &  M.  Ins.  Co.,  17 
Minn.  123  (Gil.  98). 

""Ormond  v.  Fidelity  Life  Ass'n,  96  N.  C.  158;  Cable  v.  United 
States  Life  Ins.  Co.  (C.  C.  A.),  Ill  Fed.  26. 


SttS  WARKANTIES   AND   KEPEESENTATIONS.  §  141 

if,  between  tlie  time  of  making  the  application  and  tlie  com- 
pletion of  the  contract  the  building  upon  which  insurance 
is  sought  has  been  destroyed,  it  is  the  duty  of  the  applicant 
to  make  known  the  facts  to  the  insurer.^^  Good  faith  and 
fair  dealing  require  that  changes  so  material  to  the  risk,  and 
of  such  vital  imi3ortance  to  the  insurer,  if  unknown  to  it,  and 
known  by  the  applicant,  be  communicated  by  the  latter  to  the 
former,  and  the  failure  to  make  such  communication  is  a 
concealment,  for  wdiicli  the  insurer  can  avoid  the  contract.^^ 
The  rule  that  an  insured  is  required  to  state  fairly  and  fully 
the  facts  in  regard  to  the  risk,  and  that  any  fraud,  or  fraudu- 
lent concealment  of  the  facts  in  regard  to  such  risk  w^ill  avoid 
the  policy,  only  obtains  when  the  insurer  exacts  such  informa- 
tion from  the  insured.  The  latter  is  not  bound  to  volunteer 
any  information.  If  he  answers  correctly  all  the  questions 
put  to  him,  the  mere  omission  to  state  matter  not  called  for 
by  any  specific  or  general  question,  is  not  a  concealment.  If 
the  applicant  truly  answers  the  questions  put  to  him,  an<l 
does  not  intentionally  suppress  or  omit  further  information, 
though  the  questions  suggest  a  fuller  and  more  detailed 
reply,  he  has  discharged  his  duty.  If  the  insurer  accept  the 
partial  answer  it  cannot  claim  a  warranty  or  representation 
extending  beyond  what  is  disclosed.  The  mere  failure  of 
the  assured  to  mention  facts  material  to  the  risk,  and  about 
wdiich   the  insurer  does  not  inquire,   will   not   vitiate  the 

»'  Wales  V.  New  York  Bowery  Fire  Ins.  Co.,  37  Minn.  106,  33  N.  W. 
322. 

»' Piedmont  &  A.  Life  Ins.  Co.  v.  Ewing,  92  U.  S.  377;  Mutual  Life 
Ins.  Co.  V.  Young's  Adm'r,  23  Wall.  (U.  S.)  85;  Equitable  Life 
Assur.  Soc.  V.  McElroy,  49  U.  S.  App.  548,  83  Fed.  631;  Royal  Can- 
adian Ins.  Co.  V.  Smith,  5  Russ.  &  G.  (Nova  Scotia)  322;  People  v. 
Dimick,  41  Hun  (N.  Y.),  616;  Blackburn  v.  Vigors,  17  Q.  B.  Div. 
533.    But  see  Snow  v.  Mercantile  Mut.  Ins.  Co.,  61  N.  Y.  160. 


II 


§  142  FRAUD.  34» 

policy.^^  And  if  a  question  in  the  application  is  not  an- 
SAvored,  and  tlie  company  issues  a  policy  on  the  application, 
it  cannot  afterwards  complain  of  a  concealment  through  fail- 
ure of  the  applicant  to  answer  such  question.®"* 

An  insurance  company,  when  it  issues  a  policy,  is  presumed 
to  know  what  is  obvious  in  regard  to  the  property  insured,  the 
natural  perils  to  which  it  is  exposed,  and  the  usual  and 
customary  method  of  conducting  the  business  pertaining  ta 
the  property  insured.  In  the  absence  of  express  stipulation, 
and  where  no  inquiry  is  made,  a  failure  to  state  facts  known 
to  the  insurer  or  his  agent,  or  which  he  ought  to  know,  is  no 
concealment.®^ 

Fraud. 

§  142.  Either  insurer  or  insured  may  be  released  fi-otn  the 
legal  consequences  of  an  insurance  contract  into  which  he  has 
been  induced  to  enter  by  reliance  upon  the  false  and  fraudu- 
lent statements  or  representations  of  the  other  contracting^ 
party. 

The  general  law  governing  the  matter  of  contracts,  and  the 
right  to  rescind  or  avoid  a  contract  on  account  of  fraud  which 
induced   its   making,   applies   to  insurance  contracts.     The 

"'Penn  Mut.  Life  Ins.  Co.  v.  Wiler,  100  Ind.  92;  Hoke  v.  Richie, 
100  Ky.  6G,  37  S.  W.  266,  38  S.  W.  132;  Flynn  v.  Equitable  Life  Ins. 
Co.,  78  N.  Y.  568;  Seal  v., Farmers'  &  Merchants'  Ins.  Co.,  59  Neb. 
2*53,  80  N.  W.  808;  Johnson  v.  Scottish  U.  &  N.  Ins.  Co.,  93  Wis.  233, 
67  N.  W.  416;  Connecticut  Mut.  Life  Ins.  Co.  v.  Luchs,  108  U.  S.  498. 

"Armenia  Ins.  Co.  v.  Paul,  91  Pa.  St.  520;  Alkan  v.  New  Hamp- 
shire Ins.  Co.,  53  Wis.  136;  Rawls  v.  American  Mut.  Life  Ins.  Co., 
27  N.  Y.  282;  March  v.  Metropolitan  Life  Ins.  Co.,  186  Pa.  St.  620, 
40  Atl.  1100;  Dolliver  v.  St.  Joseph  F.  &  M.  Ins.  Co.,  131  Mass.  39; 
Union  Mut.  Life  Ins.  Co.  v.  Wilkinson,  13  Wall.  (U.  S.)  230;  Con- 
necticut Mut.  Life  Ins.  Co.  v.  Union  Trust  Co.,  112  U.  S.  250. 

*'  Hey  V.  Guarantors'  Liability  Ind.  Co.,  181  Pa.  St.  220,  59  Am.  St. 
Rep.  645;  Faust  v.  American  Fire  Ins.  Co.,  91  Wis.  158,  51  Am.  St. 
Rep.  876.  The  omission  of  an  applicant  to  answer  a  question  con- 
tained in  the  application  does  not  constitute  a  concealment.  Amer* 
ican  Life  Ins.  Co.  v.  Mahone,  21  Wall.  (U.  S.)   152. 


350  waeea:nties  and  eepeesentations.  §  142 

fraud  may  consist  either  in  the  assertion  of  an  untrue  state- 
ment material  to  the  risk,  or  in  the  suppression  of  information 
^vhich  good  faith  requires  should  be  disclosed.  An  imtrue 
statement,  or  denial  of  a  material  fact,  preceding  or  con- 
temporaneous with  the  consummation  of  a  contract  of  insur- 
ance, prevents  the  policy  that  is  based  upon  it  from  taking 
effect  as  a  contract  of  insurance,  whether  the  statement  was 
made  igmorantly  and  in  good  faith,  or  otherwase.^^  If  a  per- 
son is  induced  by  false  and  fraudulent  representations  of 
the  agent  of  an  insurance  company  to  take  a  policy  in  the  com- 
pany, and  pay  the  premium  therefor,  he  may  rescind  the 
contract,  and  recover  as  damages  the  amount  of  the  premium 
paid.^^  Likewise  an  insurer  may  avoid  a  policy  issued  in 
reliance  on  false  and  fraudulent  representations  of  the  ap- 
l^licant.^^  A  false  statement,  intentionally  and  knowingly 
or  fraudulently  made,  constitutes  fraud,  and  the  statement  of 
a  fact  as  true  which  a  party  does  not  know  to  be  true,  and 
which  he  has  no  reasonable  ground  for  believing  to  be  true,  is 
fraudulent.^^    And  the  settlement  of  a  claim  on  an  insurance 

'"3  Kent,  Com.  282;  Curry  v.  Common-wealtli  Ins.  Co.,  10  Pick. 
(Mass.)   535. 

»' Michigan  Mut.  Life  Ins.  Co.  v.  Reed,  84  Mich.  524,  13  L.  R,  A, 
351;  Godfrey  v.  New  York  Life  Ins.  Co.,  70  Minn.  224;  Hedden  v. 
Griffin,  136  Mass.  229;  Globe  Mut.  Life  Ins.  Co.  v.  Reals,  50  How. 
Prac.  237. 

^American  Ins.  Co,  v.  Gilbert,  27  Mich.  429;  New  York  Mut.  Life 
Ins.  Co.  V.  Armstrong,  117  U.  S.  591;  Moore  v.  Virginia  F.  &  M.  Ins. 
Co.,  28  Grat.  (Va.)  508;  Digby  v.  American  Cent.  Ins.  Co.,  3  Mo. 
App.  603;  Harris  v.  Equitable  Life  Assur.  Soc,  64  N.  Y.  196.  See, 
also,  Traband  v.  Connecticut  Mut.  Life  Ins.  Co.,  131  Mass.  167; 
Hearne  v.  Marine  Ins.  Co.,  20  Wall.  (U.  S.)  488;  Piedmont  &  A.  Life 
Ins.  Co.  V.  Ewing,  92  U.  S.  377. 

«°  Linscott  V.  Orient  Ins.  Co.,  88  Me.  497,  51  Am.  St.  Rep.  435.  As 
to  construction  of  statutes  regulating  effect  of  warranties,  repre- 
sentations, and  misrepresentations  in  application,  see  White  v. 
Provident  Sav.  Life  Assur.   Soc,  163  Mass.   108,   27  L.  R.  A.   398; 


§  143  MISTAKES    OP   AGENTS. 


351 


policy,  induced  hj  fraud,  may  be  set  aside,  and  the  money 
recovered.*^  *^ 

Mistakes  of  Agents. 

.  §  143.  An  insurance  company  cannot  take  advantage  of  any 
"breach  of  warranty  or  misrepresentation  resulting  from  the 
negligence  or  misconduct  of  its  own  agent,  except  where  the 
agent  and  the  applicant  have  conspired  to  deceive  or  defraud 
the  insurer. 

The  mle  that  the  breach  of  Avarranty  of  the  truth  of  an 
applicant's  answer,  and  that  a  misrepresentation  of  a  material 
fact  by  an  applicant,  avoids  a  policy  without  reference  to 
tlie  good  faith  of  the  applicant,  does  not  apply  where  the 
falsity  of  an  answer,  or  the  misstatement  of  fact  in  the  ap- 
plication, results  from  a  mistake  in  judgment,  or  an  error  or 
blunder  of  the  agent  of  the  insurer,  who  prepared  the  applica- 
tion, and  who  wrote  down  the  answers  after  a  full  and  true 
statement  of  the  facts  by  the  applicant.^  ^  Thus  an  appli- 
cant for  insurance  Avho  gives  correct  answers  to  all  inquiries 
made  of  him,  is  not  prejudiced  by  the  failure  of  the  agent  of 
the  company  to  correctly  write  the  answers  as  given  in  the 
application  signed  by  the  applicant,  even  though  the  policy 
stipulates  that  the  application  shall  be  considered  a  part  of 

Fidelity  Mut.  Life  Ass'n  v.  Ficklin,  74  Md.  172;  Dolan  v.  Mutual 
Reserve  Fund  Life  Ass'n,  173  Mass.  197,  53  N.  B.  398;  Kenton  Ins. 
Co.  V.  Wigginton,  89  Ky.  330,  7  L.  R.  A.  81. 

»» Northwestern  Mut.  Life  Ins.  Co.  v.  Elliott,  7  Sawy.  17,  5  Fed. 
225;  Globe  Mut.  Ins.  Co.  v.  Reals,  50  How.  Prac.  237;  Michigan  Mut. 
Life  Ins.  Co.  v.  Reed,  84  Mich.  524;  Potter  v.  Monmouth  Mut.  Fire 
Ins.  Co.,  63  Me.  440;  State  v.  Towle,  80  Me.  287,  14  Atl.  195. 

"Whitney  v.  National  Masonic  Ace.  Ass'n,  57  Minn.  478;  Bour- 
geois V.  Mutual  Fire  Ins.  Co.,  86  Wis.  402;  Phcenix  Ins.  Co.  v. 
Stocks,  149  111.  319;  Howard  Fire  Ins.  Co.  v.  Bruner,  23  Pa.  St.  50; 
Phoenix  Ins.  Co.  v.  Warttemberg  (C.  C.  A.),  79  Fed.  245,  distinguish- 
ing New  York  Life  Ins.  Co.  v.  Fletcher,  117  U.  S.  519;  Germania 
Life  Ins.  Co.  v.  Lunkenheimer,  127  Ind.  536. 


352  WAEKANTIES    AND    EEPKESENTATIONS.  §  144: 

tlic  policy  and  the  applicant  warrants  the  truth  of  the  state- 
ments made.®^  But  an  insurance  company  is  not  liable  on  a 
policy  issued  to  one  whose  application  contained  material 
representations  as  to  his  health  hnown  by  him  to  be  untrue, 
and  warranted  by  him  to  be  tiaie,  even  though  the  agent  to 
whom  the  application  was  made  had  knowledge  of  the  untruth 
of  the  statenients.  No  man  can  take  advantage  of  his  own 
fraud,  and  an  insurer  will  always  be  allowed  to  show  collu- 
sion between  its  agent  and  an  applicant.^^ 

Waiver  of  Misrepresentation,  Breach  of  Warranty, 
Fraud  or  Concealment. 

§  144.  An  insurer  may  by  its  conduct  estop  itself  from  taking 
advantage  of  any  breach  of  warranty  or  misrepresentation,  or 
fraud  or  concealment  practiced  upon  it  by  an  applicant.  The 
waiver  or  estoppel  must  be  predicated  upon  a  knowledge  by 
the  insurer  of  the  facts  claimed  to  have  been  waived  by  it. 

An  insurance  company  which  issues  a  policy  with  full 
knowledge  of  the  existence  of  breach  of  warranty  or  rep- 
resentation, thereby  waives  the  falsity  of  the  warranty  and 
rej)resentation.  The  knowledge  of  the  agent  is  the  knowl- 
edge of  his  principal.^ ^  The  right  of  an  insurer  to  take 
advantage  of  any  fact  on  account  of  which  it  might  avoid 
the  policy  may  be  waived,  either  expressly,  or  by  acts  or  cou- 

°' German  Ins.  Co.  v.  Gray,  43  Kan.  497,  8  L.  R.  A,  70;  Continental 
Ins.  Co.  V.  Chamberlain,  132  U.  S.  304. 

*'Nassl  V.  Metropolitan  Life  Ins.  Co.,  19  Misc.  Rep.  413,  44  N.  Y. 
Supp.  261;  Ketcham  v.  American  Mut.  Ace.  Ass'n,  117  Mich.  521,  76 
N.  W.  5;  Brown  v.  Metropolitan  Life  Ins.  Co.,  65  Mich.  306,  32  N.  W. 
310.    See  ante,  §  93,  "Collusion." 

'^Quigley  v.  St.  Paul  Title  Insurance  &  Trust  Co.,  60  Minn.  275, 
62  N.  W.  287;  Stone  v.  Hawkeye  Ins.  Co.,  68  Iowa,  737;  Mullin  v. 
Vermont  Mut.  Fire  Ins.  Co.,  58  Vt.  113.  See  ante,  c.  8,  "Agents;" 
Finch  V.  Modern  Woodmen  of  America,  113  Mich.  646,  71  N.  W.  1104; 
Michigan  Shingle  Co.  v.  State  Inv.  &  Ins.  Co.,  94  Mich.  389,  53  N,  W. 
945. 


§  145   BURDEN  OF  PROOF  OF  BREACH  OF  "WARRANTY. 


353 


duct  inconsistent  with  an  intention  to  take  advantage  of  tlie 
right  to  avoid  the  policy;  as,  by  thereafter  treating  the 
policy  as  valid,  or  accepting  premiums  due  upon  it.^^ 

Burden  of  Proof  of  Breach  of  Warranty  or  Repre- 
sentation. 

§  145.  An  insurer  relying  upon  a  breach  of  warranty  or  mis- 
representation, or  fraud  or  concealment  connected  ■with  the 
procurement  of  a  policy,  must  allege  and  prove  the  particular 
facts  upon  which  it  bases  its  defense. 

The  presumption  of  law  is  that  a  policy  is  a  valid  and  bind- 
ing contract.  The  plaintiff  in  a  suit  upon  a  policy  is  not 
bound  to  go  beyond  the  written  instrument  and  show  the 
statements  contained  in  the  application,  and  their  truth.  The 
burden  is  upon  the  defendant,  in  every  case,  to  set  forth  and 
establish  the  fraud,  concealment,  misrepresentation,  breach 
of  warranty,  performance  of  prohibited  acts,  or  violation  of 
the  conditions  and  particular  facts,  upon  which  it  seeks  to 
defeat  the  contract.^ ^ 

''New  York  Life  Ins.  Co.  v.  Baker,  49  U,  S.  App.  690,  83  Fed.  647; 
Com.  V.  Hide  &  Leather  Ins.  Co.,  112  Mass.  136;  Baker  v.  New  York 
Life  Ins.  Co.,  77  Fed.  550.  See  Waiver  of  Breach  of  Conditions  of 
Policy;  Waiver  of  Proofs  of  Loss. 

"  Chambers  v.  Northwestern  Mut.  Life  Ins.  Co.,  64  Minn.  496,  58 
Am.  St.  Rep.  549;  Redman  v.  Aetna  Ins.  Co.,  49  Wis.  431,  4  N.  W. 
591;  Piedmont  &  A.  Life  Ins.  Co.  v.  Ewing,  92  U.  S.  377;  Yore  v. 
Booth,  110  Cal.  238,  52  Am.  St.  Rep.  81;  Allen  v.  Home  Ins.  Co. 
(Cal.),  30  Ins.  Law  J.  712,  65  Pac.  138. 

KERR  INS.  — 23 


CHAPTER  XII. 

THE  CONTRACT  AND  ITS  INCIDENTS. 

§  146-147.  The  Subject  Matter. 
148-150,  The  Risk  Assumed. 

151.  Terms,  Conditions  and  Stipulations  of  the  Policy. 
152-157.  The  Liability  of  the  Insurer. 

The  Subject  Mattek. 

§  146.  The  subject  matter  of  a  contract  of  insurance  is  that 
interest  in  respect  to  which  the  payee  is  promised  indemnity. 
It  is  the  insurable  interest  in  the  subject  matter  of  the  contract 
which  is  covered  by  insurance,  and  not  the  life  or  property 
involved. 

§  147.  Damage  to  any  lawful  and  insurable  interest  in  and  to 
the  subject  matter  of  a  risk  may  be  insured  against. 

What  Risks  are  Legal. 

Any  appreciable  insurable  interest,  either  in  life  or  prop- 
erty, may  be  insured,  provided  encouragement  and  protection 
"will  not  thereby  be  afforded  to  the  insured  in  any  business  or 
project  forbidden  by  law,  or  violative  of  public  policy.  A 
contract  insuring  one  against  illegal  acts,  or  against  loss  in 
the  conduct  or  maintenance  of  illegal  business,  is  void.  But 
an  insurance  upon  property  recognized  in  law,  and  protected 
by  it,  is  valid,  even  though  the  property  be  susceptible  of  use, 
or  be  actually  used,  for  an  unlawful  purpose.  If  the  insured 
property  is  susceptible  of  lawful  uses,  no  one  can  be  held  to 
contract  concerning  it  in  an  illegal  manner,  unless  the  contract 
itself  is  for  a  directly  illegal  purpose.  Collateral  contracts, 
in  which  no  illegal  design  enters,  are  not  affected  by  an  illegal 
transaction  with  which  they  may  be  remotely  connected. 


§§  140,   147  THE    SUBJECT    MATTER.  355 

The  principle  established  is  that  where  the  consideration 
is  illegal,  immoral  and  wrong,  or  where  the  direct  purpose  of 
the  contract  is  to  effect,  advance,  or  encourage  acts  in  violation 
of  law,  it  is  void.  But  if  the  contract  sought  to  be  enforced 
is  collateral  and  independent,  though  in  some  way  connected 
with  acts  done  in  violation  of  law,  the  contract  is  not  void. 

If  the  contract  is  legal  upon  its  face,  and  was  made  upon 
good  consideration,  and  to  accomplish  a  good  and  lawful  pur- 
pose, and  not  to  further,  foster,  encourage  or  protect  an  un- 
lawful purpose,  it  does  not  come  within  that  class  of  cases 
where  the  consideration  is  a  violation  of  law  or  good  morals, 
or  where  the  object  and  effect  of  the  contract  will  be  to  promote 
or  advance  some,  unlawful  purpose,  which  would  thus  be  a 
violation  of  law,  or  immoral.-^ 

^Carrigan  v.  Lycoming  Fire  Ins.  Co.,  53  Vt.  418,  38  Am.  Rep.  687; 
Armstrong  v.  Toler,  11  Wheat.  (U.  S.)  258;  Boardman  v.  Merrimack 
Mut.  Fire  Ins.  Co.,  8  Cush.  (Mass.)  583;  Niagara  Fire  Ins.  Co.  v. 
De  Graff,  12  Mich.  124;  Erb  v.  German- American  Ins.  Co.,  98  Iowa, 
606,  40  L.  R.  A.  845;  Phenix  Ins.  Co.  v.  Clay,  101  Ga.  331,  28  S.  B. 
853;  Claflin  v.  United  States  Credit  System  Co.,  165  Mass.  501,  52 
Am.  St.  Rep.  528;  Com.  Ins.  Co.  v.  Sennett,  37  Pa.  St.  205,  78  Am. 
Dec.  418;  Bradtfeldt  v.  Cooke,  27  Or.  194,  50  Am.  St.  Rep.  701. 

Public  policy  will  not  permit  a  recovery  upon  a  policy  where  the 
insured's  death  was  caused  by  an  abortion,  voluntarily  submitted 
to,  without  any  medical  necessity  therefor.  Wells  v.  New  England 
Mut.  Life  Ins.  Co.,  191  Pa.  St.  207,  43  Atl.  126.  A  contract  of  life 
insurance  providing  for  payment  if  insured  in  sound  mind  took  his 
own  life  would  be  against  public  policy,  and  unenforceable  in  law. 
Ritter  v.  Mutual  Life  Ins.  Co.,  169  U.  S.  139.  A  contract  guaranty- 
ing the  honesty  of  employes  is  not  contrary  to  public  policy.  Fi- 
delity &  Casualty  Co.  v.  Eickhoff,  63  Minn.  170,  65  N.  W.  351.  And 
a  common  carrier  may  lawfully  insure  against  liability  for  loss  of 
goods  carried  by  it,  though  the  loss  be  caused  by  the  negligence  of 
its  own  servants.  Minneapolis,  St.  Paul  &  S.  S.  M.  Ry.  Co.  v.  Home 
Ins.  Co.,  64  Minn.  61,  66  N.  W.  132.  Insurance  against  business 
losses  is  valid.  Hayne  v.  Metropolitan  Trust  Co.,  67  Minn.  245; 
Claflin  V.  United  States  Credit  System  Co.,  165  Mass.  501.  A  policy 
issued  to  one  who  has    not  an    insurable    interest  in  the    subject- 


356  THE   CONTRACT   A^D   ITS   INCIDENTS.        §§  liS-lSO 

The  Risk  Assumed. 

§  148.  The  rights  of  the  insured  and  the  liabilities  of  the  in- 
surer are  fixed  by  the  contract  of  insurance  into  which  they 
have  entered. 

§  149.  "What  risk  is  assumed,  what  interest  is  insured,  and 
when  and  where,  the  extent  and  limitations  of  the  liability,  and 
what  conditions  or  circumstances  will  operate  to  bind  or  re- 
lease the  insurer,  or  create  or  destroy  a  right  of  action  in  the 
insured,  must  always  be  determined  by  the  terms  of  the  con- 
tract. 

§  150.  Insurance  against  loss  or  damage  caused  by  a  specified 
peril  afibrds  protection  within  the  stated  amount  against  the 
immediate  and  direct  effect  of  that  peril,  unless  its  occurrence 
be  caused  by  the  wilful  and  wrongful  act  of  the  insured,  or  it 
happens  or  operates  within  the  exceptions  of  the  contract. 

The  Fire  Rislcs. 

The  fair  and  reasonable  interpretation  of  a  policy  of  insur- 
ance against  fire,  will  include,  within  the  obligation  of  the 
insurer,  every  imexcepted  item  of  loss  or  damage  which 
necessarily  follows  from  the  occurrence  of  the  fire  to  the 
amount  of  the  actual  injury  to  the  subject  of  the  risk,  when- 
ever that  injury  may  arise  directly  and  immediately  from  the 
peril,  or  necessarily  from  incidental  and  surrounding  cir- 
cumstances, the  operation  and  control  of  which  could  not  be 
avoided.  It  will  cover  loss  and  damage  which  the  peril  in- 
sured against  was  the  means  or  agency  in  causing,  even 
though  it  was  due  to  some  other  efficient  cause  which  made 
use  of  it,  or  set  it  in  motion,  if  the  original  efficient  cause  was 

matter  of  the  risk  is  unenforceable.     See  ante,  c.  9,  "Insurable  In- 
terest." 

As  to  violation  of  excise  laws  affecting  insured  property  upon, 
the  validity  of  a  policy,  see  Kelly  v.  Home  Ins.  Co.,  97  Mass.  288; 
Lawrence  v.  National  Fire  Ins.  Co.,  127  Mass.  557;  Campbell  v. 
Charter  Oak  F.  &  M.  Ins.  Co.,  10  Allen  (Mass.),  213;  Hinckley  v. 
Germania  Fire  Ins.  Co.,  140  Mass.  38,  54  Am.  Rep.  445;  Carrigan  v. 
Lycoming  Fire  Ins.  Co.,  supra;   People's  Ins.  Co.  v.  Spencer,  53  Pa. 


§  150  THE   RISK   ASSUMED.  357 

not  in  itself  made  a  subject  of  separate  insurance.^  Thus 
the  fire  in  a  building  is  the  proximate  cause  of  damage  to 
electrical  machinery  in  a  remote  part  of  the  building  which 
is  not  burned,  where  the  fire  causes  a  short  circuit,  thereby 
starting  a  powerful  current  of  electricity,  which  breaks  and 
Avrecks  the  machinery.^ 

"Direct  loss  or  damage  by  fire,"  means  loss  or  damage  occur- 
ring directly  from  fire  as  the  destroying  agency,  in  contradis- 
tinction to  the  remoteness  of  fire  as  such  agency.^  An  ordi- 
nary fire  policy  does  not  cover  a  loss  caused  by  escaping  steam. 
The  word  "fire"  does  not  include  heat  insufficient  to  cause 
ignition.^  A  fire  in  a  chimney,  caused  by  the  accidental 
ignition  of  soot,  or  the  smoke  issuing  from  such  fire,  is  within 
the  contract.^ 

Insurers  are  liable  for  direct  and  immediate,  not  for  con- 
sequential and  remote,  losses  from  the  peril  insured  against. 
When  that  peril  is  fire  the  instrument  of  destruction  must 
l->e  fire.  Whether  the  cause  is  proximate  or  remote  do'es  not 
depend  alone  upon  its  closeness  in  the  order  of  time  in  which 
certain   things   occur.     An   efiicient,    adequate   cause  being 

St.  353,  91  Am.  Dec.  217;  Manchester  Fire  Assur,  Co.  v.  Feibelman, 
118  Ala.  308,  23  So.  759,  27  Ins.  Law  J.  855.  As  to  effect  of  offenses 
against  law  upon  policy,  see  Mount  v.  Waite,  7  Johns.  (N.  Y.)  434; 
Springfield  F.  &  M.  Ins.  Co.  v.  Cannon  (Tex.  Civ.  App.),  46  S.  W. 
375;  Cedar  Rapids  Ins.  Co.  v.  Shimp,  16  111.  App.  248;  Indiana  Ins. 
Co.  V.  Brehm,  88  Ind.  578. 

*  Brady  v.  Northwestern  las.  Co.,  11  Mich.  425;  Case  v.  Hartford 
Fire  Ins.  Co.,  13  111.  676;  Wheeler  v.  Traders'  Ins.  Co.,  62  N.  H.  450. 
13  Am.  St.  Rep.  585;  Heffron  v.  Kittanning  Ins.  Co.,  132  Pa.  St.  580; 
Renshaw  v.  Fireman's  Ins.  Co.,  33  Mo.  App.  403. 

"  Lynn  Gas  &  Electric  Co.  v.  Meriden  Fire  Ins.  Co.,  158  Mass.  570, 
20  L.  R.  A.  297. 

^California  Ins.  Co.  v.  Union  Compress  Co.,  133  U.  S.  387. 

"Gibbons  v.  German  Ins.  &  Sav.  Institution,  30  111.  App.  263. 

°  Way  V.  Abbington  Mut.  Fire  Ins.  Co.,  166  Mass.  67,  43  N.  E.  1032, 
32  L.  R.  A.  608. 


358  THE    CONTRACT    AND    ITS    INCIDENTS.  §  150 

foimd,  it  must  be  deemed  tlie  true  cause,  unless  some  other 
cause,  not  incidental  to  it,  but  independent  of  it,  is  shown  to 
have  intei-^'cned  between  it  and  the  result.  When  it  is  said 
that  the  cause  to  be  sought  is  the  direct  and  proximate  cause, 
it  is  not  meant  that  the  cause  or  agency  which  is  nearest  in 
point  of  time  or  place  to  the  result  is  necessarily  to  be  shown. 
The  active,  efficient  cause,  that  sets  in  motion  a  train  of  events 
which  brings  about  a  result,  without  the  intervention  of  any 
force  started  and  working  actively  from  a  new  source,  is  the 
direct  and  proximate  cause.  The  primary  cause  may  be  the 
proximate  cause,  though  it  may  operate  through  successive 
instruments ;  as  an  article  at  the  end  of  a  chain  may  be  moved 
by  a  force  applied  to  the  other  end,  that  force  being  the 
proximate  cause  of  the  movement.  The  question  always  is. 
Was  there  an  unbroken  connection  ?  Did  the  facts  constitute 
a  continuous  succession  of  events,  so  linked  together  as  to 
form  a  natural  whole,  or  was  there  some  new  and  independent 
cause  intervening  between  the  primary  cause  and  the  ultimate 
damage.'^ 

Where  the  negligent  act  of  the  insured,  or  of  somebody  else, 
causes  a  fire,  and  so  causes  damage,  although  the  negligent 
act  is  the  direct  proximate  cause  of  the  damage  through  the 
fire,  which  is  the  visible  agency,  the  insurer  is  held  liable  for 
a  loss  caused  by  the  fire.^     The  loss  or  damage  by  fire  includes 

'Waters  v.  Merchants'  Louisville  Ins.  Co.,  11  Pet.  (U.  S.)  213; 
Renshaw  v.  Missouri  State  Mut.  F.  &  M.  Ins.  Co.,  103  Mo.  595,  23 
Am.  St.  Rep.  904;  Scripture  v.  Lowell  Mut.  Fire  Ins.  Co.,  10  Cush. 
(Mass.)  356,  57  Am.  Dec.  Ill;  Hillier  v.  Allegheny  County  Mut.  Ins. 
Co.,  3  Pa.  St.  470,  45  Am.  Dec.  656;  White  v.  Republic  Fire  Ins.  Co., 
57  Me.  91;  Dyer  v.  Piscataqua  F.  &  M.  Ins.  Co.,  53  Me.  118;  Miller  v. 
Mutual  Ben.  Life  Ins.  Co.,  31  Iowa,  235;  Prader  v.  National  Masonic 
Ace.  Ass'n,  55  Iowa,  149,  63  N.  W.  601;  Wheeler  v.  Traders'  Ins.  Co., 
62  N.  H.  450,  13  Am.  St.  Rep.  582;  Way  v.  Abington  Mut.  Fire  Ins. 
Co.,  166  Mass.  67,  32  L,  R.  A.  608. 

'Johnson  v.  Berkshire   Mut.  Fire  Ins.  Co.,  4    Allen  (Mass.),  388; 


I 


§  150  THE   EISK   ASSUMED.  359 

the  wliole  loss,  and  is  (unless  the  policy  otherwise  provides) 
all  covered  by  a  fire  policy,  where  part  of  a  loss  is  due  to  an 
explosion,  and  part  is  caused  by  a  fire  resulting  therefrom.® 
But  damage  to  a  building  by  concussion,  caused  by  an  ex- 
plosion of  gunpowder  in  another  building  which  resulted 
from  a  fire,  is  not  within  a  policy  of  insurance  against  fire.^'^ 
The  destruction  of  merchandise  by  blowing  up  a  building  by 
gunpowder,  to  prevent  the  spread  of  a  conflagration,  is  a 
peril  insured  against  if  the  building  would  otherwise  have 
burned. -^^ 

The  Description  of  the  Risk  Insured  Against. 

Only  that  will  be  held  to  be  insured  which  is  fairly  included 
within  the  description  contained  in  the  policy.  When  the 
terms  of  the  policy  are  clear  as  to  the  property  insured,  and 
risk  insured  against,  they  cannot  be  varied  by  proof,  but  parol 
evidence  is  admissible  to  prove  the  identity  of  the  property 
covered  by  the  policy,  if  the  description  be  ambiguous.^^  If 
the  description  of  the  property  is  definite,  evidence  will  not 
be  admitted  in  an  action  at  law  to  show  that  a  mistake  was 
made,  and  that  the  policy  was  intended  to  cover  other  prop- 
erty. ^•'^     Eeference  may  sometimes  be  had  to  the  application 

Lynn  Gas  &  Electric  Co.  v.  Meriden  Fire  Ins,  Co.,  158  Mass.  570,  20 
L.  R.  A.  297. 

°  Scripture  v.  Lowell  Mut.  Fire  Ins.  Co.,  10  Cush.  (Mass.)  356,  57 
Am.  Dec.  111. 

"  Caballero  v.  Home  Mut.  Ins.  Co.,  15  La.  Ann.  217. 

^^  Greenwald  v.  Insurance  Co.,  3  Phila.  (Pa.)  323;  City  Fire  Ins. 
Co.  V.  Corlies,  21  Wend.  (N.  Y.)  367.  See,  also,  Beakes  v.  Phoenix 
Ins.  Co.,  143  N.  Y.  402,  26  L.  R.  A.  267. 

^=  Graham  v.  Firemen's    Ins.  Co.,   2    Disn.   (Ohio)    255;     Soli    v. 
Farmers'  Mut.  Ins.  Co.,  51  Minn.  24,  52  N.  W.  979;    Roots  v.  Cin- 
cinnati Ins.   Co.,   1    Disn.    (Ohio)    138;    Lycoming  Mut.  Ins.  Co.  v.' 
Sailer,  67  Pa.  St.  108;   Weisenberger  v.  Harmony  F.  &  M.  Ins.  Co., 
56  Pa.  St.  442. 

"Holmes  v.  Charlestown  Mut.  Fire  Ins,  Co.,  10  Mete.  (Mass.)  211. 


360  THE   OONTKACT   AND   ITS   INCIDENTS.  §  150 

to  prove  the  identity  of  the  property  covered  ;^^  or  to  usage 
and  custom.-'^  A  policy  upon  property  described  only  as 
"property  in  freight  buildings"  will  not  cover  articles  of 
the  kind  specified  in  the  policy  to  be  not  insured,  unless  by 
special  agreement.  ^^  The  policy  may  attach  to  and  cover 
property  acquired  subsequently  to  its  delivery. ^'^  Lumber 
sold,  and  piled  on  docks,  and  marked  with  the  purchaser's 
name,  and  to  be  removed  at  once,  is  covered  by  a  policy  on 
property  sold  but  not  delivered. ^^  A  hay  press  used  on  a 
farm  is  a  "farming  utensil,"  but  if  situated  in  a  stock-yard, 
at  a. distance  from  a  building,  is  not  covered  by  a  policy  on 
"farming  utensils  in  buildings  on  premises."  ^^  "Binding 
twine"  is  covered  by  a  policy  on  implements  and  goods  kept 
for  sale  in  a  general  implement  store. ^*^  Where  insurance 
is  effected  on  buildings  occupied  as  stores  and  shoe  factory, 
an  exception  from  the  policy  of  "store  fixtures"  does  not 
except  fixtures  in  the  factory.  ^^  Insurance  on  fixtures  does 
not  cover  chairs.^^  Milk-cans  are  included  in  a  policy  on 
a  creamery  building  and  merchandise,  materials,  supplies  and 
packages.  ^^     The  term  "grain"  includes  broom  corn  in  the 

"  Menk  v.  Home  Ins.  Co.,  76  Cal.  50,  14  Pac.  837. 

"Mason  v.  Skurray,  2  Bos.  &  P.  (N.  R.)  213,  note;  1  Park,  Ins. 
245. 

"  Com.  V.  Hide  &  Leather  Ins.  Co.,  112  Mass.  136. 

"  Davis  V.  New  England  Fire  Ins.  Co.,  70  Vt.  217,  39  Atl.  1095. 

"Michigan  Pipe  Co.  v.  Michigan  F.  &  M.  Ins.  Co.,  92  Mich.  482, 
20  L.  R.  A.  277.  See  Wunderlich  v.  Palatine  Fire  Ins.  Co.,  104  Wis. 
382,  395,  80  N.  W.  467,  471. 

'"Phoenix  Ins.  Co.  v.  Stewart,  53  111.  App.  273;  Benton  v.  Farmers' 
Mut.  Fire  Ins.  Co.,  102  Mich.  281. 

2°  Davis  V.  Anchor  Mut.  Fire  Ins.  Co.,  96  Iowa,  70,  64  N.  W.  687. 

"Thurston  v.  Union  Ins.  Co.,  17  Fed.  127. 

'^Manchester  Fire  Assur.  Co.  v.  Feibelman,  118  Ala.  308,  23  So. 
759,  27  Ins.  Law  J.  855. 

"Cronin  v.  Fire  Ass'n  of  Philadelphia,  112  Mich.  106,  70  N.  W. 
448. 


'I  150  THE    RISK   ASSUMED.  361 

bale,  but  not  baled  panicles  from  which  the  seed  has  been 
threshed.  ^■^  Furniture  stored  in  a  hotel,  for  use  in  connection 
with  it,  is  covered  bj  insurance  upon  the  hotel  and  furniture, 
but  excepting  goods  held  on  storage.^^  Grain  in  stacks  does 
not  include  un threshed  grain  in  a  mow  in  a  barn.^^  A 
policy  covering  property  of  the  insured  "providing  the  prop- 
erty hereby  insured  is  on  premises  owned  and  occujjied  by 
it"  does  not  cover  property  on  premises  held  by  the  insured 
Tinder  a  lease.  ^^ 

Household  Furniture. 

The  term  "household  furniture"  includes  all  articles  usually 
found  suitable,  necessary  and  convenient  for  housekeeping.-'* 
Furniture  belonging  to  a  hotel,  and  stored  for  use  in  con- 
nection with  it,  is  not  within  an  exception  of  "goods  held  on 
storage."  ^^ 

Dwelling  and  Buildings. 

A  carriage  house  and  stable  is  covered  by  a  policy  "on  two- 
•story  frame  dwelling  and  addition  thereto,  with  shingle  roof, 
u5ed  as  a  dwelling,"  etc.,  where  they  are  under  the  same  roof 
•and  over  the  carriage  house  is  a  bed  room  occupied  by  a  hired 

"Reavis  v.  Farmers'  Miit.  Fire  Ins.  Co.,  78  Mo.  App.  14. 

"Continental  Ins.  Co.  v.  Pruitt,  65  Tex.  125. 

'"  Benton  v.  Farmers'  Mut.  Fire  Ins.  Co.,  102  Mich.  281. 

''  Providence  &  W.  R.  Co.  v.  Yonkers  Fire  Ins.  Co.,  10  R.  I.  74. 
See  furttier,  on  this  question,  Soli  v.  Farmers'  Mut.  Ins.  Co.,  51 
Minn.  24,  52  N.  W.  979;  Hood  v.  Manhattan  Fire  Ins.  Co.,  11  N.  Y. 
532; 'Hews  v.  Atlas  Ins.  Co.,  126  Mass.  389;  Hanover  Fire  Ins.  Co.  v. 
Mannasson,  29  Mich.  316;  Boright  v.  Springfield  F.  &  M.  Ins.  Co., 
34  Minn.  352;  Cargill  v.  Millers'  &  M.  Mut.  Ins.  Co.,  33  Minn.  90; 
Everett  v.  Continental  Ins.  Co.,  21  Minn.  76;  Com.  v.  Hide  & 
Leather  Ins.  Co.,  112  Mass.  136. 

''Reynolds  v.  Iowa  &  N.  Ins.  Co.,  80  Iowa,  563;  Huston  v.  State 
Ins.  Co.,  100  Iowa,  402,  69  N.  W.  674. 

'« Continental  Ins.  Co.  v.  Pruitt,  65  Tex.  125;  Clarke  v.  Firemen's 
Ins.  Co.,  18  La.  431. 


362  THE    CONTRACT    AND    ITS    INCIDENTS.  §  150 

man.^^  "Stock  contained  in  a  chair  factory"  covers  stock 
contained  in  the  various  buildings  that  together  constitute  the 
factory.^  ^  A  policy  on  "gin-house  and  contents,"  describing 
the  property  insured  as  "cotton,  ginned  and  unginned,  baled 
and  unbaled,  in  cotton  house  adjacent  to  gin-building,"  covers 
cotton  in  the  gin-house  building,  as  well  as  that  in  the  building 
adjacent  to  the  gin-house.^^  A  policy  upon  a  house  covers^ 
the  cellar  wall  of  the  house.^^  A  policy  covering  all  furni- 
ture contained*  in  a  "certain  brick  building,  and  additions 
attached,"  includes  furniture  in  a  frame  building  on  the  next 
lot,  extending  over  and  against  the  rear  of  the  brick  building 
and  used  in  connection  therewith  as  a  store-house,  where 
there  is  no  other  building  attached  or  connected.^^  Whether 
counters  and  shelving  in  the  insured  building  are  covered  by 
a  policy,  depends  upon  whether  they  are  movable  or  immov- 
able fixtures.^^  Insurance  for  a  period  of  years,  effected 
upon  a  mill-building  and  machinery,  while  in  process  of  con- 
struction, covers  the  property  when  completed  as  contemplated 
by  the  parties  when  the  contract  was  made.^^  The  descrip- 
tion "three-story  granite  building"  may  designate  a  building 
with  a  granite  front  only,  and  three  stories  high  in  front  and 
rear,  though  only  one  story  high  in  the  middle.^'^     Insurance 

'"Hannan  v.  Williamsburgh  City  Fire  Ins.  Co.,  81  Mich.  556; 
White  V.  Mutual  Fire  Assur.  Co.,  8  Gray  (Mass.),  566. 

'^  Liebenstein  v.  Baltic  Fire  Ins.  Co.,  45  111.  301. 

5- Boyd  V.  Mississippi  Home  Ins.  Co.,  75  Miss.  47,  21  So.  708,  2S 
Ins.  Law  J.  532;  Missouri,  K.  &  T,  Ry.  Co. -v.  Union  Ins.  Co.  (Tex, 
Civ.  App.),  39  S.  W,  975, 

^^  Ervin  v.  New  York  Cent.  Ins.  Co.,  3  N.  Y.  Sup.  Ct.  213. 

'*  Maisel  v.  Fire  Ass'n  of  Philadelphia,  59  App.  Div.  461,  69  N.  Y. 
Supp.  181. 

^'  Capital  City  Ins.  Co.  v.  Caldwell,  95  Ala.  77,  10  So.  355. 

="■  Frost's  D.  L.  &  W.  W.  Works  v.  Millers'  &  M.  Mut.  Ins.  Co.,  37 
Minn.  300. 

^'^  Medina  v.  Builders'  Mut.  Fire  Ins.  Co.,  120  Mass.  225;  Carr  v. 
Hibernia  Ins.  Co.,  2  Mo.  App.  466. 


§  150  THE    KISK   ASSUMED.  363 

on  a  dwelling  house  covers  a  heater  built  and  bricked  in.^^ 

A  "warehouse,  used  in  connection  with  an  elevator  buihling 

from  which  grain  is  transferred  through,  spouts  extending 

from  one  to  the  other,  is  within  the  description  "steam-power 

elevator  building,  and  additions."^^     "Buildings  adjoining 

and   communicating,     *     *     ^     situated   detached"   means 

buildings  detached  from  other  buildings,  and  not  from  each.'*^ 

"Stock  and  tools  contained  in  a  five-story  building"  includes 

stock  contained  in  the  cellar  of  the  building. ^^     A  policy  on 

a  brick  building  attaches  to  the  building  as  such,  and  not  to 

the  materials  composing  the  building.     Where  a  building, 

by  reason  of  overloading,  or  defect  in  the  construction,  falls, 

and  fire  subsequently  occurs  in  the  ruins,  the  insurers  are  not 
liable.^2 

Stock  and  Incidents. 

The  term  "stock  in  trade"  when  used  as  a  matter  of  descrip- 
tion in  an  insurance  policy,  includes,  besides  the  materials 
used  in  the  business,  everything  necessary  for  carrying  on  that 
business ;  ^^  and  entitles  the  insured  to  carry  articles  properly 
belonging  to  his  business,  although  these  may  be  forbidden  by 
special  provisions  of  a  policy.^*  "Grain  in  stack  and  gran- 
ary" includes  flax  seed,  and  a  stack  of  flax  raised  for  the 

^  Adams  v.  Greenwich  Ins.  Co.,  9  Hun  (N.  Y.),  45. 

^»  Cargill  V.  Millers'  &  M.  Mut.  Ins.  Co.,  33  Minn.  90. 

*^  Broadwater  v.  Lion  Fire  Ins.  Co.,  34  Minn.  465.  See,  also, 
Allen  V.  Lafayette  Ins.  Co.,  34  La.  Ann.  763;  Commercial  Fire  Ins. 
Co.  V.  Allen,  80  Ala.  571;  German- American  Ins.  Co.  v.  Commercial 
Fire  Ins.  Co.,  95  Ala.  469,  11  So.  117;  Fair  v.  Manhattan  Ins.  Co., 
112  Mass.  320. 

"  Benedict  v.  Ocean  Ins.  Co.,  31  N.  Y,  389. 

^  Nave  V.  Home  Mut.  Ins.  Co.,  37  Mo.  430. 

"Wall  V.  Howard  Ins.  Co.,  14  Barb.  (N.  Y.)  383;  Harper  v. 
Albany  Mut.  Ins.  Co.,  17  N.  Y.  194 ;  Planters'  Mut.  Ins.  Co.  v.  Engle, 
52  Md.  468;   Phoenix  Ins.  Co.  v.  Favorite,  49  111.  259. 

"Steinbach  v.  La  Fayette  Fire  Ins.  Co.,  54  N.  Y.  90;  Hall  v.  In- 


36J:  THE   CONTKACT   AND   ITS   INCIDENTS.  §  150 

seed.^^  A  policy  covering  mercliandise  kept  for  sale  covers 
the  additions  to  it  made  from  time  to  time,  as  well  as  the 
goods  on  hand  at  the  time  of  its  issue.^^  A  policy  on  live 
stock  situated  on  a  certain  farm,  covers  a  horse  obtained 
after  issuance  of  the  policy,  in  exchange  for  one  then  owned. '*^ 
The  term  "merchandise"  covers  property  intended  for  use, 
as  well  as  that  intended  for  sale ;  ^^  and  all  things  which  may 
reasonably  be  supposed  within  the  contemplation  of  the  par- 
ties at  the  time  the  policy  was  issued,  and  which  are  commonly 
used,  found,  or  sold  in  connection  with  the  business,  or  inci- 
dent to  it.^^  A  policy  covering  "fixed  and  movable  machin- 
ery, engine  lathes  and  tools"  covers  also  patterns  used  in 
molding  castings  in  connection  with  the  business.  The  word 
"machinery"  includes  all  the  tools  and  implements  used  in 
connection  with  it.^^  Insurance  on  a  manufactory  will  in- 
surance Co.  of  North  America,  58  N.  Y.  292;  Pindart  v.  King's 
County  Fire  Ins.  Co.,  36  N.  Y.  648. 

*'  Hewitt  V.  Watertown  Fire  Ins.  Co.,  55  Iowa,  323. 

"Manchester  Fire  Assur.  Co.  v.  Feibelman,  118  Ala.  308,  23  So. 
759,  27  Ins.  Law  J.  855;  American  Cent.  Ins.  Co.  v.  Rothschild,  82 
III.  166;  AVhitwell  v.  Putnam  Fire  Ins.  Co.,  6  Lans.  (N.  Y.)  166. 

^^  Mills  V.  Farmers'  Ins.  Co.,  37  Iowa,  400. 

*^  Hartwell  v.  California  Ins.  Co.,  84  Me.  524. 

**  Firemen's  Fund  Ins.  Co.  v.  Western  Refrigerating  Co.,  162  111. 
322,  44  N.  E.  746;  Georgia  Home  Ins.  Co.  v.  Allen,  119  Ala.  436,  28 
Ins.  Law  J.  199,  24  So.  399;  Western  Assur.  Co.  v.  Ray  (Ky.),  49 
S.  W.  326;  Spratley  v.  Hartford  Ins.  Co.,  1  Dill.  392,  Fed.  Cas.  No. 
13,256;  Franklin  Fire  Ins.  Co.  v.  Hewitt,  3  B.  Mon.  (Ky.)  231. 
Compare  Kent  v.  Liverpool  &  L.  Ins.  Co.,  26  Ind.  294;  Burgess  v.  Alli- 
ance Ins.  Co.,  10  Allen  (Mass.),  221;  Bassell  v.  American  Fire  Ins. 
Co.,  2  Hughes,  531,  Fed.  Cas.  No.  1,094;  Getchell  v.  Aetna  Ins.  Co., 
14  Allen  (Mass.),  325;  Citizens'  Ins.  Co.  v.  McLaughlin,  53  Pa.  St. 
485;  Rafel  v.  Nashville  M.  &  F.  Ins.  Co.,  7  La.  Ann.  244;  North 
American  Fire  Ins.  Co.  v.  Throop,  22  Mich.  146. 

^"Lovewell  v.  Westchester  Fire  Ins.  Co.,  124  Mass.  418;  Buchanan 
V,  Exchange  Fire  Ins.  Co.,  61  N.  Y.  26;  Houghton  v.  Watertown 
Fire  Ins.  Co.,  131  Mass.  300;  Seavey  v.  Central  Mut.  Fire  Ins.  Co., 
Ill  Mass.  540. 


§  150  THE   KISK   ASSUMED.  ^  365 

elude  fixtures  and  machinery,  and  the  incidents  thereto.^* 
Smoked  meats  taken  from  a  smoke-house  to  a  storage  room^ 
as  fast  as  they  are  cured,  are  contents  of  a  smoke-house  within 
the  meaning  of  a  policy,  in  separate  sums,  upon  a  butchei- 
shop  and  its  contents,  and  the  smoke-house  and  its  contents, 
where  the  manner  of  conducting  the  business  was  under- 
stood by  both  parties  when  the  insurance  was  effected.^  ^ 

Goods  in  Trust. 

A  stock  of  goods  in  the  hands  of  an  agent,  for  sale  on  ac- 
count of  the  owner,  is  held  in  trust  by  the  agent,  within  the 
meaning  of  a  policy  of  insurance  covering  property  owTied  or 
held  in  trust  by  him.^^  "]\rerchandise  held  in  trust"  by  ware- 
housemen, is  goods  entrusted  to  them  for  keeping,  in  the 
mercantile  sense  of  the  term.^^  It  includes  goods  held  by  one 
as  bailee,^^  and  goods  in  pawn,^^  and  goods  left  with  the  in- 
sured for  sale  or  for  rent.^"^ 

Location  of  Insured  Property. 

The  location  of  the  property  insured  is  important,  and  as 
a  rule  the  insured  must  show  that  the  property  destroyed  was, 
at  the  time  of  the  fire  in  the  locality  or  place  designated  in  the 

"Sims  V.  State  Ins.  Co.,  47  Mo.  54;  Peoria  M.  &  F.  Ins.  Ck>.  v. 
Lewis,  18  111.  553. 

"  Graybill  v.  Penn.  Township  Mut.  Fire  Ins.  Ass'n,  170  Pa.  St.  75. 

=^' Roberts  v.  Firemen's  Ins.  Co.,  165  Pa.  St.  55;   Farmers'  L.  &  T. 
Co.  V.  Harmony  F.  &  M.  Ins.  Co.,  51  Barb.  (N.  Y.)  33. 
-    "Home  Ins.  Co.  v.  Baltimore  Warehouse  Co.,  93  U.  S.  527;   John- 
son V.  Campbell,  120  Mass.  449;   Grandin  v.  Rochester  German  Ins. 
Co.,  107  Pa.  St.  26;  Thomas  v.  Cummiskey,  108  Pa.  St.  354. 

"Beidelman  v.  Powell,  10  Mo.  App.  280. 

=«Rafel  V.  Nashville  M.  &  F.  Ins.  Co.,  7  La.  Ann.  244. 

"  Snow  V.  Carr,  61  Ala.  363.  See,  also,  First  Nat.  Bank  of  Waxa- 
hachie  v.  Lancashire  Ins.  Co.,  62  Tex.  461;  Mitchell  Furniture  Co. 
V.  Imperial  Fire  Ins.  Co.,  17  Mo.  App.  627;  Lucas  v.  Liverpool  &  L. 
&  G.  Ins.  Co.,  23  W.  Va.  258;  Strohn  v.  Hartford  Fire  Ins.  Co.,  35 
Wis.  648;  Waring  v.  Indemnity  Fire  Ins.  Co.,  45  N.  Y.  606. 


366  THE   CONTKACT   AND    ITS    IXCIDENT8.  §  150 

policy.  But  where  a  misdescription  of  the  locality  is  the  re- 
sult of  the  negligence  or  mistake  of  the  insurer,  without 
the  knowledge  or  consent  of  the  insured,  this  fact  may  be 
proved  in  an  action  on  the  policy,  without  having  it  re- 
formed.^^  Insurance  on  the  "contents"  of  a  building,  de- 
scribing them  in  no  other  way,  will  hot  cover  the  articles  then 
contained  in  the  building,  after  they  are  removed  and  stored 
elsewhere  ;^^  and  a  policy  on  a  "steam  fire  engine,  hose-pipe, 
and  hose-cart,  wliile  located  and  contained  in  the  fire  engine 
house,  and  not  elsewhere,"  does  not  cover  such  property  while 
being  used  in  an  attempt  to  extinguish  a  fire  elsewhere. ^°  If 
the  contract  limits  the  liability  of  the  insured,  by  describing 
the  property  as  contained  in  a  particular  location,  the  courts 
cannot  extend  the  rights  of  the  insured,  nor  the  liability  of  the 
insurer.®^ 

AVords  descriptive  of  location,  may,  as  to  one  class  of  prop- 
erty, or  as  to  one  kind  of  insurance,  be  treated  as  a  statement 
of  a  fact  relating  to  the  risk,  and  as  amounting  to  a  condition 
or  stipulation  that  the  property  should  remain  there;  while 
as  to  another  class  of  property,  or  as  to  other  kinds  of  insur- 
ance, they  might  be  treated  as  merely  descriptive  for  the 
purposes  of  identification.     Kegard  must  always  be  had  to 

^Phenix  Ins,  Co.  v.  Allen,  109  Ind.  273,  10  N.  E.  85;  Germania 
Life  Ins.  Co.  v.  Lunkenheimer,  127  Ind.  536,  26  N.  E.  1082;  Baker 
V.  State  Ins.  Co.,  31  Or.  41,  48  Pac.  699,  27  Ins.  Law  J.  86;  Allen  v. 
Home  Ins.  Co.  (Cal.),  30  Ins.  Law  J.  711. 

"'  Benton  v.  Farmers'  Mut.  Fire  Ins.  Co.,  102  Mich.  281,  26  L.  R.  A. 
237;  First  Nat.  Bank  of  Waxahachie  v.  Lancashire  Ins,  Co.,  62  Tex. 
461. 

^''L'Anse  v.  Fire  Ass'n  of  Philadelphia,  119  Mich.  427,  78  N.  W. 
465,  43  L.  R.  A.  838. 

"Bahr  v.  National  Fire  Ins.  Co.,  80  Hun  (N.  Y.),  309;  Green  v. 
Liverpool  &  L.  &  G.  Ins.  Co.,  91  Iowa,  615;  English  v.  Franklin  Fire 
Ins,  Co.,  55  Mich.  273,  54  Am.  Rep.  377. 


§  150  THE   EISK   ASSUMED.  3()7 

the  facts,^2  ^^^  ^q  ^^i^^^  j^^^^gj.  ^  deemed  to  have,  been  w'ithin 
the  contemplation  of  the  parties  at  the  inception  of  the  con- 
tract.^^  Insurance  on  a  harvester  "operating  in  the  grain 
iiekls,  and  in  transit  from  place  to  place  in  connection  with 
the  hai-vesting/'  does  not  cover  loss  of  machine  while  stand- 
ing near  a  blacksmith  shop,  to  which  it  had  been  taken  for 
repairs,  from  a  place  where  it  was  stored,  with  intent  to  take 
it  from  the  shop  directly  to  the  grain  fields,  as  soon  as  it  was 
repaired.^^  Horses  insured  as  a  part  of  the  contents  of  a 
barn,  are  not  covered  bv  the  policy  while  outside  of  it.^^  A 
policy  on  stable  and  hacks  contained  therein  does  not  cover  a 
hack  in  a  repair  shop  one-eighth  of  a  mile  away,*^^  Under  a 
description  of  goods  in  the  store  part  of  a  building,  no  re- 
covery can  be  had  if  the  goods  be  removed  to  a  distant  part  of 
the  building,  used  for  other  purposes,  by  other  persons.'^''' 
Insurance  on  property  in  transit,  does  not  cover  it  after  de^ 
livery  upon  the  private  track  of  the  consignee.®^  The  words 
"contained  in,"  as  used  in  a  policy  of  insurance  with  refer- 
ence to  property  insured,  constitute  a  restriction  upon  the 
risk.^^     But  these  Avords  may  also  be  construed  to  be  merely 

•=' Niagara  Fire  Ins.  Co.  v.  Elliott,  85  Va.  962;  De  Graff  v.  Queen 
Ins.  Co.,  38  Minn.  501. 

*^Haws  V.  Fire  Ass'n  of  Philadelphia,  114  Pa.  St.  431;  Peterson  v. 
Mississippi  Valley  Ins.  Co.,  24  Iowa,  494,  95  Am.  Dec.  748. 

"  Mawhinney  v.  Southern  Ins.  Co.,  98  Cal.  184. 

*'  Farmers'  Mut.  Fire  Ins.  Co.  v.  Kryder,  5  Ind.  App.  430,  31  N.  E. 
851;  British-America  Assur.  Co.  v.  Miller,  91  Tex.  414,  44  S.  W.  60. 

°»  Bradbury  v.  Fire  Ins.  Ass'n  of  England,  80  Me.  396. 

'^Boynton  v.  Clinton  &  E.  Mut.  Ins.  Co.,  16  Barb.  (N.  Y.)  254; 
Harris  v.  Royal  Canadian  Ins.  Co.,  53  Iowa,  236. 

"  Crew-Levick  Co.  v.  British  &  Foreign  Marine  Ins.  Co.,  77  Fed. 
858. 

'°  Maryland  Fire  Ins.  Co.  v.  Gusdorf,  43  Md.  506;  Lyons  v.  Provi- 
dence Wash.  Ins.  Co.,  14  R.  I.  109,  51  Am.  Rep.  364;  Hews  v.  Atlas 
Ins.  Co.,  126  Mass.  389;  Sampson  v.  Security  Ins.  Co.,  133  Mass.  49; 
Lycoming  County  Ins.  Co.  v.  Updegraff,  40  Pa.  St.  311;  Liebenstein 
V.  Aetna  Ins.  Co.,  45    111.  303;     North    American    Fire    Ins.  Co.  v. 


368  THE    CONTRACT    AND   ITS    INCIDENTS.  §  150 

descriptive  of  the  risk,  and  not  a  promissory  stipulation,  or 
a  condition  tliat  the  location  shall  remain  unchanged.  The 
question  often  is  not  so  much  as  to  the  binding  effect  of  the 
description  of  the  property,  or  the  location,  as  it  is  what  place 
or  premises  the  description  is  intended  to  cover,  and  as  to  the 
interpretation  which  will  best  effectuate  the  evident  intention 
of  the  parties  to  the  contract  at  the  time  of  making  it.'^°  In- 
surance on  a  horse  against  loss  by  lightning  while  in  use  on 
the  owTier's  farm,  is  not  limited  to  a  loss  happening  on  the 
f  ami  owned  by  the  insured  when  the  insurance  was  effected  ;'^^ 
and  insurance  on  a  phaeton,  described  as  "contained  in  a 
barn,"  has  been  held  to  cover  it  while  at  a  carriage  shop  for 
repairs."^ 

Explosion. 

Insurance  against  loss  by  fire  includes  all  loss  from  ex- 
plosions which  are  the  direct  result  of  an  antecedent  fire, 
unless  the  provisions  of  the  policy  specifically  exempt  the  in- 

Throop,  22  Mich.  146,  7  Am.  Rep.  638;  Towne  v.  Fire  Ass'n  of  Phila- 
delphia, 27  111.  App.  433. 

'"Sawyer  v.  Dodge  County  Mut.  Ins.  Co.,  37  Wis.  503;  Haws  v. 
Fire  Ass'n  of  Philadelphia,  114  Pa.  St.  431;  Minneapolis  Threshing 
Mach.  Co.  V.  Firemen's  Ins.  Co.,  57  Minn.  35,  23  L.  R.  A.  576;  Soli 
V.  Farmers'  Mut.  Ins.  Co.,  51  Minn.  24;  De  Graff  v.  Queen  Ins,  Co., 
38  Minn.  501. 

"  Boright  V.  Springfield  F.  &  M.  Ins.  Co.,  34  Minn.  352;  Peterson  v. 
Mississippi  Valley  Ins.  Co.,  24  Iowa,  494. 

"McCluer  v.  Girard  F.  &  M.  Ins.  Co.,  43  Iowa,  349;  Longue- 
ville  V.  Western  Assur.  Co.,  51  Iowa,  553;  Trade  Ins.  Co.  v.  Barra- 
cliff,  45  N.  J.  Law,  543.  See,  also,  Noyes  v.  Northwestern  Nat.  Ins. 
Co.,  64  Wis.  415,  54  Am.  Rep.  631,  where  a  company,  which  had  as- 
sured a  dolman  as  wearing  apparel,  and  described  by  the  policy  as 
contained  in  a  designated  dwelling  house,  was  held  liable  for  its 
loss  while  at  a  store  for  repairs;  and  Niagara  Fire  Ins.  Co.  v.  El- 
liott, 85  Va.  962,  where  carriages,  described  in  a  policy  as  contained 
in  a  certain  building,  used  for  livery  stables,  were  held  to  be  cov- 
ered while  in  the  shop  for  repairs,  Everett  v.  Continental  Ins.  Co.,. 
21  Minn.  76. 


§  150  THE    RISK    ASSUMED.  369 

surer  from  loss  and  damage  caused  by  explosion.'^^  Where 
the  policy  provides  that  the  insurer  is  not  to  be  liable  for  any 
loss  which  occurs  by  explosion,  it  has  been  decided  in  several 
instances  that  the  insurer  is  not  liable  for  any  loss  by  fire 
which  occurs  by  reason  of  the  explosion.'^ ^  But  in  Commer- 
cial Ins.  Co.  V.  Robinson/^  it  was  held  that  the  condition 
secured  the  exemption  from  loss  caused  by  explosion,  but  not 
from  liability  for  loss  by  fire  caused  by  explosion.  Under  a 
stipulation  that  there  should  be  no  liability  for  loss  by  light- 
ning or  explosion  unless  fire  ensues,  and  then  for  loss  or  dam- 
age by  fire  only,  the  insurer  is  liable  for  loss  resulting  from 
an  explosion  caused  by  a- fire  Avhich  broke  out  in  the  insured 
premises. '^^  An  exemption  from  liability  for  loss  by  explo- 
sions of  any  kind,  does  not  include  a  loss  of  a  property  in- 
sured by  fire  resulting  from  the  explosion  of  a  lighted  lamp.'^'^ 
Where  a  policy  provides  that  the  insurer  shall  not  be  liable 
for  loss  caused  by  explosion  of  any  kind,  unless  fire  ensues, 
and  then  for  loss  by  fire  only,  and  an  explosion  destroys  the 
building,  after  which  a  fire  occurs,  the  insurer  is  only  liable 
for  the  loss  caused  by  the  fire.*^*  Damage  caused  by  the  ex- 
plosion of  a  cloud  of  starch  dust,  arising  from  starch  in  a 
dextrine  kiln,  upon  which  a  stream  from  an  extinguisher  is 
turned  in  an  attempt  to  put  out  the  fire,  which  is  burning  in 
some  charged  starch  in  the  kiln,  is  a  loss  by  fire,  and  is  not 

"Renshaw  v.  Fireman's  Ins.  Co.,  33  Mo.  App.  394;  Commercial 
Ins.  Co.  V.  Robinson,  64  111.  265. 

'*Briggs  V.  North  American  &  M.  Ins.  Co.,  53  N.  Y.  446;  United 
L.  F.  &  M.  Ins.  Co.  v.  Foote,  22  Ohio  St.  340;  Mutual  Ins.  Co.  v. 
Tweed,  7  Wall.  (U.  S.)  44. 

"  64  111.  265. 

'» Washburn  v.  Miami  Valley  Ins.  Co.,  2  Fed.  633. 

"  Heffron  v.  Kittanning  Ins.  Co.,  132  Fa.  St.  580. 

''Briggs  V.  North  American  &  M.  Ins.  Co.,  53  N.  Y.  446;  Briggs  v. 
North  British  Met-cantile  Ins.  Co.,  66  Barb.  (N.  Y.)   325. 

KERR,  INS.—  24 


370  THE   CONTRACT    AND    ITS    IXCIDENTS.  §  150 

covered  by  a  policy  of  insurance  against  explosion  and  acci- 
dent, which  expressly  excludes  liability  for  loss  or  damage 
by  fire,  resulting  from  any  cause  whatever."^^  Damage  to 
goods  by  an  explosion  of  gas  is  not  a  loss  by  fire,  within  the 
meaning  of  an  insurance  policy,  where  the  goods  were  not 
burned,  but  damaged  by  the  falling  of  a  floor  caused  by  the 
explosion,  although  the  explosion  was  produced  by  the  light- 
ing of  a  match. ^*^ 

As  to  explosions  caused  by  the  progress  of  a  precedent  fire, 
the  cases  generally  hold  that  where  a  fire,  the  effects  of  which 
are  covered  by  a  policy,  has  occurred,  and  is  in  progress,  and 
an  explosion  takes  place  as  a  result  of  the  fire,  thereby  in- 
creasing the  loss,  the  whole  damage  is  within  the  risk  insured, 
although  the  policy  exempts  the  insurer  from  liability  caused 
by  explosions.  But  it  is  otherwise  if  the  explosion  was  not 
caused  by  a  preceding  fire.^^  The  insurer  is  liable  for  the 
destruction  of  goods  caused  by  the  blowing  up  with  gun- 
powder of  the  building  in  which  they  were  situated,  by  order 
of  the  municipal  authorities,  for  the  purpose  of  preventing  a 

-  '"American  Steam  Boiler  Ins.  Co.  v.  Ctiicago  Sugar  Refining  Co. 
(C.  C.  A.),  57  Fed.  294. 

«"  Heuer  v.  Northwestern  Nat.  Ins.  Co.,  144  111.  393,  19  L.  R.  A.  594. 

**La  Force  v.  "Williams  City  Fire  Ins.  Co.,  43  Mo.  App.  518;  Trans- 
Atlantic  Fire  Ins.  Co.  v.  Dorsey,  56  Md.  70,  40  Am.  Rep.  403.  See, 
also,  as  to  loss  by  explosion,  John  Davis  &  Co.  v.  Insurance  Co.  of 
North  America,  115  Mich.  382,  73  N.  W.  393;  Scripture  v.  Lowell 
Mut.  Fire  Ins.  Co.,  10  Cush.  (Mass.)  356,  57  Am.  Dec.  Ill;  Caballero 
V.  Home  Mut.  Ins.  Co.,  15  La.  Ann.  217;  Waters  v.  Merchants' 
Louisville  Ins.  Co.,  11  Pet.  (U.  S.)  213;  Dows  v.  Faneuil  Hall  Ins. 
Co.,  127  Mass.  346,  34  Am.  Rep.  384;  Boatman's  F.  &  M.  Ins.  Co.  v. 
Parker,  23  Ohio  St.  85,  13  Am.  Rep.  228;  Imperial  Fire  Ins.  Co.  v. 
American  M.  U.  Exp.  Co.,  95  U.  S.  227;  Renshaw  v.  Missouri  State 
Mut.  F.  &  M.  Ins.  Co.,  103  Mo.  595,  23  Am.  St.  Rep.  904;  Hillier  v.  Al- 
legheny County  Mut.  Ins.  Co.,  3  Pa.  St.  470,  45  Am.  Dec.  656;  Lynn 
Gas  &  Electric  Co.  v.  Meriden  Fire  Ins.  Co.,  158  Mass.  570,  20  L.  R. 
A.  297. 


§  150  THE    RISK    ASSUMED.  371 

spread  of  the  conflagi'ation,  unless  specially  exempted  there- 
from.^^ 

Fallen  Walls  and  Building. 

If,  under  a  policy  providing  that  if  the  building  insured 
shall  fall,  except  by  fire,  the  insurance  shall  cease,  a  minor 
portion  of  the  walls  fall,  the  building  has  not  fallen  within 
the  meaning  of  the  policy,  and  if  destroyed  by  fire  while  in 
that  condition,  the  insurer  is  liable  for  the  loss.^^  Other- 
wise if  the  greater  portion  of  the  walls  fall  before  the  fire 
begins.^^  The  words  "if  a  building  shall  fall  except  as  a 
result  of  fire  the  insurance  by  this  company  shall  immediately 
oease  and  determine"  are  to  be  given  their  ordinary  meaning, 
and  so  long  as  the  building  stands,  no  matter  how  much  it 
may  be  damaged,  the  liability  of  the  insurer  remains.^^ 
Where  a  building  adjacent  to  the  one  insured  (the  wall  be- 
tween them  being  a  partition  wall)  caught  fire  and  was  par- 
tially consumed,  and  as  the  direct  result  of  such  fire  fell, 
carrying  with  it  the  partition  wall  and  a  part  of  the  insured 
building,  the  fall  of  the  insured  building  was  the  result  of, 
and  a  direct  loss  or  damage  by  fire,  although  no  part  of  it 
ignited  or  was  consumed.^® 

'^'City  Fire  Ins.  Co.  v.  Corlies,  21  Wend.  (N,  Y.)  367,  34  Am.  Dec. 
258;  Gfeenwald  v.  Insurance  Co.,  3  Phila.  (Pa.)  323;  Phillips  v. 
Protection  Ins.  Co.,  14  Mo.  220. 

"Breuner  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  51  Cal.  101,  21  Am. 
Rep.  703. 

«*Huck  V.  Globe  Ins.  Co.,  127  Mass.  306,  34  Am.  Rep.  373. 

^  Fireman's  Fund  Ins.  Co.  v.  Congregation  Rodeph  Sholom,  80 
111.  558. 

»» Ermentrout  v.  Girard  F.  &  M.  Ins.  Co.,  63  Minn.  305,  30  L.  R. 
A.  346.  See,  also,  Cuesta  v.  Royal  Ins.  Co.,  98  Ga.  720,  27  S.  E.  172; 
Teutonia  Ins.  Co.  v.  Beard,  74  111.  App.  496;  Lewis  v.  Springfield 
F.  &  M.  Ins.  Co.,  10  Gray  (Mass.),  159;  Nave  v.. Home  Mut.  Ins.  Co., 
37  Mo.  430. 


372  THE   COJSTTKACT   AND   ITS    INCIDENTS.  §   150 

Bemoval  of  Goods. 

Wliere  a  ]3olicj  requires  the  assured,  in  case  of  exposure  of 
goods  to  loss  or  damage  by  fire,  to  use  all  possible  diligence 
to  preserve  bis  goods,  and  provides  in  case  of  bis  failure  to 
do  so  tbat  tbe  insurer  sball  not  be  liable  for  tbe  consequences 
of  bis  neglect,  if  tbe  assured  removes  tbe  goods,  tbe  circum- 
stances at  tbe  time  of  tbe  removal  must  determine  tbe  neces- 
sity tberefor,  and  if  tbe  removal  was  justifiable  be  is  entitled 
to  recover  tbe  expense  of  removal,  and  consequent  loss  or 
damage. ^'^  Tbe  inquiry  sbould  be,  "wbat  was  prudent,  and 
seemingly  required,  on  tbe  part  of  tbe  insured,  from  tbe  im- 
pending peril  at  tbe  time  of  tbe  removal.^ ^ 

Loss  by  Lightning. 

Ligbtning,  in  its  ordinary  and  popular  meaning,  includes 
any  sudden  and  violent  discbarge  of  electricity,  occurring  in 
tbe  course  of  nature,  between  positively  and  negatively  elec- 
trified bodies,  usually  developing  in  its  course  tbe  pbenom- 
ena  of  ligbt,  beat,  and  disruptive  force.^^  In  tbe  absence  of 
stipulations  to  tbe  contrary,  damage  caused  by  ligbtning, 
wbicli  produces  ignition,  is  covered  by  an  insurance  against 
fire.  Otberwise  if  no  combustion  ensues.^^  Damages  on 
a  building  shattered  by  ligbtning,  and  tbe  destruction  of 
wbicb  is  completed  by  tbe  wind,  must  be  limited  to  tbe  direct 
loss  caused  by  ligbtning,  excluding  tbe  additional  damage, 

«'Case  V.  Hartford  Fire  Ins.  Co.,  13  111.  676,  3  Bennett  Fire  Ins. 
Cas.  349. 

^'Lieber  v.  Liverpool,  L.  &  G.  Ins.  Co.,  6  Bush  (Ky.),  639,  99  Am. 
Dec.  695.  See,  also,  White  v.  Republic  Fire  Ins.  Co.,  57  Me.  91,  2 
Am.  Rep.  22;  Cincinnati  Mut.  Ins.  Co.  v.  May,  20  Ohio,  212;  Bales- 
tracci  v.  Firemen's  Ins.  Co.,  34  La.  Ann.  844;  Holtzman  v.  Franklin 
Ins.  Co.,  4  Cranch,  C.  C.  295,  Fed.  Cas.  No.  6,649. 

*°  Spensley  v.  Lancashire  Ins.  Co.,  54  "Wis.  433. 

""  Kenniston  v.  Merrimack  County  Mut.  Ins.  Co.,  14  N.  H.  341,  40 
Am.  Dec.  193;  Babcock  v.  Montgomery  County  Mut.  Ins.  Co.,  4  N.  Y. 
326;  Scripture  v.  Lowell  Mut.  Fire  Ins.  Co.,  10  Cush.  (Mass.)  360. 


§  150  THE    JIISK    ASSUMED.  373 

where  the  policy  covers  damage  by  lightning,  and  expressly 
excludes  damage  by  cyclone,  tornado  or  wind  storm.^^  Dam- 
age caused  by  lightning  striking  a  powder  house,  which  ex- 
jolodes  and  destroys  the  insured  premises,  is  not  covered  by 
a  policy  against  damage  caused  by  lightning,  and  excluding 
,  loss  caused  by  explosion.^^ 

Damage  by  Water. 

The  insurer  is  liable  for  damage  caused  by  water  thrown 
or  used  in  an  endeavor  to  save  and  protect  the  insured  prop- 
erty,^^  but  not  for  damage  resulting  from  failure  of  the  in- 
sured to  properly  care  for  the  damaged  property  after  it  had 
been  wet,  wdiere  the  policy  requires  him  to  uSe  his  best 
endeavors  to  protect  the  pro2>erty  from  damage  at  and  after 
the  fire,  and  exempting  the  company  from  liability  caused  by 
his  failure  so  to  do.^'* 

Wind,  Tornado  and  Hurricane. 

A  policy  insuring  against  damage  by  lightning,  but  ex- 
pressly excluding  all  damage  by  cyclone,  tornado  or  wind 
storm,  does  not  cover  the  additional  damage  done  by  wind 
after  the  building  has  been  shattered  by  lightning.®^  It 
would  seem  within  the  rules  above  laid  down,  that  an  insurer 
will  be  liable  for  damage  caused  by  the  blowing  down  of  walls 
which  have  been  weakened  by  the  peril  insured  against ;  but 
the  contrary  has  been  held.®® 

»^  Beakes  v.  Phoenix  Ins.  Co.,  143  N.  Y.  402,  26  L.  R.  A.  267. 

»'  German  Fire  Ins.  Co.  v.  Roost,  55  Ohio  St.  581,  45  N.  E.  1097. 

°'  Whitehurst  v.  Fayetteville  Mut.  Ins.  Co.,  6  Jones  (N.  C),  352; 
Geisek  v.  Crescent  Mut.  Ins.  Co.,  19  La.  Ann.  297;  New  York  & 
B.  D.  Express  Co.  v.  Traders'  &  M.  Ins.  Co.,  132  Mass.  381.  But  see 
Cannon  v.  Phoenix  Ins.  Co.,  110  Ga.  563,  35  S.  E.  775. 

"^Sisk  V.  Citizens'  Ins.  Co.,  16  Ind.  App.  565,  45  N.  E.  804. 

^'  Beakes  v.  Phoenix  Ins.  Co.,  143  N.  Y.  402,  26  L.  R.  A.  267. 

"'' Gaskarth  v.  Law  Union  Fire  Ins.  Co.  (Manchester),  6  Ins.  Law 


37i  THE   CONTEACT   AND   ITS    INCIDENTS.  §  150 

Smoke. 

An  insurance  against  "all  direct  loss  or  damage  by  fire" 
does  not  cover  damage  arising  from  smoke  and  soot  escaping 
from  a  defective  stove-pipe,  and  coming  from  a  fire  intention- 
ally bnilt  in  a  stove,  and  kept  confined  therein;  nor  damage 
caused  by  water  nsed  in  cooling  the  ceiling,  heated  by  the 
pipe,  if  no  actual  ignition  takes  place,  unless  the  vp^ater  was 
necessary  to  prevent  ignition.^ '^  An  ordinary  fire  insurance 
policy  does  not  cover  a  loss  caused  by  steam  escaping  from  a 
break  in  a  steam  heating  apparatus.  The  word  fire  does  not 
include  heat  of  a  degree  too  low  to  cause  ignition.^^  But 
damage  done  by  smoke  resulting  from  actual  ignition  of  the 
insured  j)roperty,  would  be  the  direct  and  proximate  result 
of  fire. 

Loss  by  Theft. 

An  ordinary  fire  policy  covers  loss  by  theft  during  the  prog- 
ress of  a  fire  in  the  insured  building  ;^^  and  loss  by  theft, 
v/hich  occurs  during  a  necessary  and  prudent  removal  of 
goods  to  save  them  from  impending  destruction  from  a  fire  in 
the  adjoining  building. ^^*^  Sometimes  the  policy  expressly 
excludes  loss  by  theft  during  the  fire.-'*'-^  A  stipulation  that 
the  insurer  will  not  "be  liable  for  any  loss  or  damage  to  goods 
contained  in  the  show  window  when  the  loss  or  damage  is 
caused  by  the  light  in  the  show  window,  nor  shall-  the  com- 
pany be  liable  for  loss  by  theft,"  applies  to  theft  from  the  show 

J.  159.  See,  also,  Pelican  Ins.  Co.  v.  Troy  Co-operative  Ass'n,  77 
Tex.  225. 

"'  Cannon  v.  Phoenix  Ins.  Co.,  110  Ga.  563,  35  S.  E.  775. 

»'  Gibbons  v.  German  Ins.  &  Sav.  Institution,  30  111.  App.  263. 

""Tilton  V.  Hamilton  Fire  Ins.  Co.,  1  Bosw.  (N.  Y.)  367. 

'™  Newmark  v.  Liverpool  &  L.  F.  &  L.  Ins.  Co.,  30  Mo.  160,  77  Am. 
Dec.  608;  Whitehurst  v.  Fayetteville  Mut.  Ins.  Co.,  6  Jones  (N.  C), 
352;  Talamon  v.  Home  &  Citizens'  Mut.  Ins.  Co.,  16  La.  Ann.  426. 

"^Webb  V.  Protection  &  A.  Ins.  Co.,  14  Mo.  3;  Fernandez  v.  Mer- 
chants' Mut.  Ins.  Co.,  17  La.  Ann.  131. 


§  150  THE    EISK    ASSUMED.  375 

■windows,  and  not  to  theft  committed  in  the  necessary  removal 
of  the  goods,  to  save  them  from  an  impending  fire.^°^ 

Riot,  Mobs,  etc. 

An  exemption  from  liability  for  loss  by  fire  caused  by 
mobs  or  riots,  does  not  include  th&  destruction  of  a  bridge 
by  order  of  the  military  authorities  to  prevent  the  advance 
of  an  army;^°^  nor  the  burning  of  goods  to  prevent  them 
from  falling  into  the  hands  of  rebels.  ^°^  But  an  exemption 
from  liability  for  fire  which  happened  by  means  of  invasion 
or  military  or  usurped  power,  relieves  the  insurer  where  the 
property  is  seized  and  burned  by  rebels  ;^^^  or  by  a  mob  during 
a  riot.i°« 

Fraud  and  Negligence. 

The  doctrine  appears  to  be  well  settled  by  the  authorities 
that  a  loss  by  fire  occasioned  by  the  mere  fault  and  negligence 
of  the  insured  party,  his  servants  or  agents,  without  fraud, 
is  a  loss  protected  by  the  policy,  and  as  such  recoverable  from 

^°=Leiber  v.  Liverpool,  L.  &  G.  Ins.  Co.,  6  Bush  (Ky.),  639,  99  Am. 
Dec.  695.  The  value  of  insured  goods,  lost  or  stolen  while  being  re- 
moved from  a  burning  building,  may  be  recovered  in  an  action  on 
the  policy.  Independent  Mut.  Ins.  Co.  v.  Agnew,  34  Pa.  St.  96,  75 
Am.  Dec.  638. 

"^  Harris  v.  York  Mut.  Ins.  Co.,  50  Pa.  St.  341. 

^°*  Boon  V.  Aetna  Ins.  Co.,  40  Conn.  575. 

"=  Barton  v.  Home  Ins.  Co.,  42  Mo.  156,  97  Am.  Dec.  329. 

'""Langdale  v.  Mason,  2  Marshall,  Ins.  792.  See,  also,  on  this 
question,  Portsmouth  Ins.  Co.  v.  Reynolds*  Adm'r,  32  Grat.  (Va.) 
613;  Strauss  v.  Imperial  Fire  Ins.  Co.,  16  Mo.  App.  555,  94  Mo.  182, 
4  Am.  St.  Rep.  368;  Aetna  Fire  Ins.  Co.  v.  Boon,  95  U.  S.  117;  Lycom- 
ing Fire  Ins.  Co.  v.  Schwenk,  95  Pa.  St.  89,  40  Am.  Rep.  629;  Dupin 
V.  Mutual  Ins.  Co.,  5  La.  Ann.  482;  Germania  Fire  Ins.  Co.  v.  Deck- 
ard,  3  Ind.  App.  361,  28  N.  E.  868;  City  Fire  Ins.  Co.  v.  Corlies,  21 
Wend.  (N.  Y.)  367,  34  Am.  Dec.  258.  In  Field  v.  City  of  Des 
Moines,  39  Iowa,  575,  18  Am.  Rep.  46,  it  was  held  that  a  city  was  not 
liable  for  buildings  destroyed  by  its  officers,  to  prevent  the  spread 
of  a  fire. 


376  THE   CONTRACT   AND   ITS   INCIDENTS.  §  150 

the  insurer. ^°^  Generally  speaking,  before  negligence  is 
available  as  a  ground  of  defense,  there  must  be  evidence  of 
such  a  degree  of  negligence  as  will  evince  a  corrupt  de- 
sign. ^*^®  If,  however,  the  negligence  is  so  culpable  as  to 
amount  to  fraud  or  positive  misconduct,  the  insurer  is  not 
liable. ^°®^  An  insured  who  fails  to  put  out  a  fire  when  he  can, 
is  guilty  of  corrupt  negligence.  Where  he  prevents  others 
from  putting  it  out  he  is  guilty  of  such  fraudulent  misconduct 
as  will  prevent  a  recovery.  ^^*^  The  insurer  cannot  be  held 
for  damage  caused  by  the  negligence  of  the  insured,  where 
due  care  and  reasonable  effort  to  save  and  protect  from  damage 
are  required  of  him.-'^^ 

""' Waters  v.  Merchants'  Louisville  Ins.  Co.,  11  Pet.  (U.  S.)  213; 
General  Mut.  Ins.  Co.  v.  Sherwood,  14  How.  (U.  S.)  351,  3  Kent, 
Comm.  376;  Gove  v.  Farmers'  Mut.  Fire  Ins.  Co.,  48  N.  H.  41,  97 
Am.  Dec.  572. 

i°«Catlin  V.  Springfield  Fire  Ins.  Co.,  1  Sumn.  434,  Fed.  Cas.  No. 
2,522;  Hynds  v.  Schenectady  County  Mut.  Ins.  Co.,  16  Barb.  (N.  Y.) 
119j  Chandler  v.  Worcester  Mut.  Fire  Ins.  Co.,  3  Cush.  (Mass.)  328; 
Williams  v.  New  England  Mut.  Fire  Ins.  Co.,  31  Me.  219;  Huckins 
V.  People's  Mut.  Fire  Ins.  Co.,  31  N.  H.  238;  Franklin  Ins.  Co.  v. 
Humphrey,  65  Ind.  557;  Gates  v.  Madison  County  Mut.  Ins.  Co.,  5 
N.  Y.  469,  55  Am.  Dec.  360;  Mathews  v.  Howard  Ins.  Co.,  11  N.  Y.  9. 

1°=' Citizens'  Ins.  Co.  v.  Marsh,  41  Pa.  St.  386;  Gove  v.  Farmers' 
Mut.  Fire  Ins.  Co.,  48  N.  H.  41,  97  Am.  Dec.  572;  Western  Horse  & 
Cattle  Co.  V.  O'Neill,  21  Neb.  548;  Chandler  v.  Worcester  Mut.  Fire 
Ins.  Co.,  3  Cush.  (Mass.)  328,  and  cases  ante.  See,  also.  Perry  v. 
Mechanics'  Mut.  Ins.  Co.,  11  Fed.  478;  Feibelman  v.  Manchester  Fire 
Assur.  Co.,  108  Ala.  180,  19  So.  540;  Ellsworth  v.  Aetna  Ins.  Co.,  89 
N.  Y.  186;  Adair  v.  Southern  Mut.  Ins.  Co.,  107  Ga.  297,  45  L.  R.  A. 
204. 

""Phoenix  Ins.  Co.  v.  Mills,  77  111.  App.  546;  Willis  v.  Germania  & 
Hanover  Fire  Ins.  Co.,  79  N.  C.  285. 

"^Sisk  V.  Citizens'  Ins.  Co.,  16  Ind.  App.  565,  45  N.  E.  804;  Ells- 
worth V.  Aetna  Ins.  Co.,  89  N.  Y.  186;  Campbell  v.  Monmouth  Mut. 
Fire  Ins.  Co.,  59  Me.  430;  Wolters  v.  Western  Assur.  Co.,  95  Wis. 
265,  70  N.  W.  62;  Case  v.  Hartford  Fire  Ins.  Co.,  13  111.  676;  3  Ben- 
nett Fire  Ins.  Cas.  551;  Devlin  v.  Queen  Ins.  Co.,  46  Up.  Can.  Q.  B. 
611;  Leiber  v,  Liverpool,  L.  &  G.  Ins.  Co.,  6  Bush  (Ky.),  639,  99 
Am.  Dec.  695. 


11 


^  150  THE    EISK    ASSUMED.  377 

Life  and  Accident  Risks. 

The  Risk  —  Proximate  Cause. 

In  policies  of  insurance  against  perils  or  events  other  than 
fire,  the  same  rule  concerning  direct  and  immediate,  or  proxi- 
mate cause  and  result  obtains.  In  life  policies  the  liability 
of  the  insurer  is  usually  fixed  and  certain.  In  accident  poli- 
cies it  is  often  necessary  to  investigate  the  law  of  cause  and 
effect.  When  the  damage  in  any  particular  case  is  a  direct 
and  inevitable  consequence  of  the  occurrence  of  the  peril  in- 
sured against,  the  insurers  are  liable,  though  the  immediate 
agent  was  not  such  peril.  All  the  consequences  flowing  from 
the  peril  insured  against,  or  incident  thereto,  are  properly 
attributable  to  the  peril  itself.  Thus,  if  a  physical  condition 
is  the  result  of  an  accident  which  makes  necessary  a  surgical 
operation  resulting  in  death,  the  accident,  and  not  the  opera- 
tion, is  the  proximate  cause  of  death. ^^^  A  pistol  Avound 
■causing  tetanus,  with  great  bodily  pain,  and  delirium  or  fever, 
may  be  found  to  be-  the  proximate  cause  of  death,  Avhere  a 
person  insured  against  accidents,  excluding  suicide,  sane  or 
insane,  cuts  his  throat  in  a  period  of  delirium  or  state  of  frenzy 
which  is  uncontrollable.^^^  So  death  from  apoplexy,  result- 

'"  Travelers'  Ins.  Co.  v.  Murray,  16  Colo.  296. 

"=•  Travelers'  Ins.  Co.  v.  Mellck  (C.  C.  A.),  65  Fed.  178.  In  tbe 
opinion,  Judge  Sanborn  said:  "In  this  case  the  sequence  of  events 
is  neither  unnatural  nor  improbable,  and  the  chain  of  causation 
seems  to  us  unbroken.  It  was  not  unnatural  nor  improbable  that 
the  shot-wound  in  the  foot  should  produce  great  pain  and  fever. 
It  was  not  unnatural  nor  improbable  that  it  should  produce  tetanus, 
and  that  tetanus  should  produce  uncontrollable  pain,  fever,  and 
delirium.  It  was  neither  unnatural  nor  improbable  that  a  man  in 
the  torture  of  uncontrollable  agony,  and  in  a  delirium  or  fever, 
should  be  irresistibly  impelled  to  do  himself  an  injury  in  an  at- 
tempt to  abate  his  suffering,  or  that  if  he  was  a  physician,  and  fa- 
miliar with  the  use  of  a  scalpel,  near  at  hand,  he  should  seize  and 
use  that  to  relieve  his  pain.     *    *     *  -phe  jury    *     *    *    might  well 


378  THE    CONTRACT    AND    ITS    INCIDENTS.  §  150 

ing  from  external,  visible  and  bodily  injury,  occasioned  by 
an  accident,  is  the  result  of  such  accident.  •^■^^  And  death 
from  blood  poisoning,  if  the  result  of  the  inoculation  of  some 
substance  into  a  wound  at  the  time  of  an  accident  which 
causes  the  wound,  is  the  result  of  the  accident. -^^^  The  as- 
sault on  a  woman  by  a  drunken  man  who  is  killed  by  her  hus- 
band in  defending  her,  is  the  proximate  cause  of  his  death, 
Avithin  a  stipulation  excepting  liability  for  death  in  violation 
of  law.^^^  And  engaging  in  a  horse  race  is  the  proximate 
cause  of  the  death  of  one  killed  in  a  collision  during  the 
race;^-''^  and  an  accidental  fall,  causing  peritonitis  which 
results  in  death  is  the  proximate  cause  of  the  death.^^^ 

Accidental  death  by  drowning  is  caused  indirectly  by  dis- 
ease, within  the  meaning  of  an  exception  against  death  caused 
directly  or  indirectly  by  disease,  if  the  drowning  is  the  re- 
sult of  a  fall  into  the  water,  and  the  fall  is  the  result  of  the 

find  that  the  shot-wound  was  the  efficient  cause 'which  set  in  mo- 
tion the  train  of  events  that  in  their  natural  sequence  produced  the 
cutting  and  the  death,  the  causa  causans,  without  which  neither 
would  have  been.  *  *  *  j^  the  absence  of  the  shot-wound,  the 
cutting  would  never  have  been.  That  was  dependent  entirely  for  its 
existence  and  for  its  effect  upon  the  original  accident,  and  was  a 
mere  link  in  the  chain  of  causation  between  that  and  the  death. 
The  intervening  cause  that  will  prevent  a  recovery  for  a  death 
which  resulted  from  an  accidental  bodily  injury,  indemnified  against 
by  contract,  must  be  a  new  and  independent  cause,  which  interrupts 
the  natural  sequence  of  events,  turns  aside  their  course,  prevents  the 
natural  and  probable  result  of  the  original  accidental  injury,  and 
produces  a  different  result  that  could  not  reasonably  be  anticipated. 
It  may  not  be  a  mere  effect  of  that  injury,  produced  by  it,  and  de- 
pendent upon  it  for  both  its  existence  and  its  effect," — citing  Mil- 
waukee &  St.  P.  Ry.  Co.  V.  Kellogg,  94  U.  S.  469. 

'"  National  Ben.  Ass'n  v.  Grauman,  107  Ind.  288,  7  N.  E.  233. 

"'Martin  v.  Equitable  Ace.  Ass'n,  61  Hun  (N.  Y.),  467. 

"« Bloom  V.  Franklin  Life  Ins.  Co.,  97  Ind.  478,  49  Am.  Rep.  469. 

"'Travellers'  Ins.  Co.  v.  Seaver,  19  Wall.  (U.  S.)  531. 

"'  Freeman  v.  Mercantile  Mut.  Ace.  Ass'n,  156  Mass.  351,  17  L.  R. 
A.  753. 


§  150  THE   RISK   ASSUMED.  379 

disease. ^^^  But  intoxication  is  not  necessarily  the  proximate 
cause  of  the  death  of  one  who  is  killed  by  being  thrown  from  a 
wagon  while  intoxicated. ^^^  One  killed  after  he  has  desisted 
from  an .  encounter,  and  while  he  was  retreating,  does  not  die 
in  violation  of  law.^-^  Where  one  is  trying  to  take  a  team  of 
horses  from  another  for  debt,  and  is  killed  in  so  doing,  the 
question  of  proximate  cause  is  for  the  jury.^^^ 

An  employe  of  a  railway  company,  while  going  home  im- 
mediately after  quitting  work,  is  still  in  the  discharge  of  his 
duties,  and  in  the  ser\ice  of  the  company,  within  the  meaning 
of  a  contract  insuring  him  while  in  the  discharge  of  his  duty.^^^ 
If  t^\^  parties  willingly  engage  in  an  encounter,  death  re- 
sulting therefrom  is  not  covered  by  an  accident  policy  whicli 
excepts  from  the  risks  death  or  injury  caused  by  a  fight. ^^* 
The  words  "total  and  permanent  loss  of  sight  of  both  eyes,'* 
mean  the  loss  of  eyesight  which  the  insured  had  Avhen  the 
policy  was  written.  ^^^  The  tearing  off  of  three  fingers,  and 
part  of  another,  and  the  cutting  of  the  hand,  destroying  the 
joint  of  the  thumb,  may  be  found  by  a  jury  to  constitute  a  loss 
of  the  hand  within  the  meaning  of  an  accident  policy.  ^^"^ 
Where  the  provisions  of  a  policy  have,  prior  to  its  issuance, 

""Manufacturers'  Ace.  Ind.  Co.  v.  Dorgan  (C.  C.  A.),  58  Fed.  945. 

'■-"  National  Ben.  Ass'n  v.  Bowman,  110  Ind.  355. 

'^'  Harper's  Adm'r  v.  Phoenix  Ins.  Co.,  19  Mo.  506. 

^--  Bradley  v.  Mutual  Ben.  Life  Ins.  Co.,  45  N.  Y.  422. 

'-'Kinney  v.  Baltimore  &  O.  E.  R.  Ass'n,  35  W.  Va.  385,  15  L.  R. 
A.  142. 

'^*  Gresham  v.  Equitable  Ace.  Ins.  Co.,  87  Ga.  497,  13  L.  R.  A.  83S. 

'"Humphreys  v.  National  Ben.  Ass'n,  139  Pa.  St.  264,  11  L.  R.  A.- 
564.  Compare  Maynard  v.  Locomotive  E.  Mut.  Life  &  Ace.  Ins. 
Ass'n,  16  Utah,  145,  51  Pac.  259,  27  Ins.  Law  J.  208. 

''^Lord  V.  American  Mut.  Ace.  Ass'n,  89  Wis.  19.  As  to  loss  of  foot, 
see  Stevers  v.  People's  Mut.  Ace.  Ins.  Ass'n,  150  Pa.  St.  132,  16  L.  R. 
A.  446;  two  entire  feet,  Sheanon  v.  Pacific  Mut.  Life  Ins.  Co.,  77 
Wis.  618,  9  L.  R.  A.  685;  loss  of  sight  of  both  eyes,  Humphreys  v. 
National  Ben.  Ass'n,  139  Pa.  St.  264,  11  L.  R.  A.  564. 


380  THE   CONTRACT   AND   ITS    INCIDENTS.  §  150 

"been  given  a  uniform  judicial  construction  by  tlie  courts 
of  last  resort  of  several  states,  it  will  be  presumed  that  that 
interpretation  of  the  contract  was  intended  by  the  parties  to 
it.^^^  An  injury  received  by  a  workman  in  iron  and  steel 
works,  though  caused  by  the  negligence  of  an  independent 
crew  engaged  in  erecting  an  addition  to  the  works  where  ho 
was  employed,  is  included  within  the  liability  under  a  policy 
■covering  injuries  in  "all  operations  connected  with  the  busi- 
ness of  iron  and  steel  works."  ^^^  The  term  "voluntary  over- 
•exertion"  means  conscious  or  intentional  over-exertion,  or  a 
reckless  disregard  of  the  probable  consequences  of  the  act.^^^ 
A  certificate  of  membership  in  an  organization  guaranteeing 
payment  of  a  given  sum  in  case  of  death  or  total  disability, 
will  be  construed  as  an  ordinary  contract  of  insurance  against 
death  and  total  disability  from  whatever  cause. ^^^ 

Accident. 

The  word  "accident,"  when  used  to  express  a  result  pro- 
duced by  human  action,  is  generally  understood  to  mean  a 
thing  done,  or  a  condition  caused  or  produced  without  de- 
sign, or  unintentional.  It  includes  any  event  w^hich  takes 
place  without  the  foresight  or  expectation  of  the  person 
acted  upon  or  affected  thereby.  It  is  an  imexpected  event, 
which  happens  as  by  chance,  or  which  does  not  take  place 
according  to  the  usual  course  of  things.  "Accidental"  sig- 
nifies happening  by  chance,  or  unexpectedly,  taking  place 
not  according  to  the  usual  course  of  things,  casual,  fortui- 
tous; the  opposite  of  "accident"  is  design,  volition,  intent. 
The  term  "accidental"  is  used  in  insurance  in  its  ordinary, 

>"  Fidelity  &  Casualty  Co.  v.  Lowenstein  (C.  C.  A.),  97  Fed.  17. 
"^  Hoven  v.  Employers'  Liability  Assur.  Corp.,  93  Wis.  201. 
""  Rustin  V.  Standard  Life  &  Ace.  Ins.  Co.,  58  Neb.  792,  79  N.  W. 
712,  46  L.  R.  A.  253. 

"» Murdy  v.  Skyles,  101  Iowa,  549,  70  N.  W.  714. 


§  150  THE    EISK   ASSUMED.  381 

popular  sense.  If  a  result  is  sucli  as  follows  from  ordinary 
means,  voluntarily  employed,  in  a  not  unusual  way,  it  can- 
not be  called  a  result  effected  by  accidental  means.  But  if^ 
in  the  act  which  precedes  an  injury,  something  unforeseen^, 
unexpected,  unusual,  occurs  which  produces  injury,  then  the 
injury  has  resulted  from  accidental  means. ^-"^^  It  may  in- 
clude an  injury  received  in  a  common-law  affray,  without 
the  fault  of  the  person  injured. ^^^  ^j^^  injury  not  antici- 
pated, and  not  naturally  to  be  expected  by  the  insured,  though 
intentionally  inflicted  by  another,  is  accidental  ;^^^  and  death 
by  hanging  at  the  hands  of  a  mob;^^'*  and  an  abrasion  of  the 
skin  of  a  toe,  unexpectedly  caused  by  the  wearing  of  a  new 
shoe;^^^  and  an  involuntary  death  by  drowning  ;^^*'  and  the 
death  of  a  person  who  is  shot  by  one  whom  he  is  trying  to 
eject  by  force  from  a  hotel  office,  where  the  deceased  made 
the  attempt  witliout  knowledge  that  the  aggressor  was 
araied;^^'^  and  death  resulting  from  the  excitement  of  a 
runaway  ;^^^  and  death  from  blood-poisoning  superinduced 
by  the  sting  of  an  insect.  ^-^^     But  the  death  of  one  caused 


">  United  States  Mut.  Ace.  Ass'n  v.  Barry,  131  U.  S.  100;  Bostwick 
V.  Stiles,  35  Conn.  198;  Schneider  v.  Provident  Life  Ins.  Co.,  24  Wis. 
30;  Paul  v.  Travelers'  Ins.  Co.,  112  N.  Y.  472,  20  N.  E.  349;  North 
American  L.  &  A.  Ins.  Co.  v.  Burroughs,  69  Pa.  St.  43;  Railway- 
Officials'  &  Employees'  Ace.  Ass'n  v.  Drummond,  56  Neb.  235,  76 
N.  W.  562,  50  Cent.  Law  J.  5. 

"'  Supreme  Council,  O.  C.  F.,  v.  Garrigus,  104  Ind.  133. 

"=  Accident  Ins.  Co.  of  North  America  v.  Bennett,  90  Tenn.  256. 

"'  Fidelity  &  Casualty  Co.  v.  Johnson,  72  Miss.  333,  30  L.  R.  A.  206. 

""Western  Commercial  Travelers'  Ass'n  v.  Smith    (C.  C.  A.),  85. 
Fed.  401. 

""  Peele  v.  Provident  Fund  Soc,  147  Ind.  543,  44  N.  E.  661. 

"^  Lovelace  v.  Travelers'  Protective  Ass'n,  126  Mo.  104. 

""  McGlinchey  v.  Fidelity  &  Casualty  Co.,  80  Me.  251. 

"» Omberg  v.  United  States  Mut.  Ace.  Ass'n,  101  Ky.  303,  40  S.  W. 
909. 


382  THE    CONTRACT    AND    ITS    INCIDENTS.  §  150 

bj  a  duel  is  not  accidental  ;^^°  nor  death  resulting  from  a  rup- 
ture of  an  artery  caused  by  one  attempting  to  close  a  win- 
dow, if  he  did  not  fall,  slip,  or  lose  liis  balance. ^^^  The 
death  of  a  horse  was  not  caused  by  disease  or  accident,  where 
it  was  suffering  from  an  incurable  disease,  and  was  killed 
two  hours  before  the  expiration  of  the  policy,  but  its  death 
was  not  required  as  an  act  of  mercy  to  relieve  its  suffer- 
ing. ^^^  The  law  will  presume  that  an  injury  was  not  self- 
inflicted  ;'^^^  but  in  an  action  on  an  accident  policy  the  plain- 
tiff must  prove  by  preponderance  of  the  evidence  that  the 
injury  was  accidental,  because  the  policy  only  insures  against 
such  injury,  and  he  who  affirms  must  prove.  ■^'^^ 

""Taliaferro  v.  Travelers'  Protective  Ass'n,  80  Fed.  368,  49  U.  S. 
App.  27~5. 

"^  Feder  v.  Iowa  State  T.  M.  Ass'n,  107  Iowa,  538,  78  N.  W.  252. 

^^  Tripp  V.  Northwestern  Live  Stock  Ins.  Co.,  91  Iowa,  278,  59 
N.  W.  1.  See,  also,  Klopp  v.  Bernville  Live  Stock  Ins.  Co.,  1  Woodw. 
(Pa.)   445. 

"^  Carnes  v.  Iowa  State  T.  M.  Ass'n,  106  Iowa,  281,  76  N.  W.  683. 

"^Greenleaf,  Ev.  (13tli  Ed.)   83;  Travellers'  Ins.  Co.  v.  McConkey, 
127  U.  S.  661;  Whitlatch  v.  Fidelity  &  Casualty  Co.,  149  N.  Y.  45,  43' 
N.  E.  405. 

"A  person  might  voluntarily  and  knowingly  expose  himself  to  a 
contagious  disease,  or  to  excessive  heat  or  cold,  or  to  sudden' 
changes  of  temperature,  or  might  adopt  a  strange  diet  or  mode  of 
living,  but,  if  death  resulted,  it  would  not  be  due  to  an  accidental 
cause,  although  wholly  undesigned,  unforeseen,  and  unexpected.  So, 
if  a  person  suffering  from  some  weakness  or  disease  should  subject 
himself  to  conditions  which  would  not  injuriously  aifect  persons  in 
ordinary  health,  but  would  be  dangerous  to  him,  and  injury  result, 
it  would  not  be  due  to  an  accidental  cause.  For  example,  if  a  person 
having  a  diseased  heart  should  take  violent  exercise  voluntarily, 
and  death  should  result,  the  cause  would  not  be  accidental.  *  *  * 
Although  a  result  may  not  be  designed,  foreseen,  or  expected,  yet  if 
it  be  the  natural  and  direct  effect  of  acts  voluntarily  done,  or  of 
conditions  voluntarily  assumed,  it  cannot  be  said  to  be  accidental." 
Feder  v.  Iowa  State  T.  M.  Ass'n,  107  Iowa,  538,  78  N.  W.  252;  South- 
ard V.  Railway  Passengers'  Ass'n  Co.,  34  Conn.  574;  Bacon  v.  United 
States  Mut.  Ace.  Ass'n,  123  N.  Y.  304,  25  N.  E.  399. 


I 


§  150  THE    RISK   ASSUMED.  383 

External,  Violent,  and  Accidental  Means. 

Suicide  by  an  insane  person  is  -within  the  terms  of  a  policy 
insuring  against  bodily  injuries  effected  through  external, 
violent,  and  a'.cidental  means,  even  though  death  or  disa- 
bility by  suicide  of  self-inflicted  injuries  be  excepted;^'*' 
and  death  from  asphyxiation,  caused  by  deadly  gas  in  a 
shallow  well  into  which  the  assured  descends  to  fix  a  pump  i^"*® 
and  death  by  unconsciously  and  unintentionally  inhaling 
gas  while  asleep  ;^^'^  and  the  intentional  killing  of  one  by 
another  without  any  fault  or  expectation  of  the  former  ;^'*^ 
and  death  at  the  hands  of  a  mob;^^^  and  death  produced  by 
the  accidental  drinking  of  poison  ;^^*^  and  death  by  choking 
on  food,  which,  in  an  attempt  to  swallow  it,  accidentally 
passes  into  the  wind-pipe.  The  means  which  caused  the 
injury,  and  not  the  injury  itself,  are  referred  to.  It  must 
be  sho%vn  that  the  death  was  the  result  not  only  of  external 
and  violent,  but  of  accidental  means  as  well.^^^ 

Under  a  policy  insuring  against  bodily  injury  caused  by 

'« Accident  Ins.  Co.  v.  Crandal,  120  U.  S.  527.  Otherwise  if  the 
policy  exempted  death  by  his  own  hand,  sane  or  insane:  Streeter  v. 
Western  Union  Mut.  L.  &  A.  Soc,  65  Mich.  199,  31  N.  W.  779. 

""  Pickett  V.  Pacific  Mut.  Life  Ins.  Co.,  144  Pa.  St.  79,  13  L.  R.  A. 
661. 

"'Fidelity  &  Casualty  Co.  v.  Lowenstein  (C.  C.  A.),  97  Fed.  17. 

"'American  Ace.  Co.  v.  Carson,  99  Ky.  441,  36  S.  W.  169,  25  Ins. 
Law  J.  786. 

""Fidelity  &  Casualty  Co.  v.  Johnson,  72  Miss.  333. 

™  Healey  v.  Mutual  Ace.  Ass'n,  133  111.  556,  9  L.  R.  A.  371. 

•"American  Ace.  Co.  v.  Reigart,  94  Ky.  547.  See,  also,  Meyer  v. 
Fidelity  &  Casualty  Co.,  96  Iowa,  378,  65  N.  W.  328,  25  Ins.  Law  J. 
346  (injury  from  a  fall  due  to  a  temporary  and  unexpected  dis-' 
order)  ;  United  States  Mut.  Ace.  Ass'n  v.  Hubbell,  56  Ohio  St.  516, 
47  N.  E.  544  (death  by  accidental  drowning);  Omberg  v.  United 
States  Mut.  Ace.  Ass'n,  101  Ky.  303  (death  from  poison  caused  by 
sting  of  an  insect) ;  Standard  Life  &  Ace.  Ins.  Co.  v.  Schmaltz,  66 
Ark.  588,  53  S.  W.  49  (the  rupture  of  a  blood  vessel  in  the  stomach, 
causing  death,  and  resulting  from  a  sudden  wrench  of  the  body). 


3S-i  TUB    CONTKACT   AND    ITS    INCIDENTS.  §  150' 

external,  violent,  and  accidental  means,  in  case  of  death 
from  such  injuries  independent  of  all  other  canses,  and 
exempting  tlie  insurer  from  liability  for  injuries,  fatal  or 
otherwise,  resulting  wholly  or  in  part  from  poison,  or  any- 
thing accidentally  or  otherwise  taken,  administered,  or  in- 
haled, it  is  held  that  death  caused  by  blood-poisoning  from 
the  effects  of  the  absorption  into  the  system  of  septic  poison,, 
evolved  by  the  propagation  of  germs  in  cotton,  inserted  by  a 
dentist  in  wounds  caused  by  the  removal  of  the  teeth  from 
the  mouth  of  the  deceased,  to  stop  hemorrhage,  comes  within 
the  exception.^^- 

Sunstroke  or  heat  prostration  is  not  a  bodily  injury  sus- 
tained through  external,  violent  or  accidental  means,  where 
liability  from  disease  or  bodily  infirmity  is  excepted  ;^^^  nor 
death  from  a  germinal  disease  resulting  from  contact  of  the 
insured  with  putrid  animal  matter  ;^^^  nor  death  from  an 
over-dose  of  morphine,  intentionally  taken  ;'^^  nor  rupture 
caused  by  jumping  from  a  car,  where  the  act  is  voluntary  ;^^^ 
nor  death  resulting  from  an  epileptic  fit.^^^ 

Disease  and  Bodily  Infirmity. 

Death  from  a  malignant  pustule  caused  by  contact  with 
diseased  animal  matter,  is  death  from  disease.^^^  Likewise 
death  from   sunstroke   or  heat  prostration. ^^^     The   words 

^"Kasten  v.  Interstate  Casualty  Co.,  99  Wis.  73,  74  N.  W.  534; 
Early  v.  Standard  Life  &  Ace.  Ins.  Co.,  113  Mich.  58,  71  N.  W.  500; 
Westmoreland  v.  Preferred  Ace.  Ins.  Co.,  75  Fed.  244. 

^"  Dozier  v.  Fidelity  &  Casualty  Co.,  46  Fed.  446,  13  L.  R.  A.  114. 

'^^  Bacon  v.  United  States  Mut.  Ace.  Ass'n,  123  N.  Y.  304. 

"^Carnes  v.  Iowa  State  T.  M.  Ass'n,  106  Iowa,  281,  76  N.  W.  683. 

^'^^  Southard  v.  Railway  Passengers'  Assur.  Co.,  34  Conn.  574. 

'"  Tennant  v.  Travellers'  Ins.  Co.,  31  Fed.  322.  Compare  Larkin  v. 
Interstate  Casualty  Co.,  43  App.  Div.  365,  60  N.  Y.  Supp.  205. 

^'^  Bacon  v.  United  States  Mut.  Ace.  Ass'n,  123  N.  Y,  304. 

1^"  Dozier  v.  Fidelity  &  Casualty  Co.,  46  Fed.  446. 


§  150  THE    RISK   ASSUMED.  385 

"disease,"  or  "bodily  infirmity,"  as  used  in  an  accident  pol- 
icy exempting  the  insurer  from  injuries  caused  thereby, 
mean  practically  the  same  thing.  They  refer  to  an  ail- 
ment, or  disorder,  or  an  unhealthy  condition  resulting  from 
some  functional  disturbance,  which  tends  to  undermine  the 
constitution.  ^^^ 

Outward  and  Visible  Means  of  Injury. 

If  the  injury  is  visible  soon  after  an  accident,  and  is  the 
result  of  the  accident,  it  is  not  within  the  provision  exempt- 
ing the  insurer  from  injuries  "of  which  there  is  no  visible, 
external  mark  upon  the  body  of  the  insured  ;"^^^  as  where 
there  is  a  discoloration  of  the  arm  and  shoulder. -^^^ 

Total  Disability. 

Total  disability  must,  from  the  necessity  of  the  case,  be  a 
relative  matter,  and  must  depend  largely  upon  the  occupa- 

""Cushman  v.  United  States  Life  Ins.  Co.,  70  N.  Y.  72;  North 
Western  Mut.  Life  Ins.  Co.  v.  Heimann,  93  Ind.  24;  Pudritzky  v. 
Supreme  Lodge,  K.  of  H.,  ,76  Mich.  428,  43  N.  W.  373;  Meyer  v.  Fi- 
delity &  Casualty  Co.,  96  Iowa.  378,  65  N.  W.  328. 

For  definition  of  "sickness"  and  "good  health,"  see  Barnes  v.  Fi- 
delity Mut.  Life  Ass'n,  191  Pa.  St.  618,  43  Atl.  341 ;  Mutual  Life  Ins. 
Co.  V.  Simpson,  88  Tex.  333,  28  L.  R.  A.  765;  White  v.  Provident 
Sav.  Life  Assur.  Soc,  163  Mass.  108,  27  L.  R.  A.  398.  See,  also,  c.  11, 
"Warranties  and  Representations." 

1"^  Pennington  v.  Pacific  Mut.  Life  Ins.  Co.,  85  Iowa,  468,  52  N.  W. 
482,  45  Cent.  Law  J.  148,  39  Am.  St.  Rep.  306. 

''-  Thayer  v.  Standard  L.  &  A.  Ins.  Co.,  68  N.  H.  577,  41  Atl.  182. 
See,  also.  National  Ben.  Ass'n  v.  Grauman,  107  Ind.  288;  Railway 
Passenger  Assur.  Co.  v.  Burwell,  4  Bigelow,  L.  &  A.  Rep.  49;  Ste- 
phens V.  Railway  Oflacials'  &  Employes'  Ace.  Ass'n,  75  Miss.  84,  21 
So.  710,  26  Ins.  Law  J.  540;  Bayless  v.  Travellers'  Ins.  Co.,  14 
Blatchf.  143,  Fed.  Cas.  No.  1,138;  Rodey  v.  Travelers'  Ins.  Co.,  3 
N.  M.  316,  9  Pac.  348;  Paul  v.  Travelers'  Ins.  Co.,  112  N.  Y.  472,  20 
N.  E.  347;  United  States  Mut.  Ace.  Ass'n  v.  Newman,  84  Va.  52,  3 
S.  E.  805;  Eggenberger  v.  Guarantee  Mut.  Ace.  Ass'n,  41  Fed.  172. 

KERR,  INS.— 25 


38(5  THE    CONTEACT    AND    ITS    INCIDENTS.  §  150 

tion  and  employment  in  whicli  the  party  insured  is  en- 
gaged. One  who  labors  with  his  hands  might  be  so  dis- 
abled by  a  severe  injury  to  one  hand  as  not  to  be  able  to 
labor  at  all  at  his  usual  occupation,  whereas  a  merchant  or 
professional  man  might,  by  the  same  injury,  be  only  disabled 
from  prosecuting  some  kinds  of  business  pertaining  to  his 
occupation.  Total  disability  does  not  mean  absolute  phys- 
ical disability  on  the  part  of  the  insured  to  transact  any 
kind  of  business  pertaining  to  his  occupation.  Total  dis- 
ability exists  although  the  insured  is  able  to  perform  a  few 
occasional  acts,  if  he  is  unable  to  do  any  substantial  portion 
of  the  work  connected  with  his  occupation.  It  is  sufficient 
to  prove  that  the  injury  wholly  disabled  him  from  the  doing 
of  all  the  substantial  and  material  acts  necessary  to  be  done 
in  the  prosecution  of  his  business,  or  that  his  injuries  were 
of  such  a  character  and  degTee  that  common  care  and  pru- 
dence required  him  to  desist  from  his  labors  so  long  as  was 
reasonably  necessary  to  effect  a  speedy  eure.-^^^  Insanity 
of  the  insured  is  a  disability  ;^^'*  and  blindness.^^^ 

^"  Young  V.  Travelers'  Ins.  Co.,  80  Me.  244;  Bean  v.  Travelers'  Ins. 
Co.,  94  Cal.  581;  Ford  v.  United  States  Mut.  Ace.  Relief  Co.,  148 
Mass.  153;  Turner  v.  Fidelity  &  Casualty  Co.,  112  Mich.  425,  38  L. 
R.  A.  529;  Lobdill  v.  Laboring  Men's  Mut.  Aid  Ass'n,  69  Minn.  14, 
38  L,.  R.  A.  537;  Hohn  v.  Inter-State  Casualty  Co.,  115  Mich.  79,  72 
N.  W.  1105;  Ritter  v.  Preferred  Masonic  Mut.  Ace.  Ass'n,  185  Pa. 
St.  90,  39  Atl.  1117;  Moge  v.  Societe  De  Bienfaisance  St.  Jean  Bap- 
tiste,  167  Mass.  298,  35  L.  R.  A.  736  (blindness).  See,  also,  McKinley 
V.  Bankers'  Ace.  Ins.  Co.,  106  Iowa,  81,  75  N.  W.  670,  27  Ins.  Law  J. 
918;  Standard  L.  &  A.  Ins.  Co,  v.  Ward,  65  Ark.  295,  27  Ins.  Law  J. 
719,  45  S.  W.  1065;  Hart  v.  National  Masonic  Ace.  Ass'n,  105  Iowa, 
717,  75  N,  W.  508. 

"=' McCullough  V.  Expressman's  Mut.  Ben.  Ass'n,  133  Pa.  St  142, 
7  L.  R.  A.  210. 

iM  Moge  V.  Societe  De  Bienfaisance  St,  Jean  Baptiste,  167  Mass. 
298,  35  L.  R.  A.  736. 


§  150  THE    KISK   ASSUMED.  387 

Inhaling  Gas. 

"Inhalation  of  gas"  witliin  tlie  meaning  of  a  policy  ex- 
empting an  insurer  from  liability,  does  not  include  the  in- 
voluntary inhaling  of  a  deadly  gas  in  a  well  where  its 
presence  is  unsuspected.  ^^^  Death  caused  by,  unconsciously 
and  unintentionally  inhaling  gas  while  asleep  is  within  the 
terms  of  a  policy  insuring  against  injuries  through  external, 
violent,  and  accidental  means,  and  is  not  within  an  ex- 
ception of  injuries  resulting  from  poison  or  anything  acci- 
dentally or  otherwise  taken,  administered,  absorbed  or  in- 
haled. ^^'^  A  provision  exempting  the  insurer  from  liability 
for  death  or  injury  caused  by  inhalation  of  gas,  contem- 
plates a  voluntary  act  of  the  assured.  ^^^  Death  resulting  in 
part  from  suffocation,  consequent  upon  the  taking  of  chloro- 
form, administered  in  a  proper  manner  by  a  physician  to 
relieve  the  insured  from  pain,  is  ^\ithin  a  stipulation  that 
there  should  be  no  liability  for  injury  resulting  from  any- 
thing "accidentally  or  otherwise  taken,  or  resulting,  either 
directly  or  indirectly,  wholly  or  in  part  from  *  *  * 
medical  or  surgical  treatment." ^^^ 

Poison. 

Where  a  policy  provides  that  its  benefits  shall  not  extend 
to  any  bodily  injury  happening  directly  or  indirectly  from 
the  taking  of  poison,  there  can  be  no  recovery  where  the 

'"» Pickett  V.  Pacific  Mut.  Life  Ins.  Co.,  144  Pa.  St.  79;  Paul  v. 
Travelers'  Ins.  Co.,  112  N.  Y.  472.  But  see  Richardson  v.  Travelers' 
Ins.  Co.,  46  Fed.  843. 

'"Fidelity  &  Casualty  Co.  v.  Lowenstein  (CCA.),  97  Fed.  17,  46 
L.  R.  A.  450;  Fidelity  &  Casualty  Co.  v.  Waterman,  161  111.  632,  44 
N.  E.  283.  See,  contra,  McGlother  v.  Provident  Mut.  Ace.  Co.,  60 
U.  S.  App.  705,  89  Fed.  085;  Early  v.  Standard  L.  &  A.  Ins.  Co.,  113 
Mich.  58,  71  N.  W.  500. 

'•"Paul  V.  Travelers'  Ins.  Co.,  112  N.  Y.  472,  8  Am.  St.  Rep.  758. 

^"*  Westmoreland  v.  Preferred  Ace.  Ins.  Co.,  75  Fed.  244. 


388  THE    CONTRACT    AND    ITS    INCIDENTS.  §  150 

insured  died  from  the  effects  of  poison,  involuntarily  taken 
bv  mistake.^'''*' 

Violation  of  Law. 

An  insurance  company  is  not  relieved  from  liability  on 
a  policy  insuring  against  accidental  death,  except  when 
caused  by  an  injury  received  while  violating  the  law,  by  the 
fact  that  when  the  injury  was  received  the  insured  was  vio- 
lating the  law,  unless  such  violation  had  an  actual  connection, 
with  the  injury,  or  contributed  to  it.^'^^  Death  caused  from 
an  accident  received  by  an  insured  on  a  Sunday,  some  hours 
after  he  had  stopped  hunting,  and  some  distance  from  the 
place  where  he  was  hunting,  was  not  sustained  while  the  in- 
sured was  in  violation  of  a  law  making  it  an  offense  to  hunt 
on  Sunday,  and  within  the  meaning  of  a  stipulation  exempt- 
ing the  insurer  from  liability  if  the  accident  or  death  re- 

"°  Pollock  V.  United  States  Mut.  Ace.  Ass'n,  102  Pa.  St.  230;  Hill 
V.  Hartford  Ace.  Ins.  Co.,  22  Hun  (N.  Y.),  187;  Metropolitan  Aec. 
Ass'n  V.  Froiland,  161  111.  30,  43  N.  E.  766;  Early  v.  Standard  L.  & 
A.  Ins.  Co.,  113  Mich.  58,  71  N.  W.  500,  26  Ins.  Law  J.  820;  Mc- 
Glother  v.  Provident  Mut.  Ace.  Co.  (C.  C.  A.),  89  Fed.  685.  Compare- 
Healey  v.  Mutual  Ace.  Ass'n,  133  111.  556,  9  L.  R.  A.  371;  Bacon  v. 
United  States  Mut.  Ace.  Ass'n,  44  Hun  (N.  Y.),  599.  See,  also,  Cole  v. 
Accident  Ins.  Co.,  61  Law  T.  (N.  S.)  227;  Mutual  Ace.  Ass'n  v. 
Tuggle,  39  111.  App.  509;  Paul  v.  Travelers'  Ins.  Co.,  112  N.  Y.  472; 
Menneiley  v.  Employers'  Liability  Assur.  Corp.,  148  N.  Y.  596;  Fi- 
delity &  Casualty  Co.  v.  Waterman,  161  111.  632,  44  N.  E.  283;  Trav- 
elers' Ins.  Co.  V.  Dunlap,  160  111.  642;  Pickett  v.  Pacific  Mut.  Life 
Ins.  Co.,  144  Pa.  St.  79. 

'"Gross  V.  Miller,  93  Iowa,  72,  61  N.  W.  385;  Jones  v.  United 
States  Mut.  Ace.  Ass'n,  92  Iowa,  652,  61  N.  W.  485;  Conboy  v.  Rail- 
way Officials'  Employes'  Ace.  Ass'n  (Ind.  App.),  43  N.  E.  1017. 

Violation  of  criminal  law:  The  killing  of  a  person  by  the  dis- 
charge of  a  gun  which  he  was  carrying,  while  at  a  place  to  which 
he  had  gone  to  get  his  wife  to  return  home,  and  while  he  was  com- 
ing out  of  an  outdoor  closet,  into  which  he  had  gone  after  makings 
some  disturbance,  does  not  constitute  a  case  of  death  while  violating 
or  attempting  to  violate  any  criminal  or  penal  law,  although  he  may 


§  150  THE   RISK    ASSUMED.  389 

suited  directly  or  indirectly  from  violation  of  law.-^^^  But 
it  has  been  held  to  the  contrary. ^'^^ 

A  death  ensuing  in  the  commission  of  a  misdemeanor,  as 
where  horse  racing  is  a  misdemeanor,  is  caused  by  violation 
of  law.^'^^  The  suicide  of  an  alleged  fugitive  from  justice 
to  avoid  arrest,  is  not  a  death  in  violation  of  a  criminal 
law.^'^^  The  death,  by  suicide,  of  an  insured,  will  not  avoid 
the  policy,  under  a  provision  that  it  shall  be  void  if  the  in- 
sured die  in  violation  of,  or  in  an  attempt  to  violate,  any  crim- 
inal law,  although  the  attempt  to  commit  suicide  is  made  a 
crime,  if  the  statute  does  not  cover  the  case  of  crime  actually 
accomplished.  ^''^^  The  death  of  a  woman  resulting  from 
her  voluntary  submission  to  an  operation  intended  to  pro- 
duce an  al3ortion  is  a  violation  of  criminal  law;^'^''^  and  on 
grounds  of  public  policy  no  recovery  can  be  allowed.-^"^  And 
so  if  death  come  as  the  result  of  a  dtiel;^'^^  or  if  the  insured 
be  killed  while  committing  an  unprovoked  assault  upon  an- 

have  intended  to  use  violence  against  her  if  she  refused;  since  his 
act  in  going  into  and  coming  out  of  the  closet  was  in  no  manner  con- 
nected with  or  part  of  an  attempt  to  carry  out  any  criminal  pur- 
pose.   Supreme  Lodge,  K.  of  P.,  v.  Beck,  181  U.  S.  49,  21  Sup.  Ct.  532. 

"^  Prader  v.  National  Masonic  Ace.  Ass'n,  95  Iowa,  149,  63  N.  W. 
601. 

"'  Duran  v.  Standard  L.  &  A.  Ins.  Co.,  63  Vt.  437. 

1"*  Travellers'  Ins.  Co.  v.  Seaver,  19  Wall.  (U.  S.)  531.  See,  also, 
Bloom  V.  Franklin  Life  Ins.  Co.,  97  Ind.  478;  Overton  v.  St.  Louis 
Mut.  Life  Ins.  Co.,  39  Mo.  122,  90  Am.  Dec.  455;  Utter  v.  Travelers' 
Ins.  Co.,  65  Mich.  545,  32  N.  W.  812;  National  Ben.  Ass'n  v.  Bow- 
man, 110  Ind.  355,  11  N.  E.  316;  Accident  Ins.  Co.  of  North  America 
V.  Bennett,  90  Tenn.  256. 

"'  Kerr  v.  Minnesota  Mut.  Ben.  Ass'n,  39  Minn.  174. 

^■''  Darrow  v.  Family  Fund  Soc,  116  N.  Y.  537,  6  L.  R.  A.  495. 

"'  Wells  V.  New  England  Mut.  Life  Ins.  Co.,  191  Pa.  St.  207,  43  Atl. 
126. 

"*  Hatch  V.  Mutual  Life  Ins.  Co.,  120  Mass.  550;  Ritter  v.  Mutual 
Life  Ins.  Co.,  169  U.  S.  139. 

"» Overton  v.  St.  Louis  Mut.  Life  Ins.  Co.,  39  Mo.  122. 


390  THE    CONTRACT    AND    ITS    INCIDENTS.  §  150 

other   under    sucli    circumstances    as    rendered   tlie   killing 
justifiable  homicide.  •^^'^ 


Intentional  Injuries. 

An  exception  in  an  accident  insurance  policy  from  liability 
for  intentional  injury  inflicted  by  any  person,  will  relieve 
the  insurer  from  liability  for  an  intentional  assault  com- 
mitted by  another  upon  the  insured,  without  any  expecta- 
tion thereof  by  the  assured  ;^^^  but  not  if  the  Avound  be  in- 
flicted by  an  insane  person. ^^^  Whether  the  injury  or  assault 
be  intentional  must  be  found  from  the  surrounding  facts  and 
circumstances.  The  word  intentional,  in  such  a  connection, 
is  given  its  ordinary  meaning.  An  injury  was  intentional 
where  the  insured,  while  in  the  yard  near  a  window,  through 
which  he  made  an  unsuccessful  attempt  to  enter,  was  shot  by 
another  man  who  fired  out  of  the  window  ;^^^  or  where  the  as- 
sured is  waylaid,  and  assassinated  for  purposes  of  robbery.^^* 

Walking  on  Roadbed. 

A  level  beaten  path  of  ten  feet  between  railroad  tracks  is 
not  part  of  the  road  bed  within  the  terms  of  a  policy  barring 
recovery  for  injury  or  death  while  upon  a  railroad  road  bed.-^^^ 

''"Wolff  V.  Connecticut  Mut.  Life  Ins.  Co.,  5  Mo.  App.  236.  See, 
also,  Murray  v.  New  York  Life  Ins.  Co.,  96  N.  Y.  614;  Utter  v. 
Travelers'  Ins.  Co.,  65  Mich.  545,  32  N.  W.  812;  Griffin  v.  Western 
Mut.  Benev.  Ass'n,  20  Neb.  620;  Bradley  v.  Mut.  Ben.  Life  Ins.  Co., 
45  N.  Y.  422;  Bloom  v.  Franklin  Life  Ins.  Co.,  97  Ind.  478. 

"'Travellers'  Ins.  Co.  v.  McConkey,  127  U.  S.  661;  Ging  v.  Travel- 
ers' Ins.  Co.,  74  Minn.  505,  77  N.  W.  291;  Butero  v.  Travelers'  Ace. 
Ins.  Co.,  96  Wis.  536,  7i  N.  W.  811;  Brown  v.  United  States  Casualty 
Co.,  88  Fed.  38. 

'«=  Berger  v.  Pacific  Mut.  Life  Ins.  Co.,  88  Fed.  241. 

1S3  orr  V.  Travelers'  Ins.  Co.,  120  Ala.  647,  24  So.  997. 

"*  Hutchcraft's  Ex'r  v.  Travelers'  Ins.  Co.,  87  Ky.  300,  12  Am.  St. 
Rep.  484. 

'^'  Meadows  v.  Pacific  Mut.  Life  Ins.  Co.,  129  Mo.  76,  31  S.  W.  578. 


§  150  THE   RISK   ASSUMED.  391 

Siicli  a  clause  does  not  cover  an  injury  received  by  a  passenger 
tlirough  stepping  off  a  railway  train,  and  falling  into  or 
through  a  concealed  hole.-^^^  Where  a  policy  provides  that  it 
does  not  cover  injuries  resulting  from  walking  or  being  on  a 
road  bed  and  further  provides  for  a  commutation  of  indemnity 
in  case  the  insured  be  injured  in  an  exposure  or  occupation 
classed  by  the  company  as  more  hazardous  than  that  in  which 
the  insured  was  engaged,  when  the  insured  is  injured  while  on 
a  road  bed  he  cannot  take  advantage  of  the  latter  clause  unless 
he  was  within  the  class  of  employes  excepted  from  the  terms 
of  the  proviso. ^^'^  Otherwise  if  he  be  classed  as  a  railway 
employe. -^^^ 

Murder. 

Murder  is  classed  as  an  intentional  injury,  if  committed  by 
a  sane  person.^^^  The  killing  of  the  insured,  by  an  insane 
beneficiary,  under  such  circumstances  that  it  would  be  murder 
if  the  beneficiary  was  sane,  does  not  forfeit  the  policy,  nor  bar 
a  suit  for  recovery.  ^^^  One  cannot  recover  insurance  money 
pa_yable  to  him  upon  the  death  of  a  party  whose  life  he  has 
feloniously  taken,  any  more  than  he  could  recover  insurance 
money  upon  a  building  which  he  has  wilfully  burned.  The 
law  will  not  allow  one  to  reap  a  benefit  from  his  own  criminal 
act.^^^  The  murder  of  a  person  whose  life  is  insured,  by 
an  assignee  of  the  policy,  whose  claim  to  it  is  valid  only  for  the 
reimbursement  of  premiums  paid,  forfeits  only  the  assignee's 

'^  Burkhard  v.  Travellers'  Ins.  Co.,  102  Pa.  St.  262. 

"'  Yancey  v.  Aetna  Life  Ins.  Co.,  108  Ga.  349,  33  S.  E.  979. 

"'  Keene  v.  New  England  Mut.  Ace.  Ass'n,  164  Mass.  170. 

'''  See  ante,  notes  181,  182. 

"">  Holdom  V.  A.  O.  U.  W.,  159  111.  619. 

""  New  York  Mut.  Life  Ins.  Co.  v.  Armstrong,  117  U.  S.  599;  Riggs 
V.  Palmer,  115  N.  Y.  506.  See,  also,  Shellenberger  v.  Kansom,  41 
Neb.  631. 


392  THE   CONTRACT   AND   ITS   INCIDENTS.  §  150 

part  of  tlie  insurance,  and  not  the  residue  thereof. '^^^  Tho 
murder  of  an  insured  bj  a  beneficiary,  forfeits  the  rights  not 
only  of  the  beneficiary,  but  of  his  assigTiee.  But  the  insurer 
is  not  exempted  from  liability  merely  because  the  beneficiary's 
rights  are  thus  forfeited.  The  policy  may  be  enforced  by 
the  administrator  of  the  assured,  for  the  benefit  of  his  estate, 
on  the  ground  of  a  resulting  trust  created  in  favor  of  the 
estate  by  the  forfeiture  of  the  rights  of  the  beneficiary 
named.  ^^'^ 

Intemperance. 

The  test  between  sobriety  and  inebriety  is  the  effect  pro- 
duced by  the  use  of  liquors.-'^*     Under  a  policy  conditioned  to 
be  void  if  the  insured  become  so  far  intemperate  as  to  seriously 
or  permaaiently  impair  his  health,  no  degree  of  intemperance , 
will  defeat  recovery  unless  it  clearly  has  that  effect  ^^^ 

The  term  "intemperate"  has  reference  to  a  customary  or 
habitual  use  of  liquors.  Whether  a  person  is  habitually 
intemperate  is  a  question  of  fact  to  be  determined  by  a  jury.^^® 
A  condition  forfeiting  a  policy  if  the  assured  shall  become 
so  far  intemperate  as  to  impair  his  health  seriously  or  per- 
manently, or  induce  delirium  tremens,  contemplates  more 
than  an  occasional  excessive  indulgence.  It  refers  to  his 
customary  conduct,  to  pursue  which  he  has  acquired  a  tend- 
ency from  frequent  repetition  of  the  same  acts.-^^''^     A  pro- 

"^New  York  Life  Ins.  Co.  v.  Davis,  96  Va.  737,  32  S.  E.  475,  44 
L.  R.  A.  305. 

"'Schmidt  v.  Northern  Life  Ass'n  (Iowa),  83  N.  W.  800,  51  L.  R. 
A.  141. 

"*  McGinley  v.  United  States  Life  Ins.  Co.,  77  N.  Y.  495. 

"=  Odd  Fellows  Mut.  Life  Ins.  Co.  v.  Rohkopp,  94  Pa.  St.  59. 

""Northwestern  Life  Ins.  Co.  v.  Muskegon  Bank,  122  U.  S.  501; 
Van  Valkenburgh  v.  American  Popular  Life  Ins.  Co.,  70  N.  Y.  605. 

"'Davey  v.  Aetna  Life  Ins.  Co.,  20  Fed.  482;  Aetna  Life  Ins.  Co.  v. 
Deming,  123  Ind.  384;  Union  Mut.  Life  Ins.  Co.  v.  Reif,  36  Ohio  St. 
596. 


§  150  THE   RISK   ASSUMED.  393 

vision  that  a  policy  shall  be  void  if  the  death  of  the  insitred  is 
caused  by  the  use  of  intoxicating  drink  or  oiiium,  means  that 
the  things  prohibited  should  be  the  direct  cause  of  death.  ^'^^ 
An  occasional  use  of  liquors  or  opium,  is  not  to  be  deemed 
intemperance.  The  indulgence  must  be  excessive  and  ha- 
bitual. ^^^ 

Death  at  the  Hand  of  Justice. 

Even  if  this  risk  were  not  excepted,  or  were  specially  cov- 
ered, it  would  be  against  public  policy  to  permit  a  recovery  in 
such  case-^^*^ 

Accidents  on  Public  or  Private  Conveyance,  Trains,  etc. 

A  policy  conditioned  that  it  should  not  cover  injuries 
received  while  entering,  trying  to  enter,  or  leaving  a  moving 
steam  vehicle,  does  not  insure  against  an  accident  received 
while  attempting  to  get  on  a  moving  railway  train.  ^°^  An 
injury  received  by  a  traveler  in  the  course  of  a  journey,  while 
walking  between  a  steamboat  and  a  railway  station,  is  not 
caused  or  received  "while  traveling  by  public  or  private  con- 
veyance."^^^  Injuries  received  "while  actually  riding  upon 
a  public  conveyance  in  compliance  with  all  the  rules  and  reg- 

"» Mutual  Life  Ins.  Co.  v.  Stibbe,  46  Md.  302. 

""Mowry  v.  Home  Life  Ins.  Co.,  9  R.  I.  346;  Tatum  v.  State,  63 
Ala.  147.  See,  also,  as  to  construction  of  provisions  concerning  in- 
temperance, Knickerbocker  Life  Ins.  Co.  v.  Foley,  105  U.  S.  350; 
Brockway  v.  Mutual  Ben.  Life  Ins.  Co.,  9  Fed.  249;  Schultz  v.  Mut- 
ual Life  Ins.  Co.,  6  Fed.  672;  Knecht  v.  Mutual  Life  Ins.  Co.,  90  Pa. 
St.  118;  Malicki  v.  Chicago  Guaranty  Fund  Life  Soc,  123  Mich.  148, 
81  N.  W.  1074;  Aetna  Life  Ins.  Co.  v.  Davey,  123  U.  S.  739. 

^'"'Spruin  V.  North  Carolina  Mut.  Life  Ins.  Co.,  1  Jones  (N.  C), 
126;  Ritter  v.  Mutual  Life  Ins.  Co.,  169  U.  S.  139. 

'"^  Miller  v.  Travelers'  Ins.  Co.,  39  Minn.  548. 

■"^  Northup  V.  Railway  Passenger  Assur.  Co.,  2  Lans.  166,  43  N.  Y. 
516.  See,  also,  Ripley  v.  Railway  Passengers'  Assur.  Co.,  2  Bigelow, 
L.  &  A.  Rep.  738;  Theobald  v.  Railway  Passengers'  Assur.  Co.,  10 
Exch.  44,  2  Bigelow,  L.  &  A.  Rep.  393. 


394  THE    CONTKACT    AND    ITS    INCIDENTS.  §  150 

ulations  of  tlie  carriers,  and  not  neglecting  to  use  due  diligence 
for  self-protection,"  do  not  include  an  injury  to  a  passenger 
on  a  railway  car  by  being  tliro^^Ti  from  its  steps  where  he  sat 
Avhile  the  train  was  approaching  the  station,  in  violation  of 
a  known  rule.^"^  One  is  a  passenger  while  entering  or  alight- 
ing from  a  conveyance.^"'*  Eiding  on  the  platform  of  a  rail- 
way car  is  not  necessarily  voluntary  exposure  to  unneces- 
sary danger.  ^*^^ 

The  risk  of  getting  on  and  off  a  moving  train  is  incident  to- 
the  business  of  a  brakeman,  and  such  as  accident  insurance 
obtained  by  him  is  intended  to  cover  when  his  occupation  is 
known  to  the  insurer  at  the  time  of  the  making  of  the  contract,, 
and  a  provision  in  such  a  policy  against  accidents  in  attempt- 
ing to  enter  or  leave  a  moving  conveyance  cannot  be  insisted 
upon  by  the  insurer.^"® 

Suicide. 

The  rules  covering  the  effect  of  suicide  upon  a  life  or  ac- 
cident insurance  policy  may  be  briefly  stated  thus : 

(1)   Intentional    self-destruction    is    a    complete    defense 
where  the  insured  or  his  estate  is  the  beneficiary  in  the  policy 
even  in  the  absence  of  any  special  provision  to  that  effect.  ^^ 
Otherwise  if  the  money  is  payable  to  a  designated  benefici- 
ary,208  ^^^\  ^j^g  policy  was  taken  out  in  good  faith.^*^^     But 

="'  Bon  V.  Railway  Passenger  Assur.  Co.,  56  Iowa,  664. 

-"■'  King  V.  Travelers'  Ins.  Co.,  101  Ga.  64,  28  S.  E.  661. 

'"' Travelers'  Ins.  Co.  v.  Randolph  (C.  C.  A.),  78  Fed.  754. 

=»'  Dailey  v.  Preferred  Masonic  Mut.  Ace.  Ass'n,  102  Mich.  289.  See, 
also.  Gotten  v.  Fidelity  &  Casualty  Co.,  41  Fed.  506;  Anthony  v.  Mer- 
cantile Mut.  Ace.  Ass'n,  162  Mass.  354,  38  N.  E.  973;  Smith  v.  Pre- 
ferred Mut.  Ace.  Ass'n,  104  Mich.  634,  62  N.  W.  990;  Travelers'  Ins, 
Co.  V.  Snowden,  45  Neb.  249. 

2°'  Ritter  v.  Mutual  Life  Ins.  Co.,  169  U.  S.  139. 

209  Morris  v.  State  Mut.  Life  Assur.  Co.,  183  Pa.  St.  563,  39  Atl.  52, 

='"  Seller  v.  Economic  Life  Ass'n,  105  Iowa,  87. 


T 


§  150  THE    RISK   ASSUMED.  395 

a  secret  intent  of  the  insured,  at  the  time  he  toolc  ont  the 
policy,  to  commit  suicide,  would  constitute  fraud,  which,  if 
proven,  would  defeat  recovery.  Being  void  in  its  inception 
no  rights  would  accrue  under  such  a  contract,  to  any  per- 
son. 210 

(2)  A  policy  conditioned  to  he  void  in  case  the  assured  die 
by  his  own  hand,  is  not  avoided  by  self  destruction  in  a  fit  of 
insanity.2^^ 

(3)  No  recovery  can  be  had  on  a  policy  on  the  life  of  one 
Avho  kills  himself,  whether  sane  or  insane,  where  the  policy 
stipulates  that  the  insurer  Avill  not  be  liable  in  case  the  insured 
dies  by  suicide  whether  sane  or  insane.^^^ 

One  test  of  insanity  is  the  capacity  to  understand  the  moral 
character  of  the  taking  of  the  life.  Thus  the  intentional  kill- 
ing of  himself  by  the  insured,  when  his  reasoning  faculties 
are  so  far  impaired  by  insanity  that  he  is  unable  to  under- 
stand the  moral  character  of  his  act,  is  not  suicide  or  self 
destruction,  or  dying  by  his  o^\ti  hands,  within  the  meaning 
of  such  words  in  a  clause  excepting-sueh  risk,  even  though  ho 
understood  the  physical  nature,  consequences,  and  effect  of 
his  act. 2^^     The  tenn  "insanity,"  as  used  in  this  connection, 

='*' Parker  v.  Des  Moines  Life  Ass'n,  108  Iowa,  117,  78  N.  W.  826; 
Patterson  v.  Natural  Premium  Mut.  Life  Ins.  Co.,  100  Wis.  118,  75 
N.  W.  980. 

''' Eastabrook  v.  Union  Mut.  Life  Ins.  Co.,  54  Me.  224;  Grand 
Lodge,  I.  O.  M.  A.,  v.  Wieting,  168  111.  408,  48  N.  E.  59;  Van  Zandt 
V.  Mutual  Ben.  Life  Ins.  Co.,  55  N.  Y.  169,  14  Am.  Rep.  215;  Con- 
necticut Mut.  Life  Ins.  Co.  v.  Groom,  86  Pa.  St.  92,  27  Am.  Rep. 
689;  John  Hancock  Mut.  Life  Ins.  Co.  v.  Moore,  34  Mich.  41;  Black- 
stone  V.  Standard  Life  &  Ace.  Ins.  Co.,  74  Mich.  592. 

-'=  Travellers'  Ins.  Co.  v.  McConkey,  127  U.  S.  661;  Billings  v.  Ac- 
cident Ins.  Co.,  64  Vt.  78,  17  L.  R.  A.  89;  Bigelow  v.  Berkshire  Life 
Ins.  Co.,  93  a.  S.  284;  Tritschler  v.  Keystone  Mut.  Ben.  Ass'n,  ISO 
Pa.  St.  205. 

"=  Connecticut  Mut.  Life  Ins.  Co.  v.  Akens,  150  U.  S.  468;  Mutual 
Life  Ins.  Co.  v.  Terry,  15  Wall.  (U.  SJ  580;  Blackstone  v.  Standard 


396  THE   CONTKACT    AND   ITS   INCIDENTS.  §  150 

means  siicli  a  perverted  and  deranged  condition  of  the  mental 
and  moral  faculties,  as  to  render  the  person  incapable  of 
distinguishing  between  right  and  wrong,  or  unconscious,  at  the 
time,  of  the  nature  of  the  act  he  is  committing;  or  where, 
though  conscious  of  it,  and  able  tx)  distinguish  between  right 
and  wrong,  and  knowing  that  the  act  is  wrong,  yet  his  will, 
that  is,  the  governing  power  of  his  mind,  has  been,  otherwise 
than  voluntarily,  so  completely  destroyed  that  his  actions  are 
not  subject  to  it,  but  are  beyond  his  control.^^* 

Where  the  death  may  have  been  accidental  or  suicidal,  the 
presumption  is  in  favor  of  the  former.  What  was  really  the 
cause  of  death  is  usually  a  question  of  fact  for  a  jury.  The 
burden  of  j)roof  is  on  the  insurer  to  prove,  by  a  preponderance 
■of  evidence,  that  the  deceased  died  through  suicide  ;^^^  but 
where  the  reasonable  probabilities,  from  the  evidence,  all 
point  to  suicide  as  the  cause  of  death,  so  as  to  establish  it  with 
such  certainty  as  to  leave  no  room  for  doubt,  the  question 
must  be  decided  as  one  of  law.^-^® 

Voluntary  Exposure  to  Unnecessary  Danger. 

The  terms  "voluntary  exposure"  and  "unnecessary  danger," 
and  "hazardous  adventure,"  within  the  meaning  of  an  insur- 
ance policy,  do  not  include  such  exposure' as  is  incident  to  the 
ordinary  habits  and  customs  of  life,  but  refer  to  something 

Life  &  Ace.  Ins.  Co.,  74  Mich.  592;  Connecticut  Mut.  Life  Ins.  Co.  v. 
Groom,  86  Pa.  St.  96. 

'^*  Davis  V.  United  States,  165  U.  S.  373. 

='^  Beckett  v.  Northwestern  Masonic  Aid  Ass'n,  67  Minn.  298,  69 
N.  "W.  923,  and  cases  ante. 

"»Agen  V.  Metropolitan  Life  Ins.  Co.,  105  Wis.  217,  80  N.  W.  1021; 
Travellers'  Ins.  Co.  v.  McConkey,  127  U:  S.  661.  In  determining  the 
question  whether  death  was  accidental  or  suicidal,  the  fact  that  de- 
ceased was  an  atheist  or  an  infidel  affords  no  presumption  that  he 
■committed  suicide.  Gibson  v.  American  Mut.  Life  Ins.  Co.,  37  N.  Y. 
580. 


§  150  THE    RISK   ASSUMED.  39T 

beyond  the  ordinary,  such  as  wanton  or  gross  carelessness. 
They  import  an  exposure  or  risk  by  the  assured  to  an  unneces- 
sary danger,  with  a  consciousness  thereof,  arid  the  intention 
or  design  to  risk  the  consequences  of  the  act.  More  than 
mere  carelessness  or  negligence  or  inadvertence  of  the  insured 
is  meant.^^'^  The  mere  act  of  cleaning  a  gun,  not  known  to 
be  loaded,  is  not  such  exposure  ;^^^  nor  an  attempt  to  drive  a 
bull  into  a  pasture  ;^^^  nor  an  attempt  to  scale  a  bank  with  a 
loaded  gun  in  hand  j^^*'  nor  getting  out  upon  th6  platform  of 
a  moving  car;^^^  nor  is  an  attempt  to  board  a  slowly  moving 
car  necessarily.^^^  But  an  attempt  to  pass  through  a  trestle, 
known  to  be  dangerous,  upon  a  dark  night,  is  voluntary  ex- 
posure to  unnecessary  danger  ;^^^  and  running  along  the 
tracks  in  front  of  a  moving  train  ;^"^  and  jumping  from  a  mov- 
ing train  ;^^^  a  condition  requiring  the  insured  to  use  duo 

'^^  Wilson  V.  Northwestern  Mut.  Ace.  Ass'n,  53  Minn.  470;  Manu- 
facturers' Ace.  Ind.  Co.  V.  Dorgan  (C.  C.  A.),  58  Fed.  945;  Keene  v. 
New  England  Mut.  Ace.  Ass'n,  164  Mass.  170;  Conboy  v.  Railway 
Officials'  &  Employes'  Aec.  Ass'n,  17  Ind.  App.  62,  46  N.  E.  363. 

"^Miller  v.  American  Mut.  Ace.  Ins.  Co.,  92  Tenn.  167. 

"*  Johnson  v.  London  Guarantee  &  Aec.  Co.,  115  Mich.  86,  40  L. 
R.  A.  440. 

"°  Cornwell  v.  Fraternal  Ace.  Ass'n,  6  N.  D.  201. 

"'Marx  V.  Travelers'  Ins.  Co.,  39  Fed.  321;  Burkhard  v.  Trav- 
ellers' Ins.  Co.,  102  Pa.  St.  262. 

'-'  Johanns  v.  National  Ace.  Soc.,  16  App.  Div.  104,  45  N.  Y.  Supp. 
117;  Fidelity  &  Casualty  Co.  v.  Sittig,  181  111.  111. 

'-'Travelers'  Ins.  Co.  v.  Jones,  80  Ga.  541;  Follis  v.  United  States 
Mut.  Aec.  Ass'n,  94  Iowa,  435,  28  L.  R.  A.  78. 

=-*Tuttle  v.  Travellers'  Ins.  Co.,  134  Mass.  175. 

-^''  Smith  V.  Preferred  Mut.  Ace.  Ass'n,  104  Mich.  634,  62  N.  W.  990. 
See,  also,  on  this  question.  Standard  Ins.  Co.  v.  Langston,  60  Ark. 
381;  National  Ben.  Ass'n  v.  Jackson,  114  111.  553;  Fidelity  &  Casualty 
Co.  V.  Chambers,  93  Va.  138;  Scheiderer  v.  Travelers'  Ins.  Co.,  68 
Wis.  13;  United  States  Mut.  Ace.  Ass'n  v.  Hubbell,  56  Ohio  St.  516, 
47  N.  E.  544;  Lovelace  v.  Travelers'  Protective  Ass'n,  126  Mo.  104, 
30   L.  R.  A.  209;    Ashenfelter   v.   Employers'  Liability  Assur.  Corp. 


398  THE    CONTRACT   AND    ITS    INCIDENTS.  §  151 

care  and  diligence  imposes  upon  liim  the  duty  to  use  such  care 
and  diligence  as  prudent  persons  ordinarily  use,^-*^  The 
teinn  "voluntary  over-exertion"  means  conscious  or  intentional 
over-exertion,  or  a  reckless  disregard  of  consequences  likely 
to  ensue  from  the  effort. ^^'^ 

Stipulation's  of  Policy. 

g  1 5 1 .  Stipulations  and  conditions  of  an  insurance  contract 
restricting  and  limiting  the  liability  of  the  insurer  are  (unless 
prohibited  by  statute)  valid  and  must  be  recognized  and  en- 
forced by  the  courts. 

Title  and  Interest. 

A  stipulation  in  the  policy  that  it  shall  he  void  if  the  in- 
sured is  not  the  sole,  absolute  and  unconditional  owner  of  the 
property,  does  not  refer  to  encumbrances  upon  the  property, 
but  to  the  character  and  quality  of  the  title. ^^^  It  is  reason- 
able, and  will  be  enforced  in  the  absence  of  waiver.--^  It 
relates  to  subsequent  changes  in  the  title,  rather  than  to  the 
estate  or  condition  when  the  policy  is  issued.^^'^     Sole  owners 

(C.  C.  A.),  87  Fed.  682;  Matthes  V.  Imperial  Ace.  Ass'n,  110  Iowa, 
222,  81  N.  W.  484;  Sawtelle  v.  Railway  Passenger  Assur.  Co.,  15 
Elatchf.  216,  Fed.  Cas.  No.  12,392;  Shevlin  v.  American  Mut  Ace. 
Ass'n,  94  Wis.  180,  36  L.  R.  A.  52;  Equitable  Ace.  Ins.  Co.  v.  Osborn, 
90  Ala.  201,  13  L.  R.  A.  267. 

"^  Kentucky  L.  &  A.  Ins.  Co.  v.  Franldin,  102  Ky.  512,  43  S.  W.  709. 

2"  Manufacturers'  Ace.  Ind.  Co.  v.  Dorgan  (C.  C.  A.),  58  Fed.  952; 
Rustin  V.  Standard  L.  &  A.  Ins.  Co.,  58  Neb.  792,  79  N.  W.  712,  46 
L.  R.  A.  253. 

^-^  Ellis  V.  Insurance  Co.  of  North  America,  32  Fed.  646. 

""  Phoenix  Ins.  Co.  v.  Public  Parks  Amusement  Co.,  63  Ark.  187,  37 
S.  W.  959;   East  Texas  Fire  Ins.  Co.  v.  Brown,  82  Tex.  631. 

"°Hall  V.  Niagara  Fire  Ins.  Co.,  93  Mich.  184;  Hoose  v.  Prescott 
Ins.  Co.,  84  Mich.  309,  11  L.  R.  A.  340.  Compare  National  Fire  Ins. 
Co.  V.  Orr,  56  111.  App.  627;  Collins  v.  London  Assur.  Corp.,  165  Pa, 
St  298;  Syndicate  Ins.  Co.  v.  Bohn  (C.  C.  A.),  65  Fed.  165;  Lingen- 
felter  v.  Phoenix  Ins.  Co.,  19  Mo.  App.  252.  The  statements  in  an 
application  refer  to  the  condition  of  the  title  at  the  time  of  making 


§  151  STIPULATIONS    OF    PaLICV.  399 

of  the  capital  stock  £)£  a  corpoxation  have  not  the  sole  and 
unconditional  ownership  of  the  property. -•'^^  The  o^^^ler 
of  a  life  estate  has  not  an  absolute  interest  in  the  real 
estate.  ^"^^  The  owner  of  an  undivided  interest  in  land 
is  not  the  owner  in  fee  simple. ^^^  A  devise  of  land 
with  the  reservation  that  the  grantor  shall  have  the  right 
to  re-enter  on  the  happening  of  a  condition  subsequent 
does  not  convey  absolute  title.^^*  A  policy  conditioned  to 
be  void  if  the  insured  is  not  the  sole  and  unconditional 
owner  of  the  property  insured,  is  avoided  if  the  property  be- 
longs to  a  firm  and  is  insured  by  one  of  the  members  of  the 
firm  in  his  o^vn  name  without  the  insurer  having  knowledge 
of  the  facts. ^^^  One  holding  an  assignment  of  a  land  contract 
as  collateral  security  for  a  loan,  is  not  the  sole  and  uncon- 
ditional o^vner.^^*^ .  The  terms  "interest"  and  "title"  are  not 
synonymous,  and  the  mortgagor  in  possession,  and  a  purchaser 

the  application.  As  to  foreclosure  of  mortgage  between  making  ap- 
plication and  issuing  policy,  see  Day  v.  Hawkeye  Ins.  Co.,  72  Iowa, 
597,  34  N.  W.  435.  But  in  Cable,  v.  United  States  Life  Ins.  Co.  (C. 
C.  A.),  Ill  Fed.  19,  it  was  held  that  a  statement  in  an  application 
for  life  insurance  speaks  as  of  the  time  of  the  delivery  of  the  policy, 
and  that  an  absolute  duty  rests  upon  the  applicant  to  make  disclosure 
to  the  insurer  of  any  material  changes  in  his  condition  covered  by  a 
statement  in  the  application  occurring  after  the  statement  was  made 
and  before  the  consummation  of  the  contract. 

"^Syndicate  Ins.  Co.  v.  Bohn  (C.  C.  A.),  65  Fed.  165,  27  L.  R.  A. 
614. 

="  Davis  v.  Iowa  State  Ins.  Co.,  67  Iowa,  494. 

'^'Scottish  U.  &  N.  Ins.  Co.  v.  Petty,  21  Fla.  399;  Carver  v.  Hawk- 
eye  Ins.  Co.,  69  Iowa,  202. 

"*  Dowd  v.  American  Ins.  Co.,  41  Hun  (N.  Y.),  139.  As  to  effect  of 
party  wall  on  title,  see  Commercial  Fire  Ins.  Co.  v.  Allen,  80  Ala.  571. 

="=>  McFetridge  v.  Phenix  Ins.  Co.,  84  Wis.  200,  54  N.  W.  326;  Ger- 
mania  Fire  Ins.  Co.  v.  Home  Ins.  Co.,  4  Misc.  Rep.  443,  24  N.  Y. 
Supp.  357. 

""Gettleman  v.  Commercial  Union  Assur.  Co.,  97  Wis.  237,  72 
N.  W.  627. 


400  .  THE    CONTKACT    AND    ITS    INCIDENTS.  §  151 

holding  under  a  deed  defectively  executed,  liave  both  of 
them  absolute  as  well  as  insurable  interests  in  the  property 
though  neither  has  the  legal  title.  "Absolute"  is  synony- 
mous with  "vested/'  and  is  used  in  contradistinction  to  "con- 
tingent," or  "conditional."^^^  The  vendor  in  an  executory 
contract  to  sell,  where  the  vendee  is  in  possession,  and  has 
paid  part  of  the  purchase  money,  is  not  the  sole  and  absolute 
0'R^ler;^^^  but  such  a  ven,dee  has  been  held  to  be.^^^  One 
who  has  purchased  personal  property  under  a  contract  that 
the  title  shall  not  vest  until  the  tenns  of  sale  are  complied 
with,  is  not,  until  fulfihnent  of  his  contract,  the  unconditional 
owner  of  the  property, ^^^  O^vners  in  severalty  may  be  ab- 
solute 0"\vners.^^^  Proceedings  to  oust  a  tenant  holding  over 
without  permission,  is  not  a  litigation  that  will  defeat  a 
policy  providing  that  it  shall  be  void  if  the  title  or  possession 
be  involved  in  litigation,  when  the  proceedings  to  recover 
possession  are  predicated  upon  the  provisions  of  the  lease.^^^ 
The  stipulations  of  the  policy  must  all  be  construed  together. 
Thus  it  has  been  held  that  a  provision  that  a  policy  shall  be 
void  unless  the  land  on  which  the  insured  building  stands  is 
owned  by  the  insured,  is  controlled  by  a  description  in  the 
policy  showing  that  the  building  was  used  in  the  business  of 

="  Franklin  Fire  Ins.  Co.  v.  Martin,  40  N.  J.  Law,  568,  29  Am.  Rep. 
271;   Hough  v.  City  Fire  Ins.  Co.,  29  Conn.  10,  76  Am.  Dec.  581. 

"^Hamilton  v.  Dwelling  House  Ins.  Co.,  98  Mich.  535. 

"'Knop  V.  National  Fire  Ins.  Co.,  101  Mich.  359;  Loventhal  v. 
Home  Ins.  Co.,  112  Ala.  108,  33  L.  R.  A.  258;  Imperial  Fire  Ins.  Co. 
V.  Dunham,  117  Pa.  St.  460,  2  Am.  St.  Rep.  686;  Johannes  v.  Stand- 
ard Fire  Office,  70  Wis.  196. 

=■">  Westchester  Fire  Ins.  Co.  v.  Weaver,  70  Md.  536,  5  L.  R.  A.  478. 

"1  Beebe  v.  Ohio  Farmers'  Ins.  Co.,  93  Mich.  514,  18  L.  R.  A.  481. 
As  to  estate  by  entirety,  see  Clawson  v.  Citizens'  Mut.  Fire  Ins.  Co., 
121  Mich.  591,  80  N.  W.  573. 

=*=  Hall  V.  Niagara  Fire  Ins.  Co.,  93  Mich.  184. 


§  151  STIPULATIONS    OF   POLICY.  401 

a  post-trader,  and  was  situate  on  land  belonging  to  tlie  United 
States.2« 

Change  of  Title  and  Possession. 

A  condition  of  a  policy  of  insurance  that  if  any  change  in 
the  title  or  possession  of  the  property  takes  place,  whether 
by  sale,  transfer,  conveyance,  legal  process  or  judicial  decree,, 
then  and  in  every  such  case  the  policy  shall  be  void,  includes 
an  involuntary  as  well  as  a  voluntary  change  of  possession. 
A  writ  of  attachment  is  process,  and  the  fact  that  an  officer 
levied  upon  property  insured  under  a  writ  of  attachment,  and 
took  possession  thereunder,  shows  a  change  of  possession 
avoiding  the  policy. ^^'*  The  making  of  a  mortgage  is  not  a 
change  of  possession  ;^'*^  nor  a  change  of  receivers  i^'*^  nor 
leaving  the  premises  temporarily  in  charge  of  an  agent.^^'^ 

Alienation  or  Change  of  Title  or  Interest 

In  some  cases  it  has  been  held  that  an  inhibition  against  a 
change  of  title,  interest  or  possession  would  invalidate  a 
policy,  although  a  clause  prohibiting  a  sale  or  alienation 
might  not  have  that  effect.^^^     The  making  of  a  contract  for 

^"  Broadwater  v.  Lion  Fire  Ins.  Co.,  34  Minn.  465.  See,  also,  as  to 
title,  Southwick  v.  Atlantic  P.  &  M.  Ins.  Co.,  133  Mass.  457  (Quit- 
claim deed  from  second  mortgagee  does  not  convey  full  title); 
Franklin  Fire  Ins.  Co.  v.  Vaughan,  92  U.  S.  516;  Chandler  v.  St. 
Paul  F.  &  M.  Ins.  Co.,  21  Minn.  85  (when  title  to  personal  property 
passes). 

"'  Carey  v.  German  American  Ins.  Co.,  84  Wis.  80,  20  L.  R,  A.  267. 
See,  also,  ante,  "Alienation." 

"'Nussbaum  v.  Northern  Ins.  Co.,  37 -Fed.  524. 

'*^  Thompson  v.  Phenix  Ins.  Co.,  136  U.  S.  287. 

'"  Shearman  v.  Niagara  Fire  Ins.  Co.,  46  N.  Y.  526. 

"'Hathaway  v.  State  Ins.  Co.,  64  Iowa,  229;  Gibh  v.  Philadelphia 
Fire  Ins.  Co.,  59  Minn.  267,  61  N.  W.  137;  Phenix  Ins.  Co.  v.  Hol- 
combe,  57  Neb.  622,  78  N.  W.  301.  But  see  Burnett  v.  Eufaula 
Home  Ins.  Co.,  46  Ala.  11;  New  Orleans  Ins.  Ass'n  v.  Holberg,  64 
Miss.  51,  8  So.  175. 

KERR,  INS.— 26 


402    -  THE   CONTRACT   AND    ITS    IXCIDEXTS.  §  151 

the  sale  of  property  insured,  Avitlioiit  the  consent  of  the  in- 
surer, comes  within  a  provision  that  the  policy  shall  be  void 
upon  a  sale  without  the  insurer's  consent,  and  the  policy  is 
not  restored  upon  abandonment  of  the  contract.  ^^^  An  un- 
conditional transfer  operates  as  a  forfeiture  ;-^^  and  a  transfer 
of  the  equitable  title,  if  the  policy  provides  that  it  shall  be  void 
if  any  change  takes  place  in  the  title,  if,  under  the  law  of  the 
state  where  the  property  is  situated,  the  beneficial  interest 
passes  with  the  equitable  title. ^^^  The  g■i^^ng  of  a  chattel 
mortgage  by  one  partner  on  firm  property,  for  his  individual 
benefit,  is  a  change  of  interest,  title  or  possession  ;^^^  and  the 
formation  of  a  co-partnership  ;^^^  and  a  partition  of  prop- 
erty among  the  devisees  of  the  insured  ;^^^  and  a  conveyance 
by  the  assured  and  his  wife  to  another,  who  reconveys  to  the 
^jfg.255  g^jj(j  g^  conveyance  by  the  insured  to  her  husband's 
trustee  in  insolvency  ;^^*'  and  an  executory  agreement  to  convey 
the  insured  premises,  where  the  vendee  takes  possession  and 
pays  part  of  the  purchase  price.  ^^'^ 

The  execution  of  a  deed,  absolute  in  form,  though  intended 
and  given  as  security  for  a  debt,  is  witliin  a  provision  that  a 
policy  shall  be  void  "if  the  property  be  sold  or  transferred, 

"'Davidson  v.  Hawkeye  Ins.  Co.,  71  Iowa,  532,  32  N.  W.  514; 
California  State  Bank  v.  Hamburg-Bremen  Ins.  Co.,  71  Cal.  11. 

'"  Griffey  v.  New  York  Cent.  Ins.  Co.,  100  N.  Y.  417. 

"'  Cottingham  v.  Firemen's  Fund  Ins.  Co.,  90  Ky.  439,  9  L.  R.  A. 
627. 

^=  Olney  v.  German  Ins.  Co.,  88  Mich.  94,  13  L.  R.  A.  684. 

"'  Germania  Fire  Ins.  Co.  v.  Home  Ins.  Co.,  4  Misc.  Rep.  443,  24 
N.  Y.  Supp.  357.      ' 

»=♦  Trabue  v.  Dwelling  House  Ins.  Co.,  121  Mo.  75,  23  L.  R.  A.  719. 

="  I.angdon  v.  Minnesota  Farmers'  Mut.  Fire  Ins.  Ass'n,  22  Minn. 
193;  Oakes  v.  Manufacturers'  F.  &  M.  Ins.  Co.,  131  Mass.  164. 

=■•»  Brown  v.  Cotton  &  W.  M.  Mut.  Ins.  Co..  156  Mass.  587. 

"'  Gibb  V.  Philadelphia  Fire  Ins.  Co.,  59  Minn.  267,  61  N.  W.  137. 


§  151  STIPULATIONS    OF    POLICY.  403 

or  any  change  take  place  in  the  title  or  possession,  etc."  ;-^^ 
and  the  making  of  a  void,  fraudulent,  or  imperfect  deed.^^^ 

Whether  or  not  an  accepted  offer  to  purchase  insured  prop- 
erty constitutes  a  breach  of  condition  in  the  policy  against  a 
change  of  ownership  is  a  question  for  the  court.  The  accept- 
ance of  a  proposition  to  buy  real  property,  which  is  definite 
in  nothing  more  than  the  amount  to  be  paid,  does  not  prevent 
an  interest  in  the  insured  of  the  "entire,  unconditional,  unen- 
cumbered, and  sole  ownership."^®^  A  sale  or  transfer  means 
a  transfer  of  the  entire  interest  of  the  assured.  The  taking 
in  of  a  partner  has  been  held  not  to  be  a  sale  or  transfer 
"within  the  meaning  of  the  condition  of  the  policy  j^*^^  nor  the 
sale  from  one  partner  to  another.  "^^ 

The  word  "alienation"  imports  an  actual  transfer  of 
title  ;^^^  and  of  all  the  title  of  the  insured. ^^'^     A  void  deed 

^^' Barry  v.  Hamburg-Bremen  Fire  Ins.  Co.,  21  Jones  &  Sp.  (N.  Y.) 
249;  Dailey  v.  Westchester  Fire  Ins.  Co.,  131  Mass.  173. 

""Baldwin  v.  Phoenix  Ins.  Co.,  60  N.  H.  164.  See,  also,  Foote  v. 
Hartford  Fire  Ins.  Co.,  119  Mass.  2-59;  Mulville  v.  Adams,  19  Fed. 
887;-  Moulthrop  v.  Farmers'  Mut.  Fire  Ins.  Co.,  52  Vt.  123;  Farm, 
ers'  Ins.  Co.  v.  Archer,  36  Ohio  St.  608;  Buchanan  v.  Westchester 
County  Mut..  Ins.  Co.,  61  N.  Y.  611. 

/""Arkansas  Fire  Ins.  Co.  v.  AVilson,  67  Ark.  553,  48  L.  R.  A.  510. 
.As  to  effect  of  executory  agreement  to  sell,  see,  also,  Erb  v.  German- 
American  Ins.  Co.,  98  Iowa,  606;  Forward  v.  Continental  Ins.  Co., 
142  N.  Y.  382. 

=="  Blackwell  v.  Miami  Valley  Ins.  Co.,  48  Ohio  St.  553,  14  L.  R.  A. 
431.  But  see,  contra,  Germania  Fire  Ins.  Co.  v.  Home  Ins.  Co.,  144 
N.  Y.  195;  ante,  notes  252,  253. 

="Allemania  Fire  Ins.  Co.  v.  Peck,  133  111.  220;  Roby  v.  Ameri- 
can Cent.  Ins.  Co.,  120  N.  Y.  510;  New  Orleans  Ins.  Ass'n  v.  Holberg, 
64  Miss.  51;  Dresser  v.  United  Firemen's  Ins.  Co.,  45  Hun  (N.  Y.), 
298.  See,  also,  as  to  dealings  between  partners,  West  v.  Citizens' 
Ins.  Co.,  27  Ohio  St.  1;  Cowan  v.  Iowa  State  Ins.  Co.,  40  Iowa,  551; 
Powers  V.  Guardian  F.  &  L.  Ins.  Co.,  136  Mass.  108. 

'"  Marts  V.  Cumberland  Mut.  Fire  Ins.  Co.,  44  N.  J.  Law,  478. 

-"*  Cowan  V.  Iowa  State  Ins.  Co.,  40  Iowa,  551.  See  Commercial 
Ins.  Co.  V.  Scammon,  123  111.  601. 


404:  THE    CONTRACT    AND    ITS    INCIDENTS.  §151 

does  not  effect  a  change  of  title.^^^  An  agreement  to  sell 
property  is  not  an  alienation.^^®  A  stipulation  that  a  policy 
shall  be  void  upon  the  entering  of  a  decree  of  foreclosure, 
refers  to  a  decree  of  strict  foreclosure.  A  void  execution 
sale  is  not  a  "sale  or  levy  under  execution."^*^^ 

A  change  of  title  by  the  natural  death  of  the  insured,  is  not 
a  change  contemplated  by  the  policy,  where  the  insurer  agrees 
"to  make  good  to  the  assured,  his  executors,  etc.,"  all  loss.^^^ 
But  it  has  been  held  otherwise. ^^^ 

The  assignment  by  a  debtor  of  his  property  for  the  benefit 
of  his  creditors  operates  as  an  assignment  of,  and  renders 
void  a  fire  insurance  policy  held  by  him  which  contains  a 
provision  that  it  shall  be  void  if  assigned  without  the  assent 
of  the  company. ^'^^ 

=°^  German  Ins.  Co.  v.  York,  48  Kan.  488;  Phoenix  Ins.  Co.  v.  As- 
bury,  102  Ga.  565,  27  S.  E.  667;  Forward  v.  Continental  Ins.  Co.,  143 
N.  Y.  382;  Gilbert  v.  North  American  Fire  Ins.  Co.,  23  Wend. 
(N.  Y.)   43. 

^''oparcell  v.  Grosser,  109  Pa.  St.  617. 

="  Pearman  v.  Gould,  42  N.  J.  Eq.  4.  See,  also,  as  to  effect  of  giv- 
ing mortgage:  Friezen  v.  AUemania  Fire  Ins.  Co.,  30  Fed.  352; 
Bryan  v.  Traders'  Ins.  Co.,  145  Mass.  389;  Walradt  v.  Phoenix  Ins. 
Co.,  136  N.  Y.  375;  Koshland  v.  Fire  Ass'n,  31  Or.  362,  49  Pac.  866; 
deed  which  is  in  effect  a  mortgage:  Barry  v.  Hamburg-Bremen  Fire- 
Ins.  Co.,  110  N.  Y.  1;  Commercial  Ins.  Co.  v.  Scammon,  123  111.  601; 
New  Orleans  Ins.  Co.  v.  Gordon,  68  Tex.  144;  imperfect  or  illegal 
sale  under  mortgage:  Niagara  Fire  Ins.  Co.  v.  Scammon,  144  111. 
490;  Marts  v.  Cumberland  Mut.  Fire  Ins.  Co.,  44  N.  J.  Law,  478; 
Haight  V.  Continental  Ins.  Co.,  92  N.  Y.  51;  execution  sale:  Ham- 
mel  V.  Queen's  Ins.  Co.,  54  Wis.  72;  Hopkins  Manufacturing  Co.  v. 
Aurora  F.  &  M.  Ins.  Co.,  48  Mich.  148;  Loy  v.  Home  Ins.  Co.,  24 
Minn.  315;  conveyance  of  tax  title  interest:  Kyte  v.  Commercial 
Union  Assur.  Co.,  144  Mass.  46;  lease  for  term  of  years:  Smith  v. 
Phoenix  Ins.  Co.,  91  Cal.  323.  13  L.  R.  A.  475. 

=«' Forest  City  Ins.  Co.  v.  Hardesty,  182  111.  39,  55  N.  E.  139;  West- 
chester Fire  Ins.  Co.  v.  Dodge,  44  Mich.  420;  Richardson's  Adm'r  v. 
German  Ins.  Co.,  89  Ky.  571,  8  L.  R.  A.  800. 

""  Germania  Fire  Ins.  Co.  v.  Home  Ins.  Co.,  144  N.  Y.  195. 

"0  Dube  V.  Masconia  Mut.  Fire  Ins.  Co.,  64  N.  H.  527,  1  L.  R.  A.  57; 


§  151  STIPULATIONS    OF    POLICY.  •  405 

Alterations  and  Repairs. 

It  is  competent  for  the  insurer  and  insured  to  a^ee  that 
this  or  that  alteration  or  change  shall  work  a  forfeiture,  in 
which  case  the  only  inquiry  will  be  whether  the  one  in  ques- 
tion comes  within  the  agreement.  The  violation  of  a  condi- 
tion of  the  policy  that  it  shall  be  void  and  of  no  effect  if  "me- 
chanics are  employed  in  building,  altering  or  repairing  the 
premises"  without  notice  to  or  permission  of  the  insurer,  ter- 
minates the  contract  in  the  absence  of  the  waiver,  and  it  is  im- 
material whether  or  not  the  alteration  and  repairs  increase 
the  risk.^^-^ 

In  construing  clauses  of  a  policy  prohibiting  changes  in 
the  situation  or  circumstances  affecting  the  risk,  there  is  an 
Implied  exception  as  to  ordinary  repairs,  made  in  a  reason- 
able and  proper  way.^^^  A  clause  prohibiting  alterations, 
additions  or  enlargement  of  insured  buildings,  without 
notice  to  and  consent  of  an  insurer,  but  allowing  ordinary  and 
necessary  repairs,  does  not  authorize  the  insured  to  make  a 
material  enlargement  of  the  premises,  without  the  consent  of 
the  insurer,  although  the  risk  be  in  no  manner  increased. ^^^ 
Such  conditions  are  not  to  be  extended  by  implication  so  as 
to  include  cases  not  clearly  or  reasonably  within  the  words 

Perrj^  v.  Lorillard  Fire  Ins.  Co.,  61  N.  Y.  214.  See,  also,  Thompson 
V.  Phenix  Ins.  Co.,  136  U.  S.  287;  Trabue  v.  Dwelling  House  Ins.  Co., 
121  Mo.  75,  23  L.  R.  A.  719;  Georgia  Home  Ins.  Co.  v.  Kinnier"s 
Adm'x,  28  Grat.  (Va.)  88;  Brown  v.  Cotton  &  W.  M.  Mut.  Ins.  Co., 
156  Mass.  587;  Roby  v.  American  Cent.  Ins.  Co.,  120  N.  Y.  510; 
Keeney  v.  Home  Ins.  Co.,  71  N.  Y.  396;  McNally  v.  Phoenix  Ins. 
Co.,  137  N.  Y.  389;  Carey  v.  German  American  Ins.  Co.,  84  Wis.  80; 
Orr  V.  Citizens'  Fire  Ins.  Co.,  159  III.  187,  43  N.  E.  867. 

'"  Imperial  Fire  Ins.  Co.  v.  Coos  County,  151  U.  S.  452. 

"=  First  Congregational  Church  v.  Holyoke  Mut.  Fire  Ins.  Co.,  158 
Mass.  475,  35  Am.  St.  Rep.  508. 

"'  Frost's  Detroit  L.  &  W.  W.  Works  v.  Millers'  &  M.  Mut.  Ins.  Co., 
37  Minn.  300. 


406  THE    CONTRACT    AND    ITS    INCIDENTS.  §   151 

as  ordinarily  used  and  nnderstood,  and  do  not  include  the 
making  of  ordinary  and  necessary  repairs  to  tlie  building  to 
preserve  it  from  decay,  or  the  cutting  of  a  stove  pipe  hole 
in  a  partition,  or  other  similar  acts  which  are  reasonably' 
necessary  and  do  not  add  to  the  risk,  and  are  not  directly  or 
indirectly  the  cause  of  the  fire.^^^ 

In  Mack  v.  Rochester  German  Ins.  Co.,^'^^  the  policy  pro- 
vided that  the  working  of  mechanics  in  the  building  altering 
or  nepairing  it  without  the  consent  of  the  company  endorsed 
thereon,  would  cause  the  forfeiture  of  all  claims  under  the 
policy.  Mechanics  were  at  work  making  changes  in  the 
building  at  the  time  of  the  fire,  without  the  consent  of  the  in- 
surer, and  it  was  held  that  this  avoided  the  policy.  The  court 
approved  the  rule  last  laid  down,  and  said:  "Certain  con- 
ditions are  very  generally  regarded  by  underwriters  as  largely 
increasing  the  hazards  of  insurance,  and  they,  unless  corre- 
sponding premiums  are  paid  for  the  extra  risks,  are  usuall}" 
intended  to  be  excluded  from  the  obligation  of  the  policy. 
Such  are  the  conditions  in  reference  to  unoccupied  houses, 
changes  in  the  occupation  from  one  kind  of  business  to  another 
more  hazardous,  the  use  of  inflammable  substances  in  build- 
ings, and  their  occupation  by  carpenters,  roofers,  etc.,  for  the 
purpose  of  making  changes  and  alterations.  These  condi- 
tions, when  plainly  expressed  in  a  policy,  are  binding  upon 
the  parties,  and  should  be  enforced  by  courts  if  the  evidence 
brings  the  case  clearly  within  their  meaning  and  intent." 

Permission  to  make  alterations  and  repairs  to  the  insured 
property,  incidental  to  the  business  for  which  it  is  used,  means 
only  that  such  may  be  made  in  relation  to  carrying  on  the 
business  of  the  insured,   as  would  not  essentially  and  ma- 

■'*  James  v.  Lycoming  Ins.  Co.,  4  Cliff.  272,  Fed.  Cas.  No.  7.182. 
"=106  N.  Y.  560,  13  N.  E.  343;  Lyman  v.  State  Mut.  Fire  Ins.  Co., 
14  Allen    (Mass.),   329. 


§  151  STIPULATIONS    OF    POLICY.  407 

terially  increase  the  danger  of  the  property  being  destroyed 
by  fire;^'^^  and  does  not  authorize  the  erection  of  a  building 
forty  feet  distant  from  that  insured,  although  connected  with 
the  main  building  by  a  bridge  and  an  underground  passage 
for  pipes.  ^'^'^  Necessary  repairs,  made  in  good  faith,  during 
the  time  within  which  the  insurer  may  exercise  the  option  to 
rebuild  or  repair  the  premises,  do  not  defeat  a  right  to  re- 
covery. ^^^  Repairs  made  without  the  knowledge  or  consent 
of  the  assured  cannot  affect  his  rights.^^^  If  there  be  no 
prohibition  against  alteration  or  repairs,  an  alteration  will 
only  avoid  the  policy  when  it  increases  the  risk.^^^ 

Other  Insurance. 

The  breach  of  a  condition  of  a  policy -against  other  insur- 
ance is  available  as  a  defense  to  an  action  on  the  policy  al- 
though the  additional  insurance  had  ceased  to  be  in  force 
when  the  loss  occurred  f^'^  and  though  the  second  policy  con- 
tains a  like  condition.^^^  A  policy  of  insurance,  conditioned 
to  be  void  if  other  or  prior  insurance  be  or  exist  on  the  prop- 
erty, is  voided  by  a  prior  and  existing  policy  in  favor  of  one 
of  the  joint  owners  of  the  property  f^^  and  will  not  be  rein- 
stated by  the  expiration  of  the  earlier  policy  before  the 
loss.^^^     A  provision  that  a  policy  shall  be  void  in  case  of 

"•Crane  v.  City  Ins.  Co.,  3  Fed.  558. 

"'  Peoria  Sugar  Refining  Co.  v.  People's  Fire  Ins.  Co.,  24  Fed.  773. 

"'  Eliot  Five  Cents  Sav.  Bank  v.  Commercial  Assur.  Co.,  142  Mass. 
142,  7  N.  E.  550. 

"°  Breckinridge  v.  American  Cent.  Ins.  Co.,  87  Mo.  62. 

'*"  Stetson  V.  Massachusetts  Mut.  Fire  Ins.  Co.,  4  Mass.  330,  3  Am. 
Dec.  217;  Washington  Fire  Ins.  Co.  v,  Davison,  30  Md.  92;  Rann  v. 
Home  Ins.  Co.,  59  N.  Y.  387;  Dorn  v.  Germania  Ins.  Co.  (Ohio),  5 
Ins.  Law  J.  183. 

"'^Replogle  V.  American  Ins.  Co.,  132  Ind.  360. 

"^  Reed  v.  Equitable  F.  &  M.  Ins.  Co.,  17  R.  I.  785,  18  L.  R.  A.  496. 

J83  Horridge  v.  Dwelling-House  Ins.  Co.,  75  Iowa,  374,  39  N.  W.  648. 

"* Georgia  Home  Ins.  Co.  v.  Rosenfield  (C.  C.  A.),  95  Fed.  358. 


408  THE   CONTRACT   AND   ITS   INCIDENTS.  §  1^1 

otlier  insurance,  without  notice  and  consent  of  tlie  insurer,  is 
ipso  facto  avoided  bj  the  taking  out  of  additional  insurance, 
"without  the  consent  of  the  insurer,  or  its  waiver  of  the  pro- 
vision. ^^^ 

Notice  to  the  insurance  company  at  the  time  of  the  issu- 
ance of  the  policy  that  there  is  prior  insurance  will  estop  it 
from  asserting  that  the  policy  is  void  under  a  condition  against 
other  insurance.  The  tendency  and  weight  of  modem  au- 
thority is  in  favor  of  the  rule  that  the  condition  is  not  waived 
by  the  issuance  of  the  policy,  after  notice  only  to  a  mere  so- 
liciting agent  of  the  existence  of  additional  insurance.  Much 
would  seem  to  depend  upon  the  relation  of  the  agent  to  the 
company,  and  the  stipulations  of  the  policy  itself. ^^^ 

A  condition  against  other  insurance  is  violated  by  the  ex- 
istence of  a  prior  policy,  which,  although  void,  appears  valid 
upon  its  face; ^^'^  and  cannot  be  defeated  by  saying  that  the 
prohibited  insurance  is  invalid  because  of  the  existence  of  a 
like  condition  in  the  second  policy.  ^^^  A  policy  which  is  in 
and  of  itself  void  so  that  in  fact  it  constitutes  no  contract  of 

"^  Johnson  v.  American  Ins.  Co.,  41  Minn.  396. 

^^  German  Ins.  Co.  v.  Gray,  43  Kan.  497,  8  L.  R.  A.  70,  19  Am.  St. 
Rep.  150;  American  Ins.  Co.  v.  Gallatin,  48  Wis.  36;  Reed  v.  Equi- 
table F.  &  M.  Ins.  Co.,  17  R.  I.  785;  Berry  v.  American  Cent.  Ins. 
Co.,  132  N.  Y.  49;  Minnock  v.  Eureka  F.  &  M.  Ins.  Co.,  90  Mich.  236. 
But  see  Key  v.  Des  Moines  Ins.  Co.,  77  Iowa,  174;  Kister  v.  Lebanon 
Mut.  Ins.  Co.,  128  Pa.  St.  553,  5  L.  R.  A.  646;  Farnum  v.  Phoenix  Ins. 
Co.,  83  Cal.  246;  Eames  v.  Home  Ins.  Co.,  94  U.  S.  621;  Russell  v. 
Detroit  Mut.  Fire  Ins.  Co.,  80  Mich.  407. 

=^"  Phcenix  Ins.  Co.  v.  Copeland,  90  Ala.  386;  London  &  L.  Fire  Ins. 
Co.  V.  Turnbull,  86  Ky.  230;  Saville  v.  Aetna  Ins.  Co.,  8  Mont.  419; 
Funke  v.  Minnesota  Farmers'  Mut.  Fire  Ins.  Ass'n,  29  Minn.  347,  43 
Am.  Rep.  216;  Carpenter  v.  Providence  Wash.  Ins.  Co.,  16  Pet. 
(U.  S.)  495. 

'^  Stevenson  v.  Phoenix  Ins.  Co.,  83  Ky.  7;  Phenix  Ins.  Co.  v. 
Lamar,  106  Ind.  513.  But  see  Germania  Fire  Ins.  Co.  v.  Klewer,  129 
111.  599  (holding  also  that  the  existence  of  other  insurance  only  sus- 
pends the  policy) ;   Hubbard  v.  Hartford  Fire  Ins.  Co.,  33  Iowa,  325. 


§  151  STIPULATIONS    OF   POLICY.  409 

insurance  docs  not  breach  the  condition. -'^^  Insurance  taken 
out  by  the  mortgagee  for  himself,  without  the  mortgagor's 
knowledge  or  consent,  or  vice  versa,  is  not  within  the  condi- 
tion ;^^°  nor  insurance  procured  by  a  third  party  without  the 
knowledge  or  consent  of  the  insured. -^^  Where  the  o^^^ler 
of  insured  property  has  insurance  in  two  companies,  and 
there  is  a  question  as  to  his  right  to  recover  from  either,  the 
assertion  of  a  claim  against  each  is  not  a  fraud,  or  attempt 
at  fraud. ^^^ 

Incumbrances. 

A  mortgage  is  an  encumbrance  upon  property,  but  it  is  not 
a  sale  or  alienation. ^^^  No  recovery  can  be  had  upon  a  policy 
containing  a  stipulation  that  it  shall  be  void  if  the  property 
is  or  shall  be  encumbered  by  mortgage,  when  the  property  was 
at  the  time  covered  by  a  mortgage,  unless  the  company  has 
Avaived,  or  is  estopped  to  rely  upon  the  stipulation,  even  though 
no  inquiry  be  made  when  the  policy  was  issued. ^^"^     The  stip- 

='»Reed  v.  Equitable  F.  &  M.  Ins.  Co.,  17  R.  I.  785;  American  Ins. 
Co.  V.  Replogle,  114  Ind.  1,  15  N.  E.  810. 

-''"Cannon  v.  Home  Ins.  Co.,  49  La.  Ann.  1367;  Guest  v.  New 
Hampshire  Fire  Ins.  Co.,  66  Mich.  98,  33  N.  W.  31;  Hardy  v.  Lan- 
cashire Ins.  Co.,  166  Mass.  210,  44  N.  E.  209. 

-"^Niagara  Fire  Ins.  Co.  v.  Scammon,  144  111.  490;  but  see  Gillett 
V.  Liverpool  &  L.  &  G.  Ins.  Co.,  73  Wis.  203. 

■'^  Bennett  v.  Council  Bluffs  Ins.  Co.,  70  Iowa,  600.  As  to  notice 
and  waiver  of  condition  against  other  insurance,  see  Johnson  v. 
American  Ins.  Co.,  41  Minn.  396;  Fairfield  Packing  Co.  v.  Southern 
Mut.  Fire  Ins.  Co.  (Pa.),  44  Atl.  317;  Robinson  v.  Fire  Ass'n  of 
Philadelphia,  63  Mich.  90;  Miller  v.  Hartford  Fire  Ins.  Co.,  70  Iowa, 
704;  Day  v.  Mechanics'  &  Traders'  Ins.  Co.,  88  Mo.  325;  New  Orleans 
Ins.  Ass'n  v.  Griffin,  66  Tex.  232;  Washburn-Halligan  Coffee  Co.  v. 
Merchants'  :prick  Mut.  Fire  Ins.  Co.,  110  Iowa,  423,  81  N.  W.  707. 

203  Friezen  v.  Allemania  Fire  Ins.  Co.,  30  Fed.  349. 

^"Thorne  v.  Aetna  Ins.  Co.,  102  Wis.  593,  78  N.  W.  920;  Harding 
V.  Norwich  Union  Fire  Ins.  Soc,  10  S.  D.  64,  71  N.  W.  755;  Fitch- 
burg  Sav.  Bank  v.  Amazon  Ins.  Co.,  125  Mass.  431;  Crikelair  v.  Citi- 
zens' Ins.  Co.,  168  111.  309. 


410  THE    CONTRACT    AND    ITS    INCIDENTS.  §  151 

Illation  is  effective  where  one  of  the  insured  firm  executes  a 
mortgage  upon  his  interest  in  the  insured  property.  ^^^  The 
tenn  "mortgage"  includes  an  instrument  securing  the  per- 
formance of  a  contract  for  support  and  maintenance.  ^^^  Per- 
mission to  sell  chattels  does  not  include  permission  to  mort- 
gage them.^^^ 

The  cancellation  of  old  mortgages,  and  the  substitution  of 
new  ones  by  way  of  renewals,  is  not  the  creation  of  a  new 
encumbrance,  but  simply  changing  the  form  of  the  old.^^* 
And  it  has  been  held  that  the  effect  of  additional  encum- 
brances on  the  property  insured  is  not  a  breach  of  condition 
against  encumbrances,  where  the  total  amount  of  valid  en- 
cumbrances at  no  time  exceeds  the  amount  mentioned  by  the 
assured  in  his  application ;  and  it  seems  to  be  immaterial  what 
the  character  of  the  encumbrances  is,  or  to  whom  they  are 

The  term  "property"  as  used  in  the  phrase  "if  the  property 
insured  shall  hereafter  become  mortgaged  or  encumbered" 
refers  to  all  the  property  insured.  And  if  the  insured  prop- 
erty be  both  real  and  personal,  the  mortgaging  of  a  part  of  it 
will  not  work  a  forfeiture  of  the  entire  policy.^*^*^  A  judgment 
is  not  an  encumbrance.^^^     A  clause  in  a  lease,  reserving  to 

-''  Hicks  V.  Farmers'  Ins.  Co.,  71  Iowa,  119,  32  N.  W.  201. 

""  Continental  Ins.  Co.  v.  Vanlue,  126  Ind.  410.  See,  also,  William- 
son V.  Orient  Ins.  Co.,  100  Ga.  791,  28  S.  E.  914. 

=°'  First  Nat.  Bank  v.  American  Cent.  Ins.  Co.,  58  Minn.  492,  60 
N.  W.  345. 

="' Burns  v.  Thayer,  101  Mass.  426;  Bowlus  v.  Phenix  Ins.  Co.,  133 
Ind.  106. 

^''Kister  v.  Lebanon  Mut.  Ins.  Co.,  128  Pa.  St.  553,  5  L.  R.  A.  646; 
Mowry  v.  Agricultural  Ins.  Co.,  64  Hun  (N.  Y.),  137.  But  see  Hank- 
ins  V.  Rockford  Ins.  Co.,  70  Wis.  1,  35  N.  W.  34;  Russell  v.  Cedar 
Rapids  Ins.  Co.,  71  Iowa,  69,  32  N.  W.  95. 

^'"'  Born  V.  Home  Ins.  Co.,  110  Iowa,  379,  81  N.  W.  677. 

^"^  Pickel  V.  Phenix  Ins.  Co.,  119  Ind.  291,  18  Ins.  Law  J.  598.  See, 
also,  Phoenix  Ins.  Co.  v.  Swann  (Tex.),  41  S.  W.  519. 


§  151  8TIPULATI0^'S    OF    POLICY.  411 

the  lessor  a  first  lien  upon  all  buildings  for  unpaid  rental  or 
taxes,  does  not  amount  to,  or  create  a  chattel  mortgage  upon 
a  building  situate  upon  the  leased  ground,  within  the  mean- 
ing of  a  stipulation  in  a  policy  avoiding  it  if  the  building  be  or 
become  encumbered  by  a  chattel  mortgage.^*^^ 

Vacancy  and  Occupancy. 

In  construing  a  condition  of  an  insurance  policy  against 
vacancy  and  non-occupancy,  the  courts  will  look  to  the  subject 
matter  of  the  contract,  and  the  ordinary  incidents  attending 
the  use  of  the  insured  property.^*'^  The  occupancy  of  a 
dwelling,^^'*  of  a  mill,^**^  of  a  barn,^*^^  of  a  building  used  for 
manufacturing  purposes,^"'^  is  each  essentially  different  in  it& 
scope  and  character.  The  object  of  the  stipulation  against 
vacancy  and  non-occupancy  is  to  guard  against  the  increased 
risk  arising  from  the  absence  of  everybody  whose  duty  or 

'"-  Caplis  V.  American  Fire  Ins.  Co.,  60  Minn.  376. 

'"'Whitney  v.  Black  River  Ins.  Co.,  72  N.  Y.  117;  American  Fire 
Ins.  Co.  V.  Brighton  Cotton  Mfg.  Co.,  125  111.  131. 

"What  constitutes  vacancy  or  nonoccupancy  of  a  building  is  a 
question  of  law;  but  whether  a  building  is  vacant  or  unoccupied  or 
not,  within  the  meaning  of  the  law,  is  a  question  of  fact  for  the  jury. 
To  constitute  occupancy  of  a  dwelling  house,  it  is  not  essential  that 
it  be  continuously  used  by  a  family;  the  family  may  be  absent  from 
it  for  health,  pleasure,  business  or  convenience  for  reasonable 
periods,  and  the  house  will  not  on  that  account  be  considered  as 
vacant  or  unoccupied.  *  *  *  It  is  not  essential  that  the  build- 
ing should  be  put  to  all  the  uses  ordinarily  made  of  a  dwelling,  or 
to  some  of  those  uses  all  of  the  time,  nor  that  the  whole  house' 
should  be  subjected  to  that  use."  Moody  v.  Amazon  Ins.  Co.,  52 
Ohio  St.  12,  26  L.  R.  A.  313. 

"■*  Continental  Ins.  Co.  v.  Kyle,  124  Ind.  132. 

="■•  Frost's  Detroit  L.  &  W.  W.  Works  v.  Millers'  &  M.  Mut.  Ins.  Co,^ 
37  Minn.  300. 

'"^Sonneborn  v.  Manufacturers'  Ins.  Co.,  44  N.  J.  Law,  220;   Kim- 
ball V.  Monarch  Ins.  Co.,  70  Iowa,  513. 

'"Halpin  v.  Phenix  Ins.  Co.,  118  N.  Y.  165;  Brighton  Mfg.  Co.  v. 
Reading  Fire  Ins.  Co.,  33  Fed.  232. 


412  THE   CONTKACT   AND   ITS   INCIDENTS.  §  151 

interest  miglit  afford  protection  from  fire.^°^  A  fair  and 
reasonable  construction  of  tlie  term  "vacant  and  unoccupied," 
as  applied  to  a  house,  is  that  it  shall  be  without  an  occupant, 
without  any  person  living  in  it.^°^  Speaking  of  a  dwelling 
house  and  bam  the  supreme  court  of  Massachusetts  said: 
"Occupancy,  as  applied  to  such  buildings,  implies  an  actual 
use  of  the  house  as  a  dwelling  place,  and  such  use  of  the  barn 
as  is  ordinarily  incident  to  a  barn  belonging  to  an  occupied 
house,  or  at  least  something  more  than  a  use  of  it  for  mere 
storage.  The  insurer  has  a  right,  by  the  terms  of  the  policy, 
to  the  care  and  supervision  which  is  involved  in  such  oc- 
cupancy. "^^^^ 

A  dwelling  house  in  which  no  one  lives,  and  in  which  a 
former  occupant  has  left  some  furniture  of  small  value,  is 
vacant  and  unoccupied  ;^^^  and  a  house  from  which  the  owner 
or  tenant  has  removed  with  no  definite  intention  of  return- 
jj^g._3i2  J3^^  g^  temporary  absence,  or  the  occasional  and 
necessary  absence  of  the  family  and  servants,  will  not  be  so 
■construed.^  ^^  A  building  is  not  "vacant,  unoccupied,  or  not  in 
use"  if  being  repaired  and  refitted,  and  some  one  sleeps  in 

^"^  Sleeper  v.  New  Hampshire  Fire  Ins.  Co.,  56  N.  H.  401, 

»"» Moore  v.  Phoenix  Fire  Ins.  Co.,  64  N.  H.  140,  10  Am.  St.  Rep. 
384;  Herrman  v.  Adriatic  Fire  Ins.  Co.,  85  N.  Y.  163. 

'^"Ashworth  v.  Builders'  Mut.  Fire  Ins.  Co.,  112  Mass.  422. 

'"  Sexton  V.  Hawkeye  Ins.  Co.,  69  Iowa,  99. 

^"  Sleeper  v.  New  Hampshire  Fire  Ins.  Co.,  56  N.  H.  401.  See,  also, 
Bennett  v.  Agricultural  Ins.  Co.,  50  Conn.  420;  Moore  v.  Phoenix  Fire 
Ins.  Co.,  64  N.  H.  140,  10  Am.  St.  Rep.  384;  Continental  Ins.  Co.  v. 
Kyle,  124  Ind.  132,  9  L.  R.  A.  81;  Doud  v.  Citizens'  Ins.  Co.,  141  Pa. 
St.  47;  Burlington  Ins.  Co.  v.  Brockway,  138  111.  644;  Limburg  v. 
German  Fire  Ins.  Co.,  90  Iowa,  709,  23  L.  R.  A.  99;  American  Ins. 
Co.  V.  Padfield,.78  111.  167. 

«"  Phoenix  Ins.  Co.  v.  Tucker,  92  111.  64;  Laselle  v.  Hoboken  Fire 
Ins.  Co.,  43  N.  J.  Law,  468;  Home  Ins.  Co,  v.  Wood,  47  Kan.  521. 


§  151  STIPULATIONS    OF    POLICY.  413 

it;^-*^  or  if  a  tenant  has  moved  some  of  his  furniture  in,  with 
the  intention  of  using  the  house  as  a  dwelling. '"^^^ 

A  building  used  as  a  morocco  factory,  which  was  unused  for 
about  six  months  prior  to  the  fire,  was  held  to  be  unoccupied, 
even  though  all  the  machinery  remained  in  the  building,  and 
it  was  closed  and  locked,  and  in  the  hands  of  an  agent  to 
rent.^^^  Otherwise,  if  it  was  only  temporarily  closed  for  re- 
pairs, and  night  and  day  watchmen  were  on  duty,  and  em- 
ployes at  and  about  it.^^'^  An  agreement  that  the  insured 
may  leave  his  house  unoccupied  during  the  summer  of  each 
year,  inserted  in  his  original  policy,  covers  all  renewals  of 
the  policy.^  ^^  After  a  fire,  and  during  the  time  within  which 
the  insurer  can  decide  whether  it  will  rebuild,  a  vacancy  clause 
is  suspended.^ ^^ 

Both  conditions  need  not  be  shown,  in  order  to  avoid  a 
policy  of  insurance  under  a  clause  making  it  void  when  vacant 
or  unoccupied.^^*^  The  fact  that  the  owner  of  a  house,  who 
lived  alone  in  it,  left  it  for  two  months,  does  not,  as  a  matter 
of  law,  make  it  vacant  or  unoccupied,  within  the  condition 
avoiding  the  policy  should  the  premises  become  vacant  or  un- 
occupied and  so  remain  for  ten  days,  if  the  absence  was  not 
intended  to  be  permanent,  and  if  the  house  was  visited  daily 
by  a  neighbor  Avith  whom  the  keys  had  been  left.^^^     A  pro- 

'"  Stensgaard  v.  National  Fire  Ins.  Co.,  36  Minn.  181. 

'"Doud  V.  Citizens'  Ins.  Co.,  141  Pa.  St.  47;  Eddy  v.  Hawkeye  Ins. 
Co.,  70  Iowa,  472;  Traders'  Ins.  Co.  v.  Race,  142  111.  338,  29  N.  E.  846, 
31  N.  E.  392. 

'"Halpin  v.  Insurance  Co.  of  North  America,  120  N.  Y.  73,  8  L. 
R.  A.  79. 

»"  Brighton  Mfg.  Co.  v.  Reading  Fire  Ins.  Co.,  33  Fed.  232.    . 

''"  Vanderhoef  v.  Agricultural  Ins.  Co.,  46  Hun  (N.  Y.),  328. 

''•Lancashire  Ins.  Co.  v.  Bush,  60  Neb.  116,  82  N.  W.  313. 

'^"Limburg  v.  German  Fire  Ins.  Co.,  90  Iowa,  709. 

'=iHill  V.  Ohio  Ins.  Co.,  99  Mich.  466,  58  N.  W.  359;  Stupetski  v. 
Transatlantic  Fire  Ins.  Co.,  43  Mich.  373,  5  N.  W.  401;  Johnson  v. 


414  THE    CONTKACT    AND    ITS    INCIDENTS.  §  151 

vision  in  a  policy  that  if  tlie  insured  premises  slioiild  cease  to 
be  occuiDied,  or  should  become  vacant  and  unoccupied,  the 
policy  should  be  void,  has  no  application  to  the  vacancy  of  a 
house  unoccupied  at  the  time  it  was  insured  and  not  there- 
after used  as  a  residence  up  to  the  time  of  the  loss,  or  which 
is  insured  as  "unoccupied." ^^^ 

Prohibited  Use. 

When  a  policy  contains  no  express  prohibition  of  change 
in  the  use  of  the  insured  building,  the  fact  that  at  the  time 
of  the  loss  it  was  used  for  a  different  purpose  than  that  men- 
tioned in  the  policy,  does  not  per  se  avoid  the  policy.^ ^^  Naph- 
tha is  not  "kept"  but  "used"  on  the  premises,  within  the 
meaning  of  an  insurance  policy,  where  for  nearly  four  weeks 
a  naphtha  torch  is  used  in  burning  the  paint  on  the  insured 
building,  preparatory  to  repainting.  The  word  "kept"  im- 
plies a  use  of  the  premises  as  a  place  of  deposit  for  the  pro- 
hibited articles,  for  a  considerable  time.^^^  Where  a  policy 
contains  a  provision  that  if  the  building  shall  be  used  as  a 
storehouse  the  rate  of  insurance  will  be  changed,  and  the  in- 

Norwalk  Fire  Ins.  Co.,  175  Mass.  529,  56  N.  E.  569;  Cummins  v. 
Agricultural  Ins.  Co.,  67  N.  Y.  260;  Moody  v.  Amazon  Ins.  Co.,  52 
Ohio  St.  12,  26  L.  R.  A.  313. 

'"Bennett  v.  Agricultural  Ins.  Co.,  106  N.  Y.  243;  Hilton  v.  Phcenlx 
Assur.  Co.,  92  Me.  272,  42  Atl.  412.  As  to  effect  of  a  provision  that 
the  policy  shall  be  void  if  the  building  be  or  become  vacant  or  un- 
occupied, and  so  remain  for  ten  days,  when  the  vacancy  exists  at 
the  time  of  effecting  the  insurance,  see  Clifton  Coal  Co.  v.  Scottish 
U.  &  N.  Ins.  Co.,  102  Iowa,  300,  71  N.  W.  433;  Home  Fire  Ins.  Co.  v. 
Kuhlman,  58  Neb.  488,  78  N.  W.  936.  For  construction  of  vacancy 
clause  in  Minnesota  standard  policy,  see  Doten  v.  Aetna  Ins.  Co.,  77 
Minn.  474,  80  N.  W.  630.  For  Ohio  standard  policy,  see  Moody  v. 
Amazon  Ins.  Co.,  52  Ohio  St.  12,  26  L.  R.  A.  313. 

=='  Martin  v.  Capital  Ins.  Co.,  85  Iowa,  643,  52  N.  W.  534. 

''■*  First  Congregational  Church  v.  Holyoke  Mut.  Fire  Ins.  Co.,  158 
Mass.  475;  Williams  v.  New  England  Mut.  Fire  Ins.  Co.,  31  Me.  219. 


§  151  STIPULATIONS    OF    POLICY.  415 

surer  knew  of  the  use  of  the  buikling  for  storage,  the  policy 
will  not  be  avoided.^ ^^  Where  a  contract  of  insurance  by  the 
written  portion  covers  property  to  be  used  in  conducting  a  par- 
ticular business,  the  keeping  of  an  article  ordinarily  and 
necessarily  used  in  such  business  will  not  avoid  the  policy, 
even  though  expressly  prohibited  in  the  printed  conditions.^ ^® 
If  in  the  descriptive  clause  of  the  policy  the  thing  insured 
be  mentioned  in  general  terms  (as,  for  instance,  a  stock  of 
watchmaker's  or  photographer's  materials),  and  there  be 
nothing  in  the  policy  itself  indicating  with  exactness  what 
articles  were  embraced  in,  and  intended  to  be  covered  by, 
such  general  terms,  parol  evidence  is  admissible  to  explain 
the  ambiguity,  and  to  apply  the  policy  to  the  subject  of  t'he  in- 
surance. If  the  written  agreement  is  full,  explicit,  and  un- 
ambiguous, it  must  be  taken  as  conclusively  representing  the 
real  contract  of  the  parties,  and  neither  will  be  permitted 
by  parol  to  vary  its  terms.  If  for  w^ant  of  fullness  of  state- 
ment the  contract  is  indefinite  or  uncertain,  parol  evidence  is 
admissible,  not  to  vary,  add  to  or  take  from  the  contract,  but  to 
explain  and  make  apparent  the  real  intention  of  the  parties.^ ^^ 
But  if  a  policy  read  "on  general  merchandise,  consisting  of 
dry  goods,  clothing,  and  groceries,"  and  expressly  prohibiting 
the  keeping  of  gunpowder,  it  is  not  sufficient  to  show  that 
gunpowder  is  included  by  usage  and  custom  under  the  words 
"general  merchandise,"  but  it  must  be  shown  that  it  is  in- 
cluded under  the  specific  words   "dry  goods,  clothing  and 

•  5  9''  9Q 

groceries.   ^^'^^ 

'"'  Steers  v.  Home  Ins.  Co.,  38  La.  Ann.  952. 

=="  Faust  V.  American  Fire  Ins.  Co.,  91  Wis.  158,  64  N.  W.  883. 

'"Peoria  M.  &  F.  Ins.  Co.  v.  Hall,  12  Mich.  202;  Maril  v.  Connecti- 
cut Fire  Ins.  Co.,  95  Ga.  604;  Harper  v.  New  York  City  Ins.  Co.,  22 
N.  Y.  441;  Hall  v.  Insurance  Co.  of  North  America,  58  N.  Y.  292,  17 
Am.  Rep.  255;  Faust  v.  American  Fire  Ins.  Co.,  91  Wis.  158. 

»^»  Liverpool  &  L.  &  G.  Ins.  Co.  v.  Van  Os,  63  Miss.  431. 


416  THE   CONTKACT    AND   ITS   INCIDENTS.  §  151 

The  oondition  in  a  policy,  issued  to  a  silver-plating  com- 
pany, on  the  tools  and  machinery  in  its  factory,  "that  this 
entire  policy,  unless  otherwise  indorsed  hereon,  or  added 
hereto,  shall  be  void  if  (any  usage  or  custom  of  trade  or  manu- 
facture to  the  contrary  notwithstanding)  there  be  kept,  used 
or  allowed  on  the  premises,  gasoline,  etc.,"  does  not  preclude 
the  use  of  gasoline,  it  being  so  used  at  the  date  of  the  policy, 
and  the  use  being  necessary,  and  only  a  necessary  amount  be- 
ing brought  into  the  factory  at  a  given  time.^^^  But  it  has 
been  held  that  under  a  clause  in  a  policy  providing  that  fire- 
Avorks  should  not  be  covered  by  the  insurance  therein  included, 
under  the  name  of  "fire-crackers,"  which  were  permitted  to 
be  kept,  it  cannot  be  sho^vn  that  they  constitute  an  article  in 
the  line  of  business  of  the  insured  described  in  the  policy.^^^ 

A  policy  allowing  kerosene  to  be  stored  on  the  premises  only 
for  "lights,"  "lamps  to  be  filled  and  trimmed  by  daylight, 
only,"  forbids  drawing  kerosene  by  lamplight  for  sale  or  loan, 
when  this  act  results  in  an  explosion  which  destroys  the  build- 
ing insured,^^^  A  provision  voiding  a  policy  upon  a  stock 
of  goods  in  a  store  if  gasoline  is  kept  on  the  premises,  covers 
the  taking  it  to  the  store  to  be  used  in  a  gasoline  stove,  in  an 
up-stairs  room,  having  no  direct  connection  with  the  store,  but 
reached  by  an  outside  stairway.^^^     A  clause  prohibiting  the 

'-'  Fraim  v.  National  Fire  Ins.  Co.,  170  Pa.  St.  151,  32  All.  613. 

^^"Steinbach  v.  Relief  Fire  Ins.  Co.,  13  Wall.  (U.  S.)  183.  See, 
also,  as  to  prohibited  articles  in  connection  with  general  description 
of  property  insured,  Bentley  v.  Lumbermen's  Ins.  Co.,  191  Pa.  St. 
276,  43  Atl.  209;  Davis  v.  Pioneer  Furniture  Co.,  102  Wis.  394,  78 
N.  W.  596;  American  Cent.  Ins.  Co.  v.  Green,  16  Tex.  Civ.  App.  531, 
41  S.  W.  74;  Fischer  v.  London  &  L.  Fire  Ins.  Co.,  83  Fed.  807; 
Snyder  v.  Dwelling  House  Ins.  Co.,  59  N.  J.  Law,  544,  37  Atl.  1022; 
London  &  L.  Fire  Ins.  Co.  v.  Fischer  (C.  C.  A.),  92  Fed.  500;  Me- 
chanics' &  Traders'  Ins.  Co.  v.  Floyd  (Ky.),  49  S.  W.  543. 

^^'  Gunther  v.  Liverpool  &  L,  &  G.  Ins.  Co.,  34  Fed.  501. 

»'=Boyer  v.  Grand  Rapids  Fire  Ins.  Co.  (Mich.),  83  N.  W.  12i. 


§  151  8TIPULATI0XS    OF    POLICY.  417 

use  of  wood,  except  to  start  an  engine,  forbids  tLe  use  of  it  as 
fuel  for  operating  purposes,  even  for  a  short  time.^^^ 

Increase  of  Risk  or  Hazard. 

Policies  of  insurance,  unless  the  language  excludes  the 
presumption,  must  be  presumed  to  be  made  with  reference  to 
the  character  and  nature  of  the  property  insured,  and  to  the 
for  which  such  property  is  ordinarily  held  and  used.  The 
owner's  use  of  it  in  the  ordinary  manner,  and  for  the  purpose* 
insurer  assumes  all  the  risk  incident  to  such  use,  considering 
the  nature  of  the  property,  and  the  purposes  to  which  it  is 
adapted,  and  liable  to  be  put.  A  condition  against  increase 
of  risk  refers  to  an  increase  beyond  that  which  the  company 
assumes.^^^  A  statement  in  a  policy  of  fire  insurance  that 
the  building  is  used  for  a  specific  purpose,  amounts  to  a 
warranty  that  it  was  so  used  at  the  time  the  jwlicy  was  issued, 
but  it  does  not  warrant  the  continuance  of  such  use  during  the 
existence  of  the  insurance.^^^  A  substantial  compliance  with 
a  continuing  covenant  against  increase  of  risk,  whereby  the 
risk  is  not  increased,  is  sufficient.^^^  But  a  substantial  breach 
will  avoid  a  policy,  even  where  the  transaction  constituting  the 
breach  in  no  way  contributes  to  the  loss.^^'^  Whether  the  haz- 
ard and  risk  is  increased  by  a  certain  new  use  of  a  building, 

^  Thurston  v.  Burnett  &  B.  D.  F.  Mut.  Fire  Ins.  Co.,  98  Wis.  476, 
74  N.  W.  131.  See,  also,  as  to  prohibited  use,  Greenwich  Ins.  Co.  v. 
Dougherty  (N.  J.),  42  Atl.  485;  Olson  v.  St.  Paul  F.  &  M.  Ins.  Co., 
35  Minn.  432;  Kelley  v.  Worcester  Mut.  Fire  Ins.  Co.,  97  Mass.  284. 

''*  Holbrook  v.  St.  Paul  F.  &  M.  Ins.  Co.,  25  Minn.  229. 

^'^  Baker  v.  German  Fire  Ins.  Co.,  124  Ind.  490,  24  N.  E.  1041; 
Herrick  v.  Union  Mut.  Fire  Ins.  Co.,  48  Me.  558;  Cumberland  Valley 
Mut.  Protection  Co.  v.  Douglas,  58  Pa.  St.  419;  Wynne  v.  Liverpool 
&  L.  &  G.  Ins.  Co.,  71  N.  C.  121;  Germania  Fire  Ins.  Co.  v.  Deckard, 
3  Ind.  App.  361,  28  N.  E.  868. 

""Bankhead  v.  Des  Moines  Ins.  Co.,  70  Iowa,  387. 

"'  Kircher  v.  Milwaukee  Mechanics'  Mut.  Ins.  Co.,  74  Wis.  470. 

KERR,  INS.— 27 


418  THE   CONTKACT   AND   ITS   IXCIDENTS.  §  TSl 

or  a  cliange  in  tlie  siii'rounding  circumstances,  is  a  question 
of  fact  to  be  determined  hj  a  jury,  and  the  opinion  of  ex- 
perts is  not  conclusive  upon  the  question.^^^  But  it  has 
heen  held  that  men  experienced  in  the  insurance  business 
may  give  their  opinion  as  to  whether  or  not  a  certain  change 
in  the  use  of  the  insured  premises  increases  the  risk.^^^  A 
provision  avoiding  a  policy  if  the  hazard  is  increased  by  the 
erection  of  a  contiguous  building  does  not  include  the  erection 
of  a  building  twenty-five  feet  away.^^"  In  order  to  charge 
the  insured  with  the  duty  of  giving  notice  of  increase  of  risk, 
it  must  be  shown  that  he  had  actual  knowledge  thereof.^ ^^ 
Conditions  avoiding  the,  policy  in  case  of  increase  of  risk 
without  the  consent  of  the  company,  apply  only  to  the  premises 
insured,  or  to  the  property  under  the  control  of  the  insured.^'*^ 
Mere  temporary  change  in  the  use  and  occupation  of  premises, 
Avhich  does  not  in  any  way  contribute  to  the  loss,  is  not  within 
an  inhibition  against  an  increase  of  risk.^^^  But  a  material 
change  in  the  hazard,  so  great  as  to  be  apparent  to  one  of 
ordinary  intelligence,  will  relieve  the  insurer  from  liabil- 

^'^  Joyce  V.  Maine  Ins.  Co.,  45  Me.  168;  Kircher  v.  Milwaukee  Me- 
chanics' Mut.  Ins.  Co.,  74  Wis.  470. 

=="  Russell  V.  Cedar  Rapids  Ins.  Co.,  78  Iowa,  216.  See,  also.  Plant- 
ers' Mut.  Ins.  Co.  V.  Rowland,  66  Md.  236. 

=«  Olson' V.  St.  Paul  F,  &  M.  Ins.  Co.,  35  Minn.  432;  Crete  Farmers' 
Mut.  Township  Ins.  Co.  v.  Miller,  70  111.  App.  599. 

^^  Rife  V.  Lebanon  Mut.  Ins.  Co.,  115  Pa.  St.  530.  If  an  uninsured 
building  is  damaged  during  the  life  of  the  policy  by  other  causes 
than  those  insured  against,  so  as  to  increase  the  hazard  of  the  risk, 
and  the  insurer,  with  the  knowledge  of  these  facts,  does  not  cancel 
the  policy,  it  will  sometimes  be  held  for  a  subsequent  loss  by  fire. 
Fireman's  Fund  Ins.  Co.  v.  Congregation  Rodepfi  Sholom,  80  111.  558. 

^^  State  Ins.  Co.  v.  Taylor,  14  Colo.  499,  20  Am.  St.  Rep.  281. 

'« Adair  v.  Southern  Mut.  Ins.  Co.,  107  Ga.  297,  33  S.  E.  78,  45  L. 
R.  A.  207;  Holbrook  v.  St.  Paul  F.  &  M.  Ins.  Co.,  25  Minn.  229; 
Angler  v.  Western  Assur.  Co.,  10  S.  D.  82,  71  N.  W,  761;  First  Con- 
gregational Church  V.  Holyoke  Mut.  Fire  Ins.  Co.,  158  Mass.  475. 


§  151  STIPULATIONS    OF   rOLICY. 


419 


itj.^^^  The  existence  of  a  cliattel  mortgage  upon  insured 
property  is  of  itself  an  increase  of  risk,  and  a  decrease  of  the 
security  of  the  insurer,  even  though  no  right  of  action  has 
accrued  on  the  mortgage.^^^  If  a  policy  stipulates  that  it 
shall  be  void  in  case  the  risk  be  increased,  an  increase  of  risk 
will  relieve  the  insurer,  although  it  may  in  no  way  have  con- 
tributed to  the  loss,^^*^  The  vacancy  of  an  insured  building 
has  been  held  to  increase  the  risk,  as  a  matter  of  law;^'*'^  and 
the  use  of  naphtha  in  burning  paint  off  an  insured  build- 
ing ;^^'^  and  the  storing  of  loose  unbaled  hay;^^^  or  fire- 
works.^^^ 

A  policy  providing  that  it  shall  become  void  in  case  the 
situation  or  circumstances  affecting  the  risk  shall  be  altered 
so  as  to  increase  the  hazard,  with  the  knowledge  or  consent 
of  the  insured,  and  without  the  assent  of  the  insurer,  is  ren- 
dered absolutely  void  by  a  temporary  increase  of  risk,  caused 
by  the  manner  of  using  the  premises,  and  which  is  not  a 
casual,  inadvertent,  or  unavoidable  use,  and  the  policy  will 

^"  Thurston  v.  Burnett  &  B.  D.  F.  Mut.  Fire  Ins,  Co.,  98  Wis,  476, 
41  L,  R,  A.  316, 

'«Lee  V.  Agricultural  Ins.  Co.,  79  Iowa,  379,  44  N,  W.  683. 

^  Martin  v.  Capital  Ins.  Co,,  85  Iowa,  643,  52  N,  W.  534, 

'"  White  V,  Phoenix  Ins,  Co,,  83  Me.  279,  22  Atl,  167,  85  Me,  97,  26 
Atl.  1049.  Compare  Jones  v.  Granite  State  Fire  Ins.  Co.,  90  Me.  40, 
37  Atl.  327. 

'**  First  Congregational  Church  v,  Holyoke  Mut.  Fire  Ins.  Co.,  158 
Mass.  475, 

^*^  Dittmer  v,  Germania  Ins.  Co,,  23  La.  Ann.  458, 

"^^Betcher  v.  Capital  Fire  Ins,  Co.,  78  Minn,  241;  Steinbach  v.  Re- 
lief Fire  Ins,  Co.,  13  Wall,  (U.  S.)  183.  As  to  what  constitutes  in- 
crease of  risk,  see  Brighton  Mfg.  Co.  v.  Reading  Fife  Ins.  Co.,.  33. 
Fed.  232;  Bowlus  v.  Phenix  Ins,  Co.,  133  Ind.  106,  20  L.  R.  A.  400; 
Kister  v,  Lebanon  Mut.  Ins.  Co.,  128  Pa.  St.  553,  5  L.  R,  A,  646; 
Martin  v.  Capital  Ins,  Co.,  85  Iowa,  643,  52  N,  W.  534;  Adair  v. 
Southern  Mut.  Ins.  Co.,  107  Ga.  297,  33  S.  E.  78,  45  L.  R.  A.  207; 
Luce  V.  Dorchester  Mut.  Fire  Ins.  Co.,  110  Mass.  361. 


420  THE   CONTKACT   AND   ITS   INCIDENTS.  §  1^1 

not  revive  upon  tlie  cessation  of  such  increase  of  risk  before  tlie 
destruction  of  the  property  by  iire.^^^ 

Operation  of  Factory  or  Business. 

Construing  a  condition  against  vacancy  or  non-operation  In 
view  of  tlie  subject  matter  of  the  contract  and  its  ordinary 
incidents,  it  lias  been  held  that  a  saw  mill  lying  idle  tem- 
porarily for  lack  of  water  or  logs  to  manufacture,  while  the 
logs  were  expected  daily,  did  not  cease  to  be  operated  ;'^^^  nor 
a  mill  shut  down  for  temporary  repairs  f^^  or  for  want  of  a 
supply  of  materials,^^^  or  because  of  the  prevalence  of  dis- 
ease.^^^  A  condition  in  a  fire  insurance  policy,  forbidding 
the  cessation  of  the  operation  of  the  insured  establishment 
without  the  consent  of  the  insurer,  and  providing  for  the  care 
and  supervision  of  the  workmen,  and  also  providing  that  a 
breach  of  such  condition  should  avoid  the  policy,  is  broken 
and  the  insurance  terminated  when  the  business  is  discon- 
tinued, and  the  operation  of  the  establishment  has  ceased 
without  the  consent  of  the  insurer,  although  watchmen  are 

'^^Kyte  V.  Commercial  Union  Assur.  Co.,  149  Mass.  116;  Fabyan  v. 
Union  Mut.  Fire  Ins.  Co.,  33  N.  H.  203;  Cronin  v.  Fire  Ass'n  of 
Philadelphia,  123  Mich.  277,  82  N.  W.  45;  Imperial  Fire  Ins.  Co.  v. 
Coos  County,  151  U.  S.  452;  Carey  v.  German  Am.  Ins.  Co.,  84  Wis. 
80;  Betcher  v  Capital  Fire  Ins.  Co.,  78  Minn.  241.  But  see  Mutual 
Fire  Ins.  Co.  v.  Coatesville  Shoe  Factory,  80  Pa.  St.  412;  Lane  v. 
Maine  Mut.  Fire  Ins.  Co.,  12  Me.  44;  Insurance  Co.  of  North  America 
V.  McDowell,  50  111.  120;  American  Fire  Ins.  Co.  v.  Brighton  Cotton 
Mfg.  Co.,  125  111.  131;  Moore  v.  Phoenix  Ins.  Co.,  62  N.  H.  240;  Hop- 
kins V.  Phoenix  Ins.  Co.,  78  Iowa,  344. 

='2  City  P.  &  S.  Mill  Co.  v.  Merchants'  M.  &  C.  Mut.  Fire  Ins.  Co., 
72  Mich.  654.  40  N.  W.  777;  Whitney  v.  Black  River  Ins.  Co.,  72 
N.  Y.  117. 

*''Day  V.  Mill-Owners'  Mut.  Fire  Ins.  Co.,  70  Iowa,  710;  Brighton 
Mfg.  Co.  V.  Redding  Fire  Ins.  Co.,  33, Fed.  232. 

^  American  Fire  Ins.  Co.  v.  Brighton  Cotton  Mfg.  Co.,  125  111.  131. 

'"Poss  V.  Western  Assur.  Co.,  7  Lea  (Tenn.),  704,  40  Am.  Rep.  68. 


§  151  STIPULATIONS    OF    POLICY.  421 

provided  and  kept  continuously  nntil  the  fire  and  loss  oc- 
curs.^^^ 

To  constitute  occupancy  of  a  building  for  manufacturing 
purposes  there  must  be  some  practical  use  or  employment  of 
the  property  for  those  purposes.^^'^  Machinery  and  apparatus 
used  in  tie  business  of  manufacturing  leather  and  morocco, 
including  a  boiler  and  engine,  etc.,  do  not  constitute  a  mill  or 
manufactory.^^^ 

Kesidence  and  Travel. 

An  insured  has  the  right  to  reside  in  a  foreign  country 
without  further  permission  or  payment,  where  the  policy  and 
application  described  him  as  residing  there,  although  he  is 
specially  permitted  by  the  policy  to  travel  in  other  places, 
and  an  indorsement  in  the  policy  gives  him  permission  to 
travel  there  upon  the  payment  of  a  certain  sum.^^^  The 
expression  ''settled  limits  of  the  United  States"  means  the 
established  boundary  of  the  Union,  and  includes  territory 
beyond  the  region  of  actual  settlement,  and  within  the  geo- 
graphical limits  of  the  country.=^^^  A  policy  conditioned  to 
be  void  if  the  assured  should  pass  the  limits  of  the  United 
States  was  indorsed  with  a  permission  to  the  insured  to  voyage 

»'' Dover  Glass  Works  Co.  v.  American  Fire  Ins.  Co.,  1  Marvel 
(Del.),  32,  65  Am.  St.  Rep.  264.  See,  also,  Halpin  v.  Phenix  Ins. 
Co.,  118  N.  Y.  165;  Halpin  v.  Aetna  Fire  Ins.  Co.,  120  N.  Y.  70; 
Cronin  v.  Fire  Ass'n  of  Philadelphia,  123  Mich.  277,  82  N.  W.  45. 

»"  Halpin  v.  Phenix  Ins.  Co.,  118  N.  Y.  165.  Compare  American 
Fire  Ins.  Co  v.  Brighton  Cotton  Mfg.  Co.,  125  111.  131;  Moore  v. 
Phoenix  Fire  Ins.  Co.,  64  N.  H.  140. 

»=-»  Halpin  v.  Aetna  Fire  Ins.  Co.,  120  N.  Y.  70.  See  Phenix  Ins.  Co. 
V.  Holcombe,  57  Neb.  622,  78  N.  W.  300.  As  to  waiver  of  provisions, 
see  Improved  Match  Co.  v.  Michigan  Mut.  Fire  Ins.  Co.,  22  Mich.  256, 
80  N.  W.  1088. 

'^"Forbes  v.  American  Mut.  Life  Ins.  Co.,  15  Gray  (Mass.),  249,  77 

Am.  Dec.  360. 

'«"  easier  v.  Connecticut  Mut.  Life  Ins.  Co.,  22  N.  Y.  427. 


422  THE    CONTKACT    AND    ITS    INCIDEXTS.  §  151 

to  California  and  home,  via  Cape  Horn  or  Vera  Criiz,  The 
insured  returned  by  way  of  Panama,  the  safest  and  shortest 
route.  The  deviation  avoided  the  ]X)licy.^^^  The  policy 
fixes  the  terms  upon  which  the  promise  of  the  assured  would 
be  binding,  and  upon  which  it  should  be  annulled.  By  those 
terms  the  parties  are  bound.  Where  there  is  a  breach  of  the 
condition  the  contract  is  rendered  void.^^^  A  license  to  pass 
by  sea  in  first  class  vessels,  allows  traveling  as  a  steerage 
passenger.^^^  A  policy  pennitting  residence  in  certain  pre- 
scribed localities  during  the  entire  year,  prohibited  residence 
elsewhere  during  certain  portions  of  the  year,  and  authorized 
the  insured  to  tra^'el  by  regular  routes  to  and  from  any  place 
within  the  prescribed  limits,  but  provided  that  if  he  should 
pass  beyond  or  be  without  those  limits  the  policy  should  be 
void.  Assured  thereafter  obtained  permission  to  reside  be- 
yond those  limits.  On  his  way  home  he  stopped  within  the 
prohibited  limits  to  consult  a  physician,  and  on  his  advice  went 
to  the  home  of  a  friend,  where  he  died.  It  was  held  that  the 
insured  was  prohibited  from  passing  beyond  or  being  without 
the  regions  of  permitted  residence,  except  to  go  as  a  passenger 
by  the  usual  routes  between  j)orts  and  places  within  those 
regions,  and  that  whether  the  stopping  at  a  prohibited  place  of 
residence  to  consult  a  physician  and  on  his  advice  remaining 
over  for  treatment  and  rest  was  an  interruption  of  the  journey, 
made  a  mixed  question  of  law  and  fact  for  a  jury.^^*  In  an 
action  upon  a  life  policy,  indorsed  upon  which  was  a  permit 
to  the  insured  to  reside  in  "any  part  of  the  United  States,  to 

""^Hathaway  v,  Trenton  Mut.  Life  &  Fire  Ins.  Co.,  11  Cush. 
(Mass.)  448. 

=•==  Nightingale  v.  State  Mut.  Life  Ins.  Co.,  5  R.  I.  38;  Barrett  v. 
Union  Mut.  Fire  Ins.  Co.,  7  Cush.   (Mass.)  175. 

'"^Taylor  v.  Aetna  Life  Ins.  Co..  13  Gray  (Mass.),  434. 

'•^Converse  v.  Knights  Templars  &  M.  Life  Ind.  Co.  (C.  C.  A.),  93 
Fed.  148. 


§  151  STIPULATIONS    OF    POLICY.  423 

be  North  of  the  South  bounds  of  Virginia  hj  the  10th  of  July, 
1854,"  it  appeared  that  on  the  11th  day  of  June,  1854,  the 
insured,  then  in  Florida,  was  taken  sick  and  became  unable 
to  start  North,  and  died  on  July  20th,  1854 ;  that  his  sickness 
was  the  sole  cause  of  his  not  returning  North,  and  that  he  was 
not  guilty  of  any  default  or  neglect.  Held,  that  the  sickness 
and  death  being  the  visitation  of  God,  the  license  was  not 
broken,  and  the  insurers  were  liable.^^^ 

Limitations  as  to  Time  of  Bringing  Suit. 

Conditions  of  policies  of  insurance  to  the  effect  that  no  suit 
shall  be  brought  within  a  certain  time  after  the  happening  of 
the  event  insured  against,  and  limiting  the  time  within  which 
suit  must  be  brought,  if  at  all,  are  valid  and  binding,  even 
though  they  be  in  conflict  with  the  statute  of  limitations  of 
the  state  wherein  the  action  is  brought.^^^  A  policy  limiting 
the  time  for  bringing  an  action  for  the  recovery  of  any  claim 
thereon,  includes  an  action  upon  a  special  agreement  of  the 
company  to  pay  the  indemnity,  after  it  had  denied  all  lia- 
bility f^"^  and  is  not  affected  by  a  statute  relative  to  the  bring- 
ing of  a  second  action  within  a  year  after  the  reversal  of  the 
first  action.^^^  In  order  to  determine  the  limitations  of  a 
policy  upon  bringing  suit,  all  its  provisions  Avill  be  construed 

'"Baldwin  v.  New  York  Life  Ins,  &  Trust  Co.,  3  Bosw,  (N,  Y.) 
530.  See,  also,  Rainsford  v.  Royal  Ins.  Co.,  33  N.  Y.  Super.  Ct.  453; 
Home  Life  Ins.  Co.  v.  Pierce,  75  111.  426;  Bevin  v.  Connecticut  Mut. 
Life  Ins.  Co.,  23  Conn.  244. 

'"« Virginia  F.  &  M.  Ins.  Co.  v.  Wells,  83  Va.  736;  Bish  v.  Hawkeye 
Ins.  Co.,  69  Iowa,  184,  28  N.  W.  553;  John  Morrill  &  Co.  v.  New  Eng- 
land Fire  Ins.  Co.,  71  Vt.  281,  44  Atl.  358;  Wilson  v.  Aetna  Ins.  Co., 
27  Vt.  99. 

«"  Grier  v.  Northern  Assur.  Co.,  183  Pa.  St.  334,  39  Atl.  10, 

"« Hocking  v.  Howard  Ins.  Co.,  130  Pa.  St,  170;  Travelers'  Ins,  Co. 
V.  California  Ins.  Co.,  1  N.  D.  151, 


424:  THE   CONTKACT   AND    ITS   INCIDENTS.  §  151 

togetlier,  and  will  be  strictly  constnied  against  the  insurer, 
and  liberally  construed  in  favor  of  the  insured.^^^ 

The  authorities  are  in  irreconcilable  conflict  as  to  whether 
a  stipulation  that  suit  can  be  brought  on  a  policy  only  within 
a  given  time  after  the  "fire"  or  "loss,"  gives  the  insured  the 
specified  time  after  the  happening  of  the  fire,  or  the  full  time 
after  the  accmal  of  his  right  of  action,  where  the  policy  pro- 
vides that  the  amount  due  shall  not  be  payable  until  notice 
and  proofs  have  been  served,  or  some  other  condition  required 
of  the  insured  has  been  performed.  In  deciding  upon  this 
point  much  stress  seems  to  have  been  laid  upon  the  differ- 
ence between  the  word  "fire"  and  the  word  "loss,"  and  the 
difference  between  the  phrase  "fire  occurs,"  and  the  phrase 
"loss  occurs."  In  Hart  v.  Citizens'  Ins.  Co.,^'^*^  it  was  held, 
that  a  provision  requiring  suit  upon  a  policy  to  be  brought 
within  "twelve  months  after  the  fire"  requires  the  time 
to  be  computed  from  the  date  of  the  fire,  and  not  from 
the  time  the  loss  is  ascertained  and  established.  The  court 
said :  "It  is  well  settled  that  a  clause  in  a  contract,  limiting 

^"^  Kratzenstein  v.  "Western  Assur.  Co.,  116  N.  Y.  54. 

""86  Wis.  77.  The  policy  contained  this  provision:  "Loss  shall 
not  become  payable  until  sixty  days  after  the  notice.  *  ■  *  *  No 
suit  or  action  *  *  *  shall  be  sustained  *  *  *  until  after  full 
compliance  by  the  insured  with  all  the  foregoing  requirements,  nor 
unless  commenced  within  twelve  months  next  after  the  fire."  In 
further  support  of  this  case,  see  Egan  v.  Oakland  Home  Ins.  Co.,  29 
Or.  40.3,  42  Pac.  990,  42  Cent.  Law  J.  221,  25  Ins.  Law  J.  534;  Mc- 
Farland  v.  Railway  O.  &  E.  Ace.  Ass'n,  5  Wyo.  126,  27  L.  R.  A.  49; 
Sun  Ins.  Co.  v.  Jones,  54  Ark.  376;  Garido  v.  American  Cent.  Ins.  Co. 
(Cal.),  8  Pac.  512;  Fullam  v.  New  York  Union  Ins.  Co.,  7  Gray 
(Mass.),  61;  Rottier  v.  German  Ins.  Co.  (Minn.),  86  N.  W.  888. 
Opposed  to  Wisconsin  case,  see  Sun  Ins.  Co.  v.  Jones,  54  Ark.  376; 
Murdock  v.  Franklin  Ins.  Co.,  33  W.  Va.  407,  7  L.  R.  A.  572;  Read  v. 
State  Ins.  Co.,  103  Iowa,  307,  72  N.  W.  665.  See,  also,  Rogers  v.  Home 
Ins.  Co.,  95  Fed.  109,  35  C.  C.  A.  402;  Rogers  v.  Aetna  Ins.  Co.,  95 
Fed.  103.  35  C.  C.  A.  396,  and  note  404. 


§  151  STIPULATIONS    OF    POLICY.  425 

the  time  within  which  an  action  may  be  commenced  thereon, 
to  a  time  shorter  than  that  allowed  by  the  statute  of  limita- 
tions is  valid.     The  question  here  is  whether  the  expression 
'twelve  months  after  the  fire'  means  what  it  says  or  something 
else.     It  is  to  be  noticed  that  the  parties  here  have  not  used 
the  expression  'after  the  loss  occurs.'     Had  this  been  the 
language  used,  it  might  reasonably  be  claimed,  uixtn  authority, 
that  the  'loss  occurs'  not  at  the  date  of  the  fire,  but  when  the 
loss  is  ascertained  and  established,  and  the  right  to  bring  an 
action  exists.^^^^     *     *     *     There  are,  however,  many  de- 
cisions to  the  contrary.^^2     Other  cases,  bearing  more  or  less 
directly  on  the  question,  might  be  cited  upon  either  side  of 
the  proposition.     It  seems  apparent  that  it  can  hardly  be 
said  that  the  great  weight  of  authority  is  on  either  side. 
*     *     *     Doubtless  the  tendency  of  so  many  courts  to  con- 
strue the  term  'loss'  as  meaning  the  time  when  liability  was 
fixed,  induced  many  insurance  companies  to  substitute  the 
word  'fire'  as  in  the  policy  before  us.     It  would  seem  as  if 
the  phrase  'twelve  months  next  after  the  fire'  was  susceptible 
of  but  one  meaning,  yet  the  courts  have  disagreed  upon  this 
question,  also.     In  the  following  cases  it  has  been  held  that 
the  word  'fire'  is  to  be  construed  as  meaning  not  the  date  of 
the  fire,  but  the  time  when  liability  is  fixed,  and  an  action  ac- 

"^  Citing  Steen  V.  Niagara  Fire  Ins.  Co.,  89  N.  Y.  316;  Spare  v. 
Home  Mut.  Ins.  Co.,  17  Fed.  568;  Cliandler  v.  St.  Paul  F.  &  M.  Ins. 
Co.,  21  Minn.  85;  Ellis  v.  Council  Bluffs  Ins.  Co.,  64  Iowa,  507;  Ger- 
man Ins.  Co.  V.  Fairbank,  32  Neb.  750;  Barber  v.  Fire  &  Marine  Ins. 
Co.  of  Wheeling,  16  W.  Va.  658,  37  Am.  Rep.  800. 

="  Citing  Chambers  v.  Atlas  Ins.  Co.,  51  Conn.  17,  50  Am.  Rep.  1; 
Johnson  v.  Humboldt  Ins.  Co.,  91  111.  92,  33  Am.  Rep.  47;  Fullam  v. 
New  York  Union  Ins.  Co.,  7  Gray  (Mass.),  61;  Glass  v.  Walker,  66 
Mo.  32;  Bradley  v.  Phoenix  Ins.  Co.,  28  Mo.  App.  7;  Virginia  F.  &  M. 
Ins.  Co.  V.  Wells,  83  Va.  736;  Peoria  Sugar  Refining  Co.  v.  Canada 
F.  &  M.  Ins.  Co.,  12  Ont.  App.  418;  Travelers'  Ins.  Co.  v.  California 
Ins.  Co.,  1  N.  D.  151,  8  L.  R.  A.  769. 


426  THE    CONTRACT    AND   ITS    INCIDENTS.  §  151 

cnies  to  the  iiisured.^^^  On  the  other  hand  the  followino-  cases 
hold  that  the  limitation  begins  to  rnn  from  the  date  of  the 
gpg_37  4  *  *  *  It  is  noticeable  that  all  of  the  three  cases 
above  cited,  which  hold  that  ^fire'  means  the  time  when  lia- 
bility is  fixed,  rely  for  authority  upon  the  cases  which  con- 
strue the  word  'loss'  as  having  such  meaning.  No  attention 
seems  to  have  been  given  to  the  fact  that  the  word  'fire'  has 
been  substituted  for  the  word  'loss.'  *  *  *  Xhe  argu- 
ment in  support  of  this  view  is  briefly  that  all  clauses  of  the 
policy  must  be  construed  together ;  that  there  are  chaises  which 
necessitate  the  making  of  proofs,  the  submission  of  the  as- 
sured to  examination,  *  *  *  aj^,^  furthermore,  the  loss 
not  being  payable  until  sixty  days  after  the  amount  is  fixed, 
it  may  happen  that  more  than  twelve  months  may  elapse  after 
the  date  of  the  fire  before  the  company  can  be  sued,  and  thus 
the  plaintiff's  action  may  be  cut  off  entirely,  if  a  literal  mean- 
ing is  to  be  given  to  the  words.  The  deduction  is  that  the 
parties  cannot  have  meant  what  they  said  in  the  clause  under 
consideration,  but  must  have  meant  something  else,  which  they 
did  not  say.  We  cannot  assent  to  this  line  of  reasoning.  It 
does  violence  to  plain  words.  It  smacks  too  strongly  of 
making  a  contract  which  the  parties  did  not  make.  It  con- 
strues where  there  is  no  room  for  construction.  Plain,  unam- 
biguous words,  which  can  have  but  one  meaning,  are  not  sub- 
ject to  construction." 

The  time  of  death  by  accident,  and  not  the  time  when  the 
cause  of  action  accrues  on  a  policy  of  accident  insurance,  is 

^"Friezen  v.  Allemania  Fire  Ins.  Co.,  30  Fed.  352;  Hong  Sling  v. 
Royal  Ins.  Co.,  8  Utah,  135,  21  Ins.  Law  J.  718;  Case  v.  Sun  Ins.  Co., 
83  Cal.  473,  8  L.  R.  A.  48. 

^'^  Steel  V.  Phenix  Ins.  Co.,  47  Fed.  863;  State  Ins.  Co.  v.  Meesman, 
2  Wash.  459;  McElroy  v.  Continental  Ins.  Co.,  49  Kan.  200;  King  v. 
Watertown  Fire  Ins.  Co.,  47  Hun  (N.  Y.),  1. 


§  151  STIPULATIONS    OF    POLICY.  427 

the  time  from  which  is  to  be  computed  the  period  of  one  year 
from  the  date  of  the  happening  of  the  alleged  injury  within 
which  suit  must  he  brought  by  the  terms  of  the  policy,  al- 
though the  right  of  action  on  the  policy  did  not  accrue  until 
the  expiration  of  ninety  days  after  proof  of  injury.^'^^  A 
garnishment  proceeding  to  reach  the  proceeds  of  an  insurance 
policy,  must  be  brought  ^^'ithin  the  time  limited  for  bringing 
suit  upon  the  policy.^'*'  A  limitation  of  time  to  bring  suit 
on  a  policy  w^ill  not  bar  a  claim  upon  funds  in  the  hands  of  the 
assignee  for  creditors  of  the  company,  where  the  assignment 
is  made  within  the  limited  period,  though  the  claim  is  not 
filed  until  after  its  expiration.^ '''^  Such  a  stipulation  does  not 
affect  the  rights  of  an  intervenor  in  a  suit  brought  within  the 
proper  time.^^^  But  delay  in  the  bringing  of  an  action, 
which  has  been  caused  or  contributed  to  by  the  insurer  or 
its  duly  authorized  agents,  cannot  be  taken  advantage  of  by 
the  insurer  to  defeat  a  cause  of  action  on  the  policy  ;^T^  as 
the  absconding  of  the  officers  of  the  company,  thus  preventing 
service  ;^^^  or  fraud  in  obtaining  a  dismissal  of  an  action 
brought  in  time;^^^  or,  sometimes  and  upon  doubtful  author- 
ity, where  the  performance  of  the  condition  is,  without  fault  or 
laches  on  the  part  of  the  insured,  rendered  impossible  by  the 

'"McFarland  v.  Railway  O.  &  E.  Ace.  Ass'n,  5  Wyo.  126,  27  L.  R. 
A.  49;  Kettenring  v.  Northwestern  Masonic  Aid  Ass'n,  96  Fed.  177. 

""  Ritter  v.  Boston  Underwriters'  Ins.  Co.,  28  Mo.  App.  140. 

"'  In  re  St.  Paul  German  Ins.  Co.,  58  Minn.  163. 

^'  Stevens  v.  Citizens'  Ins.  Co.,  69  Iowa,  658. 

""Case  V.  Sun  Ins.  Co.,  83  Cal.  473,  8  L.  R.  A.  48;  Turner  v.  Fi- 
delity &  Casualty  Co.,  112  Mich.  425,  70  N.  W.  898,  38  L.  R.  A.  529; 
Mutual  Reserve  Fund  Life  Ass'n  v.  Tolbert  (Tex.  Civ.  App.),  33 
S.  W.  295;  Cochran  v.  London  Assur.  Corp.,  93  Va.  553,  25  S.  E.  597; 
Jackson  v.  Fidelity  &  Casualty  Co.,  21  C.  C.  A.  394,  75  Fed.  359; 
Matthews  v.  American  Cent.  Ins.  Co.,  154  N.  Y.  449;  Phenix  Ins. 
Co.  V.  Belt  Ry.  Co.,  82  111.  App.  265. 

'^''Taber  v.  Royal  Ins.  Co.,  124  Ala.  681,  26  So.  252. 

^^  Phenix  Ins.  Co.  v.  Belt  Ry.  Co.,  82  111.  App.  265. 


428  THE   CONTRACT    AND   ITS   INCIDENTS.  §  151 

acts  of  tlie  insurer,  or  even  by  the  act  of  God  or  of  the  govern- 
ment or  of  the  courts.^^^  But  the  mere  pendency  of  negotia- 
tions for  settlement  does  not  postpone  the  running  of  the  limi- 
tation f^^  nor  the  refusal  of  an  insurance  company  to  pay  a 
loss  or  recogTQze  its  liability  ;^^'^  nor  an  adjustment  of  the 
loss  f^^  nor  an  attempt  to  settle  the  claim  f^^  nor  the  failure 
of  the  insurer,  in  an  action  on  the  policy,  to  plead  that  it  was 
.prematurely  brought,  until  after  the  time  for  bringing  an 
action  on  the  policy,  as  fixed  by  its  tei-ms,  had  expired.^^^ 

After  it  has  denied  all  liability  upon  a  policy,  an  insurer 
cannot  asseiH;  the  plea  that  an  action  thereafter  commenced 
is  prematurely  brought  f^^  but  a  denial  of  liability  after  action 
brought  is  not  inconsistent  with  such  a  defense.^^^ 

A  statute  shortening  the  time  of  an  insurance  company's 
immunity  from  suit  to  forty  instead  of  ninety  days,  and  with- 

»'- Jackson  v.  Fidelity  &  Casualty  Co.,  21  C.  C.  A.  394,  75  Fed. 
365;  Thompson  v.  Phenix  Ins.  Co.,  136  U.  S.  287;  Semmes  v.  Hart- 
ford Ins.  Co.,  13  Wall.  (U.  S.)  158. 

'"' McFarland  v.  Peabody  Ins.  Co.,  6  W.  Va.  425;  Ritch  v.  Masons' 
Fraternal  Ace.  Ass'n,  99  Ga.  112,  25  S.  E.  191. 

^''^  Farmers'  Mut.  Fire  Ins.  Co.  v.  Barr,  94  Pa.  St.  345. 

=»'  Willoughby  v.  St.  Paul  German  Ins.  Co.,  68  Minn,  373,  71  N.  W. 
272. 

='«Law  V.  New  England  Mut.  Ace.  Ass'n,  94  Mich.  266,  53  N.  W. 
1104;  Blanks  v.  Hibernia  Ins.  Co.,  36  La.  Ann.  599;  Shackett  v.  Peo- 
ple's Mut.  Ben.  Soc,  107  Mich.  65,  distinguishing  Voorheis  v.  Peo- 
ple's Mut.  Ben.  Soc,  91  Mich.  469,  51  N.  W.  1109. 

"^^Wilhelmi  v.  Des  Moines  Ins.  Co.,  103  Iowa,  532,  72  N.  W.  685. 
Compare  Phenix  Ins.  Co.  v.  Belt  Ry.  Co.,  82  111.  App.  265. 

^'^  Standard  Loan  &  Ace.  Ins.  Co.  v.  Thornton,  97  Tenn.  1;  Hand 
V.  National  Live-Stock  Ins.  Co.,  57  Minn.  519;  Vore  v.  Hawkeye  Ins. 
Co.,  76  Iowa,  548,  41  N.  W.  309.  See,  also,  Hayes  v.  Milford  Mut. 
Fire  Ins.  Co.,  170  Mass.  492,  49  N.  E.  754. 

=«»  La  Plant  v.  Firemen's  Ins.  Co.,  68  Minn.  82,  70  N.  W.  856.  As 
to  bringing  suit  within  a  given  time  after  receipt  of  proofs,  see 
Provident  Fund  Soc.  v.  Howell,  110  Ala.  508,  18  So.  311;  after  claim 
has  been  allowed  by  directors,  Southern  Mut.  Ins.  Co.  v.  Turnley, 
100  Ga.  296,  27  S.  E.  975. 


^151  STIPULATIONS    OF    TOLICY.  42^ 

out  extending  the  period  of  tlie  statute  of  limitations,  affects 
the  remedy  merely,  and  does  not  impair  a  right,  or  existing 
contract  arising  out  of  the  issuance  of  the  policy  before  tho 
statute  was  changed.^^^ 

Testimony  of  Physician  —  Proof  of  Death. 

Stipulations  wai\ing  the  provisions  of  law  preventing  a 
physician  from  disclosing  information  acquired  Avhile  attend- 
ing the  insured  in  a  professional  capacity,^^^  or  providing  that 
no  time  of  absence  or  disappearance  on  the  part  of  the  in- 
sured, without  proof  of  actull  death,  will  entitle  him  to  re- 
cover,^^^  are  not  repugnant  to  law,  nor  against  public  policy. 

Efibct  of  Breach  of  Condition  on  Rights  of  Mortgagee. 

As  a  general  rule  the  breach  of  a  condition  of  an  insurance 
policy  affects  the  insured  only  when  the  breach  was  caused  by 
himself  or  his  agents.^^^  The  one  named  in  the  policy  as 
owTier,  and  not  the  mortgagee  to  whom  the  loss  is  payable,  is 
the  insured  within  the  purview  of  a  condition  of  forfeiture.^^* 

The  insertion  in  a  policy  of  a  provision  commonly  called 
the  "union  mortgage  clause"  to  the  effect  that  the  loss,  if  any, 
shall  be  payable  to  the  mortgagee  as  his  interest  may  appear, 
and  that  the  mortgagee's  interest  in  and  under  the  policy  shall 

^»«  McDonald  v.  Jackson,  55  Iowa,  38,  7  N.  W.  408;  Jones  v.  Ger- 
man Ins.  Co.,  110  Iowa,  75,  46  L.  R.  A.  860.  But  see  Kimball  v.  Ma- 
sons' Fraternal  Ace.  Ass'n,  90  Me.  183,  38  Atl.  102. 

»"  Foley  V.  Royal  Arcanum,  151  N.  Y.  196,  45  N.  E.  456. 

"=  Kelly  V.  Supreme  Council  of  Catholic  Mut.  Ben.  Ass'n,  61  N.  Y. 
Supp.  394. 

''"^  State  Ins.  Co.  v.  Taylor,  14  Colo.  499;  McKee  v.  Susquehanna 
Mut.  Fire  Ins.  Co.,  135  Pa.  St.  544;  Kircher  v.  Milwaukee  Mechanics' 
Mut.  Ins.  Co.,  74  Wis.  470. 

''^Holbrook  v.  Baloise  Fire  Ins.  Co.,  117  Cal.  561,  49  Pac.  555; 
Williamson  v.  Michigan  F.  &  M.  Ins.  Co.,  86  Wis.  395;  Moore  v.  Han- 
over Fire  Ins.  Co.,  141  N.  Y.  219.  See  American  Cent.  Ins.  Co.  v. 
Birds  Bldg.  &  Loan  Ass'n,  81  111.  App.  258. 


430 


THE   CONTRACT    AND    ITS    INCIDENTS. 


151 


not  be  invalidated  by  any  act  or  default  of  the  owner,  makes 
the  mortgagee  a  party  to  the  contract  and  gives  him  an  interest 
therein ;  and  the  insurer  cannot,  in  a  suit  brought  by  the  mort- 
gagee, take  advantage  of  any  act,  default,  or  neglect  of  the 
insured  whether  prior  or  subsequent  to  the  attaching  of  the 
mortgagee  indemnity  clause.^^® 

Terms  and  Conditions  of  the  Policy,  Generally. 

Contracts  of  insurance  are  contracts  of  indemnity  in  cases 
of  fire  insurance,  or  for  tlie  payment  of  specified  sums  in  case 
of  accident  or  life  insurance,  upon  the  terms  and  conditions 
specified  in  the  policy  or  policies  embodying  the  agreement  of 
the  parties.  The  insurer. undertakes  to  guaranty  the  insured 
against  loss  or  damage,  or  to  make  certain  payments  upon  the 
terms  and  conditions  agreed  upon  and  upon  no  other,  and 
when  called  upon  to  pay  in  case  of  loss  the  insurer  may  justly 
insist  upon  the  fulfilment  of  those  terms.  The  terms  of  the 
policy  constitute  the  measure  of  the  insurer's  liability,  and  if 
it  appears  that  the  contract  has  been  terminated  by  the  viola- 
tion, on  the  part  of  the  assured,  of  its  conditions,  there  can  be 
no  recovery.  The  parties  to  an  insurance  contract  have  the 
right  to  insert  therein  such  conditions  regulating  the  rights 
and  liabilities  and  duties  of  each  as  they  may  agree  upon,  or 
which  they  may  consider  necessary  and  proper  to  protect  their 
interests,  and  these  conditions,  when  made,  must  be  considered 
and  enforced  according  to  the  expressed  intent  of  the  parties. 
It  is  not  unlawful  or  against  public  policy  for  the  contract 
to  stipulate  that  upon  certain  conditions  or  contingencies,  or 
if  the  insured  shall  do  or  shall  not  do  certain  things,  or  if 

'*^Eddy  V.  London  Assur.  Corp.,  143  N.  Y.  311;  Humphry  v.  Hart- 
ford Fire  Ins.  Co.,  15  Blatclif.,504,  Fed.  Cas.  No.  6,875;  Syndicate 
Ins.  Co.  V.  Bolin  (C.  C.  A.),  65  Fed.  165,  27  L.  R.  A.  614;  National 
Bank  v.  Union  Ins.  Co.,  88  Cal.  497;  but  see  Whiting  v,  Burkhardt, 
60  N.  B.  1;  Chandos  v.  American  Fire  Ins.  Co.,  84  Wis.  184,  19  L.  R. 
A.  321. 


§  151  STIPULATIONS    OF    POLICY.  431 

certain  things  sliall  be  done  or  happen,  or  sliall  not  l)e  done  or 
shall  not  happen  in  regard  to  the  subject  matter  of  the  insur- 
ance, the  policy  shall  be  void. 

If  the  assured  has  violated  or  failed  to  perform  the  condi- 
tions of  the  contract,  and  such  violation  has  not  been  waived 
by  the  insurer,  then  the  assured  cannot  recover.  The  reason 
for  the  existence  of  certain  conditions  or  provisions  of  the 
contract  is  immaterial.  If  the  contract  is  so  drawn  as  to 
be  ambiguous,  or  to  be  fairly  susceptible  of  two  different 
constructions,  that  construction  will  bo  adopted  which  is 
most  favorable  to  the  insured.  But  the  rule  is  equally 
well  settled  that  contracts  of  insurance,  like  other  contracts, 
are  to  be  construed  according  to  the  meaning  of  the  terms 
which  the  parties  have  used,  and  if  they  are  clear  and  un- 
ambiguous these  teiTus  are  to  be  taken  and  understood  in 
their  plain,  ordinary  and  popular  sense.  The  courts  may 
not  make  a  contract  for  the  parties.  Their  function  and 
duty  simply  consist  in  enforcing  and  carrying  out  the 
one  actually  made.^''®  And  ajiy  condition  of  the  contract 
may  be  binding  upon  the  parties,  though  it  be  only  contained 
in  the  application,  when  that  is  made  a  part  of  the  policy.^'^"''^ 
The  insured  must  be  held  to  a  full  knowledge  of  all  the  terms 
and  conditions  of  his  policy,  and  the  fact  that  he  has  never 
signed  it  does  not  help  him  any  more  than  the  fact  that  he  has 
not  read  it.  His  assent  to  all  the  conditions  is  conclusively 
presumed  from  his  acceptance  of  the  policy,  and  he  cannot 
retain  its  benefits,  and  repudiate  its  burdens.^^^  An  act 
violative  of  the  terms  and  conditions  of  the  policy  affects  the 

»'* Thompson  v.  Phenix  Ins.  Co.,  136  U.  S.  287;  Dwight  v.  Ger- 
mania  Life  Ins.  Co.,  103  N.  Y.  341;  Hartford  Fire  Ins.  Co.  v.  Web- 
ster, 69  111.  392. 

""  Mandego  v.  Centennial  Mut.  Life  Ass'n,  64  Iowa,  134,  17  N.  W. 
656. 

^»*  Burlington  Ins.  Co.  v.  Gibbons,  43  Kan.  15;  Wilkins  v.  State 
Ins.  Co.,  43  Minn.  177;  Morrison  v.  Insurance  Co.  of  North  America. 


432  THE    CONTRACT    AMD    ITS    INCIDENTS.       §§  152,  153 

insured  only  when  done  l)y  liim,  or  bj  some  one  authorized  to 
bind  him  in  the  premises.^^*^ 

It  is  a  familiar  rule  that  forfeitures  are  not  favored;  that 
contracts  will  be  strictly  construed  to  avoid  forfeitures,  and 
that  the  burden  is  upon  him  who  claims  a  forfeiture  to  show 
that  he  is  clearly  entitled  to  it.'*'^*^  But  if  the  words  are  plain 
courts  must  give  effect  to  them  accordingly,  or  contractual 
obligations  will  be  subject  to  variations  and  violations  to  suit 
the  exigencies  of  particular  cases.^*^^ 

An  insurer  is  not  required  to  do  an  affirmative  act  declar- 
ing a  forfeiture  for  a  violation  of  the  policy  which  causes  the 
policy,  by  its  0"svn  terms,  to  become  void.^*^^  The  conditions 
of  voluntary  contracts  can  be  waived  by  the  parties  by  any 
course  of  conduct  inconsistent  with  an  intention  to  insist  upon 
the  strict  letter  of  the  contract.  The  conditions  of  standard 
policies  can  only  be  waived  in  the  manner  prescribed  by  the 
policies  themselves, ^^^ 

Liability  of  Insurer. 

^  152.  In  life  and  accident  policies  the  measure  of  recovery 
is  not  usually  open  to  question,  the  amount  being  fixed  by 
contract. 

§  153.  The  fundamental  purpose  of  contracts  of  fire  insur- 
ance is  to  furnish  indemnity  to  the  insured  against  pecuniary 
damage  or  loss  through  the  operation  of  fire  upon  the  property 
insured. 

69  Tex.  353;  Cleaver  v.  Traders'  Ins.  Co.,  71  Mich.  414;  Allen  v.  Ger- 
man American  Ins.  Co.,  123  N.  Y.  6. 

^''  Eliot  Five  Cents  Sav.  Bank  v.  Commercial  Union  Assur.  Co., 
142  Mass.  142;  Insurance  Co.  of  North  America  v.  McDowell,  50  111. 
120.     See  ante,  note  393. 

*«>  Aetna  Life  Ins.  Co.  v.  Vandecar.  30  C.  C.  A.  48,  86  Fed.  289; 
Travellers'  Ins.  Co.  v.  McConkey,  127  U.  S.  661;  Bailey  v.  Home- 
stead Fire  Ins.  Co.,  16  Hun  (N.  Y.),  503. 

*"^Kasten  v.  Interstate  Casualty  Co.,  99  Wis.  73,  74  N.  W.  534. 

*"=  Betcher  v.  Capital  Fire  Ins.  Co.,  78  Minn.  240,  80  N.  W.  971. 

*"0'Neil  V.  American  Fire  Ins.  Co.,  166  Pa.  St.  72. 


§§  152-157  LIABILITY    OF    IN'SUKEK.  433 

§154.  A  stipulation  that  the  insurer  may  rebuild  or  repair 
property  damaged  by  fire  gives  him  the  privilege,  at  his  option, 
either  to  pay  the  damages  or  to  rebuild  or  repair  within  the 
specified  time,  or,  if  no  time  be  fixed,  within  a  reasonable  time 
after  notice  of  the  fire. 

§  155.  An  insurer  is  liable  for  breach  of  its  agreement  to  in- 
sure or  to  continue  or  renew  existing  insurance.  The  measure 
is  the  damages  which  naturally  result  from  the  breach. 

g  156.  A  settlement  induced  by  fraud  or  misrepresentation 
may  be  set  aside. 

§  157.  A  building  is  not  a  "total  loss  "or  "wholly  destroyed" 
when  there  is  a  remnant  left  standing  which  is  fit  and  suitable 
for  use  in  rebuilding,  and  has  a  substantial  value  for  that  pur- 
pose. 

Policies  of  life  insurance  and  accident  insurance  usually 
fix  the  amount  of  liability  and  recovery  so  as  to  foreclose  all 
dispute  on  that  question.  Fire  insurance  contracts  are  es- 
sentially contracts  of  indemnity,  and  the  assured  is  entitled 
to  recover  from  the  underwriter  the  whole  amount  of  a  partial 
loss  if  it  did  not  exceed  the  amount  insured,  although  the 
amount  insured  be  less  than  the  value  of  the  property  at  risk. 
In  cases  of  personal  property  the  measure  of  damages  for  loss 
of  the  insured  property  is  its  market  value  at  the  time  and 
place  where  the  loss  occurred,  within  the  amount  named  in 
the  policy.  In  the  case  of  damage  to  an  insured  building,  tlie 
rule  is  indemnification  to  the  owner,  not  exceeding  the  sum 
insured.  The  question  is  not  what  some  one  would  have  paid 
for  the  building,  but  what  amount  would  indemnify  the  in- 
sured for  the  loss  sustained.  It  is  for  the  jury  to  determine 
in  the  one  case  the  amount  and  extent  of  the  loss,  and  in  the 
other  case  the  amount  or  extent  of  the  damage.'*''* 

♦"^  State  Ins.  Co.  v,  Taylor,  14  Colo.  499;  Steward  v.  Phoenix  Fire 
Ins.  Co.,  5  Hun  (N.  Y.),  261;  Brinley  v.  National  Ins.  Co.,  11  Mete. 
(Mass.)  195;  Com,  Ins.  Co.  v.  Sennett,  37  Pa.  St.  205,  78  Am.  Dec. 
418;  Mississippi  Mut.  Ins.  Co.  v.  Ingram,  34  Miss.  215. 

EERR,  INS.— 28 


43i 


THE   CONTKACT    AND    ITS    INCIDENTS.        §§  152-157 


Where  goods  insured  against  fire  are  destroyed,  tlie  insurer 
is  bound  to  pay  their  value  at  the  time  of  the  loss;  where 
damaged  only,  he  is  bound  to  pay  the  difference  between  the 
value  in  the  sound  and  damaged  condition.  Where  the  goods 
are  so  damaged  as  not  to  be  salable  by  the  ordinary  method, 
a  fire  sale  at  auction  may,  after  reasonable  notice  to  the  in- 
surers, be  considered  by  the  jury  in  estimating  the  damages, 
and  ascertaining  the  proper  amount  of  indemnity. ^^^  Market 
value,  and  not  local  or  peculiar  value,  must  control.^'^^  The 
right  to  recovery  must  always  be  founded  upon  an  insurable 
interest,  and  ordinarily  the  maximum  amount  which  one  can 
recover  on  a  policy  is  limited  to  the  amount  of  his  insurable 
interest  in  the  subject  matter  of  the  risk.'*^'^  The  amount  of 
the  policy  is  no  evidence  of  the  value  of  the  property  de-. 
stroyed,  except  when  the  policy  be  valued,  and  the  loss  total. 
The  jury  must  find  from  the  evidence  the  actual  amount  of 
the  damage,  and  the  extent  of  the  loss  of  the  insured.'*''^  In 
the  case  of  the  destruction  of  a  building,  where  the  policy  was 
not  valued,  the  damage  would  be  the  value  of  the  building  as  it 
stood  upon  the  ground  on  the  day  it  was  destroyed.  If  the 
building  was  old,  and  dilapidated  by  use  and  decay,  its  value 
in  that  condition  should  be  the  ground  of  recovery,  not  ex- 
ceeding the  liability  of  the  insurer  as  fixed  by  the  policy. '*°^ 
If  the  policy  stipulates  that  the  cash  value  of  the  property 

*>=  Hoffman  v.  "Western  M.  &  F.  Ins.  Co.,  1  La.  Ann.  216. 

■^  Fisher  v.  Crescent  Ins.  Co.,  33  Fed.  544. 

*"  See  ante,  c.  9,  "Insurable  Interest;"  post,  c.  16,  "Proceeds  of 
Policy." 

*"*  Waynesboro  Mut.  Fire  Ins.  Co.  v.  Creaton,  98  Pa.  St.  451; 
Standard  Fire  Ins.  Co.  v.  Wren,  11  111.  App.  242. 

*"' Underbill  v.  Agawam  Mut.  Fire  Ins.  Co.,  6  Cush.  (Mass.)  440; 
Washington  Mills  Emery  Mfg.  Co.  v.  Weymouth  &  B.  Mut.  Fire  Ins. 
Co.,  135  Mass.  503;  Aetna  Ins.  Co.  v.  Johnson,  11  Bush  (Ky.),  587; 
Hickerson  v.  German  American  Ins.  Co.,  96  Tenn.  193,  32  L.  R.  A. 
172. 


§§  152-157  LIABILITY    OF   INSURER.  435 

destroyed  or  damaged  sliall  not  exceed  the  cost  of  rebuilding  it, 
and  in  case  of  damage  from  use  or  otherwise  that  a  suitable 
deduction  shall  be  made  from  the  cost  of  repair,  the  measure  of 
damages  is  the  cost  of  repairs,  if  thereby  the  property  is  ren- 
dered as  valuable  as  before.  If  less  valuable  than  before,  then 
the  difference  must  be  added  to  the  cost.  If  more  valuable, 
it  must  be  deducted.^  ^^ 

Where  the  policy  pro^ddes  that  the  loss  should  be  ascer» 
tained  according  to  the  actual  cash  value  of  the  property  at 
the  time  the  loss  occurred,  not  to  exceed  what  it  would  then 
cost  the  insured  to  repair  or  replace  the  same  with  material  of 
like  kind  and  quantity,  and  the  insured  are  manufacturers 
of  the  property  covered  and  destroyed,  the  proi)er  measure  of 
damages  is  the  actual  cash  value  at  th^  time  the  loss  occurred, 
and  not  the  cost  to  them  of  manufacturing  the  same.^^^  Where 
the  property  insured  has  no  recognized  market  value,  its  fair 
value  should  be  the  measure  of  damages.^ ^^  If  the  policy 
separately  describes  different  articles  of  property,  insuring 
each  for  a  specified  sum,  the  recovery  for  damage  to  one  article 
cannot  exceed  the  sum  for  which  it  was  insured. ^^^  The  term 
"actual  cash  value"  means  the  sum  of  money  for  which  the 
insured  property  would  have  sold,  at  its  market  price,  at  the 
time  and  place  of  its  destruction.^^* 

""Commercial  Fire  Ins.  Co.  v.  Allen,  80  Ala.  571;  German  Ins.  Co. 
V.  Everett  (Tex.  Civ.  App.),  36  S.  W.  125. 

*"  Mitchell  V.  St.  Paul  German  Fire  Ins.  Co.,  92  Mich.  594,  52 
N.  W.  1017,  distinguishing  Chippewa  Lumber  Co.  v.  Phenix  Ins.  Co., 
80  Mich.  117,  44  N.  W.  1055.  Compare  Clover  v.  Greenwich  Ins.  Co., 
101  N.  Y.  277. 

'"^'Gere  v.  Council  Bluffs  Ins.  Co.,  67  Iowa,  272;  Brinley  v.  Na- 
tional Ins.  Co.,  11  Mete.  (Mass.)  195. 

"^Dacey  v.  Agricultural  Ins.  Co.,  21  Hun  (N.  Y.),  83;  Home  Ins. 
Co.  V.  Adler,  71  Ala.  516. 

"*Mack  V.  Lancashire  Ins,  Co.,  2  McCrary,  211,  4  Fed.  59;  Russell 
V.  Detroit  Mut.  Fire  Ins.  Co.,  80  Mich.  407.  For  definition  of  "work- 
ing interest,"  see  Imperial  Fire  Ins.  Co.  v,  Murray,  73  Pa,  St.  13. 


436 


THE   CONTRACT   AND    ITS    INCIDENTS. 


152-157 


If  tlie  owner  of  a  life  estate  only,  be  insnred  as  liaA^ng  an 
absolute  title  by  an  insurer  who  knows  tbe  true  condition  of 
the  title,  and  demands  and  receives  premium  for  insuring  the 
entire  ownership,  it  is  liable  to  the  same  extent  as  if  the  as- 
sured owned  the  fee.^^^ 

The  insurer  is  liable  for  all  damage  which  is  the  direct  and 
proximate  result  of  the  peril  or  event  insured  against,  but  no 
further.416 

Eecovery  for  a  building  shattered  by  lightning,  and  the 
destruction  of  which  is  completed  by  a  high  wind,  must  be 
limited  to  the  direct  loss  caused  by  lightning,  where  the  policy 
expressly  excludes  all  damage  done  by  wind.^^'^  A  policy  on 
a  building  does  not  cover  loss  of  profits  during  repair.^ ^^ 
Profits  ordinarily  cannot  be  recovered  unless  specially  in- 
sured ;^^^  but  they  may  be  insured  and  recovered.^^'^ 

The  insurer,  in  estimating  the  actual  cash  value  of  his  goods 
at  the  time  of  the  fire,  is  entitled  to  include  in  such  value  the 
profits,  which,  added  to  the  cost  of  production,  constitute 
the  value.^^^     Rent  constitutes  a  distinct  insurable  interest, 

*^' Western  Assur.  Co.  v.  Stoddard,  88  Ala.  606;  Green  v.  Green,  50' 
S.  C.  514,  46  L.  R.  A.  525;  Harrison  v.  Pepper,  166  Mass.  288;  Samp- 
son V.  Grogan,  21  R.  I.  174,  44  L.  R.  A.  711;  post,  c.  16. 

^'  See  ante,  "Proximate  Cause." 

"^  Beakes  v.  Phoenix  Ins.  Co.,  143  N.  Y.  402,  26  L.  R.  A.  267. 

*i»In  re  Wright,  1  Adol.  &  E.  621;  Niblo  v.  North  American  Fire 
Ins.  Co.,  1  Sandf.  (N.  Y.)  551. 

«» Niblo  V.  North  American  Fire  Ins.  Co.,  1  Sandf.  (N.  Y.)  551; 
Stock  V.  Inglis,  9  Q.  B.  Div.  708. 

""Carey  v.  London  Provincial  Fire  Ins.  Co.,  33  Hun  (N.  Y.),  315; 
Employers'  Liability  Assur.  Corp.  v.  Merrill,  155  Mass.  404,  21  N.  B. 
529;  National  Filtering  Oil  Co.  v.  Citizens'.  Ins.  Co.,  106  N.  Y.  535, 
13  N.  E.  337. 

"'■  Mitchell  V.  St.  Paul  German  Fire  Ins.  Co.,  92  Mich.  594,  52  N.  W. 
1017;  Parrish  v.  Virginia  F.  &  M.  Ins.  Co.  (N.  C),  20  Ins.  Law  J. 
95;  Canada  Sugar  Refining  Co.  v.  Insurance  Co.  of  North  America, 
175  U.  S.  609;  Hartford  Fire  Ins.  Co.  v.  Cannon,  19  Tex.  Civ.  App. 
305,  46  S.  W.  85L 


§§  152-157  LIABILITY   OF    IXSUEER.  437 

wliich  is  not  covered  by  a  policy  on  a  building/^^  The  in- 
sured -v^ill  be  entitled  to  interest  upon  the  amount  he  is  en- 
titled to  recover  from  the  time  fixed  for  payment,  and  not 
from  the  date  of  the  fire.^^^  Proofs  of  loss  are  not  conclusive 
upon  the  assured  as  to  the  extent  of  his  damage.^^*  An  in- 
surer may  be  entitled  to  a  deduction  from  the  amount  of  its 
liability  of  a  sum  equal  to  the  amount  of  its  unpaid  premium, 
although  the  statute  of  limitations  would  prevent  its  collec- 
tion. ^^^  The  holder  of  a  policy  indemnifying  him  against 
liability  from  accidents  occurring  in  connection  with  his  busi- 
ness, is  entitled  to  recover  the  expense  of  defending  a  suit  for 
injuries  covered'by  the  policy,  where  the  insurer  neglected  to 
defend  after  notice.^^®  The  insurer  is  entitled  to  the  benefit 
of  any  salvage. '^^'^ 

Rebuilding  or  Repairing. 

The  right  to  rebuild  cannot  be  exercised  by  an  insurer,  ex- 
cept it  be  given  him  by  the  contract.^^^  The  effect  of  a  pro- 
vision giving  the  insurer  the  right  to  rebuild,  is  to  give  him 
an  option  either  to  pay  the  money  damage  to  the  property 
destroyed,  or  replace  it,  or  restore  it  to  the  condition  in  which 
it  was  before  the  fire.  Giving  the  insurer  the  option  to  repair 
does  not  place  upon  him  the  obligation  to  repair,  or  to  pay 

^'Leonarda  v.  Phoenix  Assur.  Co.,  2  Rob.  (La.)  131;  Farmers' 
Mut.  Ins.  Co.  V.  New  Holland  Turnpike  Co.,  122  Pa.  St.  37,  15  Atl. 
563. 

*=' Peoria  M.  &  F.  Ins.  Co.  v.  Lewis,  18  111.  553;  Webb  v.  Protec- 
tion Ins.  Co.,  6  Ohio,  456;  Hastings  v.  Westchester  Fire  Ins.  Co.,  73 
N.  Y.  141. 

«^  Lebanon  Mut.  Ins.  Co.  v.  Kepler,  106  Pa.  St.  28;  Sibley  v.  Pres- 
cott  Ins.  Co.,  57  Mich.  14.     See  post,  c.  13,  "Proofs  of  Loss." 

"'Alexander  v.  Continental  Ins.  Co.,  67  Wis.  422;  Home  Ins.  Co. 
V.  Adler,  71  Ala.  516. 

*-o  Mandell  v.  Fidelity  &  Casualty  Co.,  170  Mass.  173,  49  N.  E.  112. 

*-'  Hough  V.  People's  Fire  Ins.  Co.,  36  Md.  398. 

*"-«  Wallace  v.  Insurance  Co.,  4  La.  289. 


438  THE    CONTRACT   AND    ITS    INXIDENTS.        §g  152-157 

the  expenses  of  repairs  made  by  tlie  insure].  He  may  refuse 
to  repair,  and  pay  only  the  damage.^^^  Where  parties  eon- 
tract  upon  a  subject  surrounded  by  statutory  limitations  or 
requirements,  or  municipal  ordinances  which  control  the 
subject  matter  of  the  risk,  they  are  presumed  to  have  entered 
into  their  engagements  with  reference  thereto,  and  these 
statutes  and  ordinances  enl^r  into  and  become  a  part  of  the 
contract,  and  the  right  to  repair  cannot  be  taken  advantage 
of  by  an  insurer,  if  the  statute  or  ordinances  governing  the 
subject  prevent  repairing  or  rebuilding. *^*^  The  right  to  re- 
pair or  rebuild  only  becomes  operative  if  taken  advantage  of 
by  the  insurer  within  the  time  stipulated  in  the  policy.  If 
no  time  is  fixed  by  the  policy  the  election  must  be  made  within 
a  reasonable  time.^'^^  When  a  policy  binds  the  company,  in 
case  of  loss,  to  either  repair  or  pay,  an  election  is  established 
by  any  act  manifesting  a  choice,  and  the  election  once  made  is 
irrevocable. ^^^  The  effect  of  electing  to  rebuild,  and  notifying 
the  insured  thereof,  is  to  convert  the  policy  into  a  building 
contract,  and  the  amount  named  in  the  policy  ceases  to  be  the 
rule  of  damages.  If,  after  the  insurer  has  undertaken  to  re- 
build, it  desists  from  completing  the  structure,  the  measure  of 
damages  is  the  amount  which  will  be  necessary  to  complete  the 
building,  and  restore  it  substantially  to  its  former  condi- 
tion.'*^^    The  contract  to  rebuild  is  satisfied  if  the  property 

*=°Brinley  v.  National  Ins.  Co.,  11  Mete.  (Mass.)  195. 

*2''Larldn  v.  Glens  Falls  Ins.  Co.,  80  Minn.  527,  83  N.  W.  409;  Fire 
Ass'n  of  Philadelphia  v.  Rosenthal,  108  Pa.  St.  474;  Brady  v.  North- 
western Ins.  Co.,  11  Mich.  425. 

"'Insurance  Co.  of  North  America  v.  Hope,  58  111.  75;  Kelly  v. 
Sun  Fire  Office,  141  Pa.  St.  10;  AVestchester  Fire  Ins.  Co.  v.  Dodge, 
44  Mich.  420;  Maryland  Home  Fire  Ins.  Co.  v.  Kimmell,  89  Md.  43Y, 
43  Atl.  764. 

*'"  Fire  Ass'n  of  Philadelphia  v.  Rosenthal,  108  Pa.  St.  474. 

«^  Reals  V.  Home  Ins.  Co.,  36  N.  Y.  522;  Zalesky  v.  Iowa  Stale  Ins. 


§§  152-157  LIABILITY  OF  INSUKEE.  4:39 

is  made  as  good  as  it  was  before  the  fire.^^^  If  tlie  insured 
prevents  the  insurer  from  exercising  his  option  to  rebuild,  he 
can  recover  nothing  on  his  policy. ^^^  After  an  election  to 
rebuild  is  made  the  insurer  must  proceed  with  the  work  with 
all  reasonable  despatch.^^*'  An  insurer  in  possession  for  the 
purpose  of  rebuilding,  is  under  no  obligation  to  pay  rent,  until 
after  the  lapse  of  a  reasonable  time  for  completion  of  re- 
pairs.^^^  An  election  to  rebuild  waives  all  known  defenses 
available  to  the  insurer  ;^^^  and  is  a  waiver  of  the  right  to 
arbitrate.^^^  The  converse  of  this  would  seem  to  be  true;^^^ 
unless  the  policy  or  stipulation  for  arbitration  otherwise  pro- 
vide.*^^  The  denial  of  all  liability  under  a  policy,  and  re- 
fusal to  pay  the  loss,  is  a  waiver  of  the  right  to  exercise  the 
option  to  rebuild.^^2  An  insurer  is  not  liable  for  the  falling 
of  an  uninsured  party  wall,  during  the  reconstruction  of  the 

Co.,  102  Iowa,  512,  70  N.  W.  187;  Morrell  v.  Irving  Fire  Ins.  Co.,  33 
N.  Y.  429,  88  Am.  Dec.  396. 

*■'■*  Franklin  Fire  Ins.  Co.  v.  Hamill,  5  Md.  170. 

«'  Beals  V.  Home  Ins.  Co.,  36  N.  Y.  522. 

"'Home  District  Mut.  Ins.  Co.  v.  Tliompson,  1  Up.  Can.  Err.  & 
App.  247;  American  Cent.  Ins.  Co.  v.  McLanathan,  11  Kan.  553; 
Haskins  v.  Hamilton  Mut.  Ins.  Co.,  5  Gray  (Mass.),  432. 

"'  St.  Paul  F.  &  M.  Ins.  Co.  v.  Johnson,  77  111.  598.  See  Parker  v. 
Eagle  Fire  Ins.  Co.,  9  Gray  (Mass.),  152.  Rebuilding;  several  insur- 
ers: Good  V.  Buckeye  Mut.  Fire  Ins.  Co.,  43  Ohio  St.  394;  Morrell 
V.  Irving  Fire  Ins.  Co.,  33  N,  Y.  429. 

"'American  Cent.  Ins.  Co.  v.  McLanathan,  11  Kan.  553;  Bersche 
V.  Globe  Mut.  Ins.  Co.,  31  Mo.  546;  Bersche  v.  St.  Louis  Mut.  F.  & 
M.  Ins.  Co.,  31  Mo.  555. 

«»Zalesky  v.  Iowa  State  Ins.  Co.,  102  Iowa,  512,  70  N.  W.  187; 
Wynkoop  v.  Niagara  Fire  Ins.  Co.,  91  N.  Y.  478. 

**»  Elliott  V.  Merchants'  &  Bankers'  Fire  Ins.  Co.,  109  Iowa,  39,  79 
N.  W.  452;  McAllaster  v.  Niagara  Fire  Ins.  Co.,  156  N.  Y.  80,  50 
N.  E.  502. 

*"  Piatt  V.  Aetna  Ins.  Co.,  153  111.  113,  26  L.  R.  A.  853;  Langan  v. 
Aetna  Ins.  Co.,  96  Fed.  705. 

♦*■  Western  Home  Ins.  Co.  v.  Richardson,  40  Neb.  1,  58  N.  W.  597. 


440  THE   CONTRACT   AND   ITS   INCIDENTS.        §§  152-157 

insured  premises.'*^"  A  clause  in  a  policy  giving  the  insurer 
the  right  to  rebuild  or  repair,  is  solely  for  the  benefit  of  the 
parties  to  the  policy,  and  no  one  else  can  interpose  to  prevent 
its  performance,  or  take  advantage  of  the  failure  to  give  the 
notice  within  the  prescribed  time.^^^ 

Contribution  and  Pro-rating. 

A  provision  limiting  the  liability  of  the  insurer  to  such  pro- 
portion of  the  loss  as  the  sum  insured  bears  to  the  whole 
amount  of  the  insurance,  refers  to  such  amount  at  the  time  of 
the  loss,  and  does  not  make  it  obligatory  upon  the  assured  to 
continue  insurance  in  force  when  the  policy  is^written.^*^  A 
pro\dsion  that  the  loss  shall  be  apportioned  among  all  in- 
surers, applies  only  where  there  is  other  valid  insurance. 
There  is  no  theory  of  apportionment  of  contribution,  which 
will  relieve  an  insurer  from  its  liability  to  the  full  amount, 
until  the  insured  has  received  the  indemnity  stipulated  for.^^^ 
The  contribution  only  refers  to  policies  insuring  the  same 
interest.^^'^  There  can  be  no  apportionment  where  the  loss 
exceeds  the  total  amount  of  insurance.  ^^^ 

<«  Alter  V.  Home  Ins.  Co.,  50  La.  Ann.  1316,  24  So.  180. 

***  Stamps  V.  Commercial  Fire  Ins.  Co.,  77  N.  C.  209,  24  Am.  Rep. 
443. 

"'Lattan  v.  Royal  Ins.  Co.,  45  N.  J.  Law,  453;  Quarrier  v.  Pea- 
body  Ins.  Co.,  10  W.  Va.  507.  See,  also,  on  pro-rating.  Sun  Ins. 
Office  V.  Varble  (Ky.),  46  S.  W.  486,  27  Ins.  Law  J.  798;  Breed  v. 
Providence  Wash.  Ins.  Co.,  17  Blatchf.  287,  Fed.  Cas.  No.  1,826; 
Sherman  y.  Madison  Mut.  Ins.  Co.,  39  Wis.  104. 

""Jersey  City  Ins.  Co.  v.  Nichol,  35  N.  J.  Eq.  291;  Niagara  Fire 
Ins.  Co.  V.  Heenan  &  Co.,  81  111.  App.  678;  Niagara  Fire  Ins.  Co.  v. 
Scammon,  144  111.  490. 

"'Traders'  Ins.  Co.  v.  Pacaud,  150  111.  245.  'For  effect  of  Union 
Mortgage  Clause,  see  Eddy  v.  London  Assur,  Corp.,  143  N.  Y.  311, 
25  L.  R.  A.  686;  Hartford  Fire  Ins.  Co.  v.  Williams  (C.  C.  A.),  63 
Fed.  925;  Page  v.  Sun  Ins.  Office,  64  Fed.  194. 

""Ogden  V.  East  River  Ins.  Co.,  50  N.  Y.  ,388;  Pencil  v.  Home  Ins. 


§§  152-157  LIABILITY    OF    INSCRER.  441 

Successive  Fires. 

The  insurer  is  bound  to  indemnify  the  insured  during  the 
period  covered  by  the  policy  against  one  and  all  of  the  perils 
insured  against,  not  however  to  an  amount  in  excess  of  the 
face  of  the  policy.  Thus,  the  insurers  will  be  obliged  to  pay 
upon  the  second  loss  the  difference  between  the  amount  in- 
sured, and  what  they  had  already  paid  on  a  previous  loss.^^'' 
If,  under  a  valued  policy,  the  property  is  totally  destroyed 
as  the  result  of  two  or  more  fires,  the  measure  of  recovery  for 
the  final  loss  is  the  total  amount  of  insurance  written,  less 
the  amount  paid  in  settlement  of  previous  losses. '*^*^ 

Breach  of  Contract. 

The  liability  of  an  insurer  for  failure  to  issue  a  policy  of 
insurance,  or  to  insure  property  according  to  his  agreement, 
has  been  dealt  with  elsewhere.''^ ^  An  insurer  must  always 
respond  in  damages  for  its  failure  to  carry  out  the  contract 
made  by  it.  The  damages  recoverable  in  any  case  for  a  breach 
of  contract,  are  such  as  naturally  result  from  the  act  com- 
plained of.  It  has  been  held  that  purely  fraternal  benefit  as- 
sociations are  not  liable  in  damages  for  an  unlawful  cancella- 
tion of  a  membership,  because  such  a  corporation  acts  purely 
as  a  trustee  to  collect  and  distribute  a  sick  or  death  fund,  and 

Co.,  3  Wash.  485;  Pelzer  Mfg.  Co.  v.  Sun  Fire  Office,  36  S.  C.  213, 
See,  also,  on  contribution  and  pro-rating,  Teague  v.  Germania  Fire 
Ins.  Co.,  71  Ala.  473;  Peoria  M.  &  F.  Ins.  Co.  v.  Wilson,  5  Minn.  53 
(Gil.  37);  Gandy  v.  Orient  Ins.  Co.,  52  S.  C.  224,  29  S.  E.  655,  27 
Ins.  Law  J.  575;  Chandler  v.  Insurance  Co.  of  North  America,  70 
Vt.  562,  41  Atl.  502;  Lesure  Lumber  Co.  v.  Mutual  Fire  Ins.  Co.,  101 
Iowa,  514,  70  N.  W.  761;  Page  v.  Sun  Ins.  Office  (C.  C.  A.),  74  Fed. 
203;  Erb  v.  Fidelity  Ins.  Co.,  99  Iowa,  727,  69  N.  W.  261. 

""Curry  v.  Com.  Ins.  Co.,  10  Pick.   (Mass.)   535,  20  Am.  Dec.  547. 

^^^  Lancashire  Ins.  Co.  v.  Bush,  60  Neb.  116,  82  N.  W.  313.  See, 
also,  Hamburg-Bremen  Fire  Ins.  Co.  v.  Garlington,  66  Tex.  103; 
Trull  V.  Roxbury  Mut.  Fire  Ins.  Co.,  3  Cush.  (Mass.)  263;  Batchelder 
V.  Insurance  Co.  of  North  America,  30  Fed.  459. 

*"  Ante,  c.  3. 


•i-12  THE   CONTRACT   AKD    ITS    INX^IDEXTS.        §§  152-157 

has  no  power  to  collect  money  except  for  tliat  purpose. ^^^  But 
damages  are  recoverable  against  other  insurance  corporations, 
for  an  unlawful  forfeiture  of  a  contract  of  insurance,  or  for 
failure  to  receive  premiums,  or  refusal  to  deliver  any  contract 
agTeed  to  be  delivered.  There  are  decisions  to  the  effect  that 
the  measure  of  damages  for  a  breach  of  a  life  insurance  con- 
tract is  the  amount  of  premiums  paid,  with  interest.  But  the 
sounder  rule  is  that  the  damages  are  to  be  measured  by  the 
position  occupied  by  the  parties  at  the  time  the  breach  occurs. 
If  at  that  time  the  health  of  the  insured  has  become  impaired 
to  such  an  extent  as  to  make  it  impossible  for  him  to  secure 
other  insurance,  the  extent  of  his  damages  would  be  different 
than  if  new  insurance  could  be  had.  If  he  could  at  that  time 
take  similar  insurance  in  a  responsible  company,  the  measure 
of  damages  would  be  the  difference  between  the  cost  of  such 
new  insurance  for  the  temi  of  his  natural  life,  according  to 
the  mortuary  tables,  and  the  cost  of  caiTving  the  canceled 
policy  for  the  same  period  upon  the  terms  previously  made. 
But  if  his  health  had  become  impaired,  so  that  new  insurance 
could  not  be  procured,  the  measure  of  damages  would  seem 
to  be  the  present  value  of  the  policy,  as  of  the  date  of  death, 
less  the  estimated  cost  of  carrying  the  same,  from  the  date  of 
cancellation.^^^ 

A  re-classing  of  members  in  a  mutual  company,  is  not  a 
repudiation  of  a  policy  or  certificate. ^^^  The  measure  of  re- 
covery in  an  action  for  rescission  of  a  contract  induced  by 

«=  Lavalle  v.  Societe  St.  Jean  Baptiste,  17  R.  I.  680,  24  All.  467. 

*'''  Ebert  v.  Mutual  Reserve  Fund  Life  Ass'n,  81  Minn.  116,  83 
N.  W.  506;  Speer  v.  Phcenix  Mut.  Life  Ins.  Co.,  36  Hun  (N.  Y.),  322. 
See,  also,  Brooklyn  Life  Ins.  Co.  v.  Week,  9  111.  App.  358;  Alabama 
Gold  Life  Ins.  Co.  v.  Garmany,  74  Ga.  51;  Clemmitt  v.  New  York 
Life  Ins.  Co.,  76  Va.  355;  New  York  Life  Ins.  Co.  v.  Clemmitt,  77 
Va.  366. 

*"■'  Lee  V.  Mutual  Reserve  Fund  Life  Ass'n,  97  Va.  160,  33  S.  E.  556. 


§§  152-157  LIABILITY    OF    LNSUEER.  443 

false  representations,  is  tlie  amount  of  premiums  paid,  Tvith 
interest. ^°^  The  measure  of  damages  for  breach  of  an  agree- 
ment to  assign  a  policy  of  insurance,  is  the  cost  of  the  insur- 
ance for  the  unexpired  term  of  the  policy,  not  the  damage 
caused  by  the  subsequent  destruction  of  the  insured  prop- 
erty.^^^  The  measure  of  damages  for  the  breach  of  a  contract 
to  deliver  a  paid-up  policy,  where  there  is  an  existing 
risk,  is  the  value  of  such  policy  at  the  time  of  demand,  with 
interest  thereon.'*^^  Where  one  party  to  an  executory  con- 
tract prevents  the  performance  of  it,  or  puts  it  out  of  his 
o^^•n  power  to  perform — as,  in  case  of  a  re-insurance,  a  trans- 
fer of  assets,  or  insolvency  of  an  insurer — the  other  may 
regard  the  contract  as  terminated,  and  recover  whatever  dam- 
age he  has  sustained  thereby. '^^^ 

Distribution  of  Surplus  —  Mutual  Company. 

The  equitable  share  of  the  surplus  of  a  mutual  insurance 
company,  which  a  policy  holder  should  be  credited  with,  is 
such  share  as  may,  with  due  regard  to  the  safety  of  all  policy 
holders,  and  the  security  of  the  business  of  the  company,  in 
the  exercise  of  a  proper  discretion,  be  thus  credited.  No  title 
to  any  part  of  such  surplus,  which  will  enable  a  policy  holder 
to  maintain  an  action  at  law  for  its  recovei-y  until  the  dis- 

*"  Rohrschneider  v.  Knickerbocker  Life  Ins.  Co.,  76  N.  Y.  216. 

«'  Dodd  V.  Jones,  137  Mass.  322. 

«' Phoenix  Mut.  Life  Ins.  Co.  v.  Baker,  85  IlL  410;  Rumbold  v. 
Penn  Mut.  Life  Ins.  Co.,  7  Mo.  App.  71.  See,  also,  American  Life 
Ins.  &  Trust  Co.  v.  Shultz,  82  Pa.  St.  46;  Watts  v.  Pha?nix  Mut.  Life 
Ins.  Co.,  16  Blatchf.  228,  Fed.  Cas.  No.  17,294. 

^'Lovell  V.  St.  Louis  Mut.  Life  Ins.  Co.,  Ill  U.  S.  264;  People  v. 
Empire  Mut.  Life  Ins.  Co.,  92  N.  Y.  106;  Mason  v.  Cronk,  125  N.  Y. 
503;  Insurance  Com'r  v.  Provident  Aid  Soc,  89  Me.  413,  36  Atl.  627; 
Davenport  Fire  Ins.  Co.  v.  Moore,  50  Iowa,  626;  People  v.  Security 
Life  Insurance  &  Annuity  Co.,  78  N.  Y.  114;  Universal  Life  Ins.  Co. 
V.  Binford.  76  Va.  103. 


4ii  THE   CONTRACT    AND   ITS   INCIDENTS.       §§  152-157 

tribution  is  made  by  tbe  officers  of  tbe  company,  is  given  by 
a  policy  providing  that  tlie  members  sliall  be  entitled  to  partici- 
pate in  the  distribution  of  the  surplus  according  to  such 
principles  and  methods  as  may  from  time  to  time  be  adopted, 
•which  are  expressly  ratified  and  accepted  by  him.^^^  A  court 
^\ill  not  interfere  in  the  apportionment  or  distribution,  unless 
fraud  or  irregularity  be  shown 


400 


Avoidance  of  Settlement. 

An  adjustment  or  a  settlement  of  a  loss  cannot  be  opened 
or  set  aside  except  upon  the  ground  either  of  fraud  or  mistake 
of  facts  not  known.  If  there  was  fraud  in  the  original  con- 
tract, or  any  ground  for  its  avoidance,  not  known  when  the 
loss  was  paid,  or  if  the  loss  was  paid  in  ignorance  of  some 
■circumstances  attending  it  wdiich  if  known  would  have  enabled 
the  insurers  to  resist  the  claim,  the  money  may  be  recovered 
back.  But  if  they  knew  when  they  paid  the  loss,  or  upon  in- 
quiry might  have  informed  themselves,  of  the  grounds  upon 
which  they  might  have  resisted  the  claim,  they  cannot  after- 
wards recover  it  back,  for  this  would  open  the  door  for  infinite 
litigation.^*'^ 

^^"Greeff  v.  Equitable  Life  Assur.  Soc,  160  N.  Y.  19,  46  L.  R.  A. 
288. 

*">Gadd  V.  Equitable  Life  Assur.  Soc,  97  Fed.  834.  See,  also, 
Hines  v.  Mutual  Life  Ins.  Co.  (Ky.),  33  S.  W.  202,  25  Ins.  Law  J. 
555;  Greeff  v.  Equitable  Life  Assur.  Soc,  160  N.  Y.  19,  46  L.  R.  A. 
288. 

*«'Dow  v.  Smith,  1  Caines  (N.  Y.),  32;  Farmers'  &  Merchants'  Ins. 
Co.  V.  Chesnut,  50  111.  Ill;  Mutual  Life  Ins.  Co.  v.  Wager,  27  Barb. 
(N.  Y.)  367;  "Whipple  v.  North  British  &  M.  Fire  Ins.  Co.,  11  R.  I. 
139;  Milne  v.  Northwestern  Life  Assur.  Co.,  23  Misc.  Rep.  553,  52 
N.  Y.  Supp.  766;  Belt  v.  American  Cent.  Ins.  Co.,  29  App.  Div.  546, 
53  N.  Y.  Supp.  316;  Wood  v.  Massachusetts  Mut.  Ace  Ass'n,  174 
Mass.  217,  54  N.  E.  541;  Stache  v.  St.  Paul  F.  &  M.  Ins.  Co.,  49  Wis. 
*9,  35  Am.  Rep.  773;  Nebraska  &  1.  Ins.  Co.  v.  Segard,  29  Neb. 
354,  45  N.  W.  681;  Northwestern  Mut.  Life  Ins.  Co.  v.  Elliott,  5  Fed. 
225.     See  ante,  c.  3. 


§§  152-157  LIABILITY    OF    IN'SUKEB.  445 

Total  Loss. 

The  term  "total  loss,"  or  "wholly  destroyed,"  as  iised  in 
a  valued  policy,  does  not  imply  an  absolute  extinction  of  the 
component  parts  of  a  building  insured.  It  refers  to  a  condi- 
tion of  the  building,  after  it  has  been  damaged  to  such  an 
extent  that  the  remnant  left  standing  is  either  unfit  for  use  in 
rebuilding,  or  is  so  damaged  that  a  prudent  owner,  uninsured, 
desiring  just  such  a  building  as  was  damaged  by  fire,  would 
not  deem  it  practicable,  or  economical,  to  use  the  remnant  in 
rebuilding.  There  can  be  no  total  loss  of  a  building,  so  long 
as  the  remnant  of  the  structure  standing  is  reasonably  adapted 
for  and  has  a  substantial  value  for  use  as  a  basis  on  which  to 
restore  the  building  to  the  condition  in  which  it  was  before 
the  injury.  And  Avhether  it  is  so  adapted  depends  upon  the 
question  whether  a  reasonably  prudent  owner,  uninsured, 
desiring  such  a  structure  as  the  one  in  question  was  before 
the  injury,  would,  in  proceeding  to  replace  the  damaged 
building,  utilize  such  remnant  in  so  doing.  Upon  this  issue 
evidence  as  to  the  cost  of  repairing  and  restoring  the  building 
is  admissible. ^^^  The  words  "total  loss"  or  "wholly  de- 
stroyed," when  applied  to  a  building,  mean  totally  destroyed 
as  a  building;  that  is,  that  the  walls,  although  standing,  are 
unsafe  to  use  for  the  purpose  of  rebuilding,  and  must  be  torn 
down,  and  a  new  building  erected  throughout. '^^^ 

Keeping  in  view  the  fact  that  the  contract  of  insurance  is 
essentially  a  contract  of  indemnity,  it  is  difficult  to  understand 
how  a  building  can  be  said  to  be  totally  destroyed  so  long  as 
any  parts  of  it  which  are  subject  to  the  action  of  fire  re- 

*«'  Providence  Wash.  Ins.  Co.  v.  Board  of  Education  of  Morgans- 
town  School  Dist.  (W.  Va.),  30  Ins.  Law  J.  601.  38  So.  679;  Corbett  v. 
Spring  Garden  Ins.  Co..  155  N.  Y.  389;  Ampleman  v.  Citizens'  Ins. 
Co..  35  Mo.  App.  308,  320,  18  Ins.  Law  J.  393;  Northwestern  Mut.  Life 
Ins.  Co.  V.  Rochester  German  Ins.  Co.,  88  N.  W.  265. 

«' German  Ins.  Co.  v.  Eddy,  36  Neb.  461,  19  L.  R.  A.  707. 


446  THE   CONTRACT   AND   ITS   INCIDENTS.       §§  152-157 

main  standing,  and  can,  without  removal,  be  effectively,  and 
with  a  substantial  saving  in  cost,  utilized  in  its  reconstruction, 
so  that  the  building,  when  rebuilt,  shall  be  in  as  good  condi- 
tion as  it  was  before  the  fire.^^^  But  there  is  a  line  of  author- 
ities sustaining  an  opposite  view,  and  holding  that  the  test  is 
whether  the  building  has  lost  its  identity  and  specific  character 
as  a  building,  and  become  so  far  disintegrated  that  it  cannot 
be  properly  designated  as  a  building.  *^^ 

It  would  seem  that  the  practical  difficulties  in  the  applica- 
tion of  the  rule  last  mentioned  are  almost  insuperable.  Tew 
of  the  cases  following  it  have  presented  any  question  as  to 
the  substantial  value  of  the  remnant  and  its  practical  use  for 
purposes  of  rebuilding  such  a  structure  as  was  damaged.  Of 
this  the  supreme  court  of  Texas  has  well  said :  "To  push  the 
idea  of  'destruction  in  specie'  to  the  extent  of  excluding  all 
consideration  of  the  adaptability  of  the  remainder  of  the 
structure  for  use  in  restoring  the  building  to  its  original  con- 
dition, *  *  *  would  leave  us  with  practically  no  guide, 
as  it  would  be  more  difficult  to  determine  the  meaning  of 
'destruction  in  specie'  as  thus  limited,  than  of  'total  loss.' 
It  would  logically  result  in  denying  recovery  for  a  total  loss 

*"  Ampleman  v.  Citizens'.  Ins.  Co.,  35  Mo.  App.  308,  320,  18  Ins. 
Law  J.  393.  See,  also,  Insurance  Co.  of  North  America  v.  Bachler, 
44  Neb.  549,  62  N.  W.  911;  Ohage  v.  Union  &  Miner  Ins.  Co.,  85 
N.  W.  212;  Murphy  v.  American  Cent.  Ins.  Co.  (Tex.  Civ.  App.),  54 
S.  W.  407;  Hamburg-Bremen  Fire  Ins.  Co.  v.  Garlington,  66  Tex.  103. 
33  Cent.  Law  J.  319;  Larkin  v.  Glens  Falls  Ins.  Co.,  80  Minn.  527,  83 
N.  W.  409;  Manchester  Fire  Assur.  Co.  v.  Feibelman,  118  Ala.  308, 
23  So.  759. 

«' Williams  v.  Hartford  Ins.  Co.,  54  Cal.  442;  O'Keefe  v.  Liver- 
pool, L.  &  G.  Ins.  Co.,  140  Mo.  564,  41  S.  W.  922;  Oshkosh  Packing 
&  Provision  Co.  v.  Mercantile  Ins.  Co.,  31  Fed.  200.  See,  also,  Seyk 
V.  Millers'  Nat.  Ins.  Co.,  74  Wis.  67;  Lindner  v.  St.  Paul  F.  &  M.  Ins. 
Co.,  93  Wis.  526,  67  N.  W.  1125;  Palatine  Ins.  Co.  v.  Weiss  (Ky.),  59 
S.  W.  509. 


§§  152-157  LIABILITY    OF    INSURER.  447 

in  a  case  where  the  exterior  form  of  the  building  remains, 
though  the  interior  be  so  damaged  that  the  entire  remnant  of , 
the  structure  is  valueless  as  a  basis  upon  which  to  restore  the 
building  to  its  original  condition,  and  would  permit  a  recov- 
ery for  a  total  loss  in  a  case  where  an  inexpensive  portion  of 
the  building  has  been  destroyed,  though  the  most  valuable  and 
substantial  portion  remains  uninjured,  and  capable  of  being 
utilized  with  great  advantage  in  such  restoration.  To  so 
hold  would  virtually  be  to  abandon  the  principle -of  indem- 
nity lying  at  the  basis  of  all  legitimate  insurance,  and  to  hold 
out  to  the  owner,  instead  thereof,  a  fair  chance,  if  not  an 
inducement,  to  profit  by  the  partial  destmction  of  his  prop- 
erty."^^^ 

Machinery  placed  in  a  mill  building,  and  firmly  attached 
to  it,  is  real  property  subject  to  the  provisions  of  a  valued- 
policy  law.^^'^ 

Total  Disability. 

"Wholly  disabled,"  "permanently  disabled,"  and  "total 
disability,"  as  used  in  policies  of  accident  and  benefit  insur- 
ance, are  relative  terms,  and  apply  to  the  physical  condition 
of  the  insured,  in  connection  with  the  business  in  which  he 
is  engaged.  They  refer  to  incapacity  of  the  insured  to 
prosecute  his  business,  and  to  his  inability  to  perfomi  sub- 
stantially the  duties  necessarily  incident  to  his  occupation.'*''^ 

'""Royal  Ins.  Co.  v.  Mclntyre,  90  Tex.  170,  35  L.  R.  A.  672. 

*"  British  American  Assur.  Co.  v.  Bradford,  60  Kan.  82,  55  Pac.  335, 
28  Ins.  Law  J.  262.  See  Havens  v.  Germania  Fire  Ins.  Co.,  123  Mo. 
403,  24  Ins.  Law  J.  321;  Aetna  Ins.  Co.  v.  Glasgow  Electric  Light  & 
Power  Co.  (Ky.),  28  Ins.  Law  J.  992. 

«»See  ante,  "Total  Disability,"  notes  163,  165,  125,  126; 
Lobdill  V.  Laboring  Men's  Mut.  Aid  Ass'n,  69  Minn.  14;  Turner  v. 
Fidelity  &  Casualty  Co.,  112  Mich.  425,  38  L.  R.  A,  529,  and  notes 
thereto. 


4-48  THE   CONTRACT    AND    ITS    INCIDENTS.       §§   152-157 

Recovery  by  Insured  from  One  Causing  Fire. 

The  rule  is  well  settled  tliat  where,  by  the  actionable  negli- 
gence of  any  person,  insured  property  is  damaged  or  destroyed, 
the  0"^vner  of  the  property  can  recover  his  entire  loss  from  the 
tort-feasor,  without  regard  to  the  amount  of  insurance  there 
may  be  on  the  property.  ^^^  The  assured  may  have  two  rights 
of  action,  but  he  has  only  one  damage.  If  he  recovers  against 
the  tort-feasor,  he  thereby  diminishes  his  claim  against  the 
insurer  to  the  extent  of  the  amount  recovered. ^''^^ 

^»  Cunningham  v.  Evansville  &  T.  H.  R.  Co.,  102  Ind.  478,  1  N.  E. 
800;  Lake  Erie  &  W.  R.  Co.  v.  Griffin,  8  Ind.  App.  47,  35  N.  E.  396. 

^™Hart  V.  Western  R.  Corp.,  13  Mete.  (Mass.)  99;  Chickasaw 
County  Farmers'  Mut.  Fire  Ins.  Co.  v.  Weller,  98  Iowa,  731,  68  N.  W. 
443;  Anderson  v.  Miller,  96  Tenn.  35,  31  L.  R.  A.  604.  See  port, 
c.  17,  "Subrogation." 


CHAPTER  XIII. 

NOTICE  AND  PROOFS  OF  LOSS. 

§  158.  Stipulations  of  Policy. 

159.  Construction. 

160.  Mutual   Insurance  Companies. 

161.  Statutory  Regulation. 

162.  Distinction  between  Notice  and  Proofs. 

163.  Several  Policies  of  Same  Insurer. 

164.  No  Policy  Issued. 

165.  Total  Loss  under  Valued  Policy. 

166.  Computation  of  Time. 

167.  Conditions  Requiring  Strict  Performance. 

168.  Liberal  Construction  of  Conditions. 

169.  Excuses  for  Noncompliance. 

170.  Conditions  Not  Requiring  Strict  Compliance. 

171.  Time  to  Furnish  Not  Definite. 

172.  Form  and  Contents. 

173.  Certificate  of  Magistrate,  Notary  Public,  etc. 

174.  Who  Must  Furnish. 

175.  Mortgagee. 

176.  Partnership. 

177.  Assignee. 

178.  Creditor. 

179.  To  Whom  Given. 

180.  Manner  of  Service. 

181.  Proofs,  as  Evidence. 

182.  Fraud,  Misrepresentation  and  False  Swearing. 

183.  Examination  of  Insured  under  Oath. 

184.  Books  of  Account,  Invoices,  etc. 

Stipulations  of  Policy. 

§  158.  Conditions  in  insurance  policies  requiring  the  insurer 
to  furnish  notice  and  proofs  of  loss  are  valid,  and  must  be 
complied  with,  unless  waived  by  the  insurer. 

Insurance  policies  usually  contain  some  provisions  requir- 
ing the  insured  to  furnish  to  the  insurer  either  within  a 
KERR,  INS.— 39 


450  NOTICE   AND    TEOOFS    OF    LOSS.  §  158 

stated  or  a  reasonable  time  after  accident,  loss  or  damage,  for 
Avliicli  claim  under  tlie  policy  is  to  be  made,  notice  of  loss, 
or  proofs  of  loss,  or  both.  The  consequences  attendant  upon 
a  failure  to  comj^lj  with  these  conditions  depend  upon  the 
Avording  of  the  policy.  All  the  rights  of  the  insured  will,  in 
some  cases,  be  forfeited;  in  others,  his  right  to  sue  on  the 
policy  will  only  be  postponed  and  delayed  until  full  com- 
pliance. The  provisions  concerning  notice  of  loss  and  proofs 
of  loss  are  severable  and  distinct.  The  giving  of  proofs  may 
be  notice,  but  the  giving  of  notice  does  not  dispense  with 
proofs,  if  the  policy  requires  the  giving  of  the  latter.  These 
provisions  are  inserted  for  the  benefit  of  the  insurer.  The 
object  is  to  give  it  information  which  it  might  otherwise  be 
able  to  obtain  only  with  great  difficulty,  if  at  all,  and  upon 
which  its  rights  might  depend.  The  conditions  may  be  waived 
by  the  insurer,  either  expressly,  or  by  acts  or  conduct  from 
which  an  intent  to  waive  is  clearly  inferable.  If  the  policy 
is  silent  as  to  the  kind  of  notice  required,  either  verbal  or  wi'it- 
ten  notice  is  sufficient ;  but  if  written  notice  be  stipulated  for, 
it  must  be  furnished.  Such  provisions  are  valid ;  but  as  they 
savor  of  the  nature  of  forfeitures,  they  are  liberally  construed 
in  favor  of  the  insured.-^ 

^  McLaughlin  v.  Washington  County  Mut.  Ins.  Co.,  23  Wend. 
(N.  Y.)  525,  2  Bennett,  Fire  Ins.  Cas.  17;  Prendergast  v.  Dwelling 
House  Ins.  Co.,  67  Mo.  App.  426;  Bartlett  v.  Union  Mut.  Fire  Ins.  Co., 
46  Me.  500;  American  Cent.  Ins.  Co.  v.  Hathaway,  43  Kan.  399; 
Eiseman  v.  Hawkeye  Ins.  Co.,  74  Iowa,  11,  36  N.  W.  780;  Niagara 
Fire  Ins.  Co.  v.  Scammon,  100  111.  644;  Scammon  v.  Germania  Ins. 
Co.,  101  111.  621;  Lane  v.  St.  Paul  F.  &  M.  Ins.  Co.,  50  Minn.  227; 
Tripp  V.  Provident  Fund  Soc,  140  N.  Y.  23,  22  L.  R.  A.  432;  Peele 
V.  Provident  Fund  Soc,  147  Ind.  543;  Matthews  v.  American  Cent. 
Ins.  Co.,  154  N.  Y.  449,  3^  L.  R.  A.  433;  Paltrovich  v.  Phoenix  Ins. 
Co.,  143  N.  Y.  73,  25  L.  R.  A.  198;  Riddlesbarger  v.  Hartford  In?. 
Co.,  7  Wall.  (U.  S.)  390;  German  Ins.  Co.  v.  Davis,  40  Neb.  700.  59 
N.  W.  698;  Weidert  v.  State  Ins.  Co.,  19  Or.  261,  24  Pac.  242;  Gamble 


§  159  construction  of  conditions  of  policy.  451 

Same  —  Constructio^st. 

§  159.  The  stipulations  of  a  policy  which  relate  to  the  pro- 
cedure merely,  after  the  occurrence  of  a  loss,  are  to  be  reason- 
ably and  not  rigidly  construed,  when  this  can  be  done  without 
violating  the  express  terms  of  the  contract. 

The  contract  of  insurance  being  a  voluntary  one,  the  in- 
surers have  a  right  to  designate  the  terms  upon  which  they  will 
become  liable  for  a  loss.  The  insurer  and  insured  can,  in  the 
absence  of  legislative  interference,  make  a  contract  to  their 
mutual  liking,  and  can  insert  in  it  such  conditions  and 
agreements  as  they  choose,  regulating  the  rights,  duties  and 
obligations  of  each,  both  before  and  after  loss ;  providing  al- 
ways they  are  not  unreasonable  or  contrary  to  public  policy 
or  the  law  of  the  land.  And  when  the  parties  have  made 
their  own  contract,  have  agreed  upon  their  own  terms  and 
assented  to  certain  conditions,  the  courts  cannot  change  them 
and  must  not  permit  them  to  be  violated  or  disregarded.  The 
conditions  may  seem,  harsh  and  useless,  but  they  are  the  re- 
sult of  the  meeting  of  the  minds  of  parties  capable  in  law  of 
contracting,  and  if  they  have  not  been  waived,  or  if  one  party 
has  not  been  prevented  from  complying  by  the  act  of  the  other, 
all  conditions  must  be  respected  and  enforced.  The  province 
of  a  court  is  merely  to  construe  and  not  to  make  contracts ; 
hence  it  follows  that  where  the  terms  of  a  policy  are  explicit 
and  unambiguous,  a  court  can  only  enforce  it  as  an  ordinary 
contract,  giving  to  the  provisions  their  ordinary  meaning  and 
effect,  and  rejecting  any  portions  which  are  obnoxious  to  the 
objections  above  mentioned. 

V.  Accident  Assur.  Co.,  4  Ir.  R.  C.  L.  204;  Northwestern  Ins.  Co.  v. 
Atkins,  3  Bush  (Ky.),  333.  The  insolvency  of  a  credit  guaranty  in- 
surance company  during  the  life  of  a  policy  issued  by  it  is  such  a 
breach  of  the  contract  as  will  entitle  the  insured  to  recover  on  a 
quantum  meruit  without  furnishing  the  proof  stipulated  for.  Smith 
V.  National  Credit  Ins.  Co.,  65  Minn.  283,  33  L.  R.  A.  511. 


452  NOTICE    AND   PROOFS    OF   LOSS.  §  159 

But  when  tlie  conditions  and  requirements  of  a  policy  are 
vague,  indefinite,  or  uncertain,  and  when  a  literal  construc- 
tion would  lead  to  manifest  injustice  to  the  insured,  and  a 
liberal  but  still  reasonable  construction  would  prevent  injus- 
tice, the  latter  should  be  adopted,  because  the  parties  are  pre- 
sumed, when  the  language  used  by  them  permits,  to  have 
intended  a  reasonable  and  not  an  unreasonable  result. 

What  the  insured  absolutely  must  do  in  the  way  of  giving 
notice  of  proofs  of  loss,  is  often  difficult  to  determine.  The 
conditions  bearing  on  this  question  are  frequently  found 
scattered  through  different  portions  of  the  policy.  These 
must  all  be  read  together  in  ascertaining  what  compliance  on 
the  part  of  insured  is  made  essential  to  his  right  of  recovery.^ 

Thus  where  a  policy  after  prescribing  that  immediate  notice 
must  be  given  to  the  insurer  and  specifying  the  particulars  to 
be  stated  in  the  notice,  declares  "that  the  failure  to  give  such 
immediate  notice,  mailed  within  ten  days  from  the  happening 
of  the  accident,  shall  invalidate  all  claims  under  the  cer- 
tificate," the  forfeiture  clause  is  properly  construed  as  being 
intended  to  apply  to  the  failure  to  give  a  prompt  notice,  and 
not  to  the  omission  from  a  notice  promptly  furnished  of  some 
particular  enumerated  in  the  former  clause.^ 

*  Aetna  Ins.  Co.  v.  People's  Bank  of  Greenville  (C.  C.  A.),  62  Fed. 
224;  Columbian  Ins.  Co.  v.  Lawrence,  2  Pet.  (U.  S.)  25,  10  Pet.  507; 
Rheims  v.  Standard  Fire  Ins.  Co.,  39  W.  Va.  672;  Carpenter  y.  Ger- 
man American  Ins.  Co.,  52  Hun  (N.  Y.),  249;  Heywood  v.  Maine 
Mut.  Ace.  Ass'n,  85  Me.  289;  Phillips  v.  United  States  Benev.  Soc, 
120  Mich.  142,  79  N.  W.  2;  Trippe  v.  Provident  Fund  Soc,  140  N.  Y. 
23;  Matthews  v.  American  Cent.  Ins.  Co.,  154  N.  Y.  449,  39  L.  R.  A. 
433;  Peele  v.  Provident  Fund  Soc,  147  Ind.  543;  Badger  v.  Glens 
Falls  Ins.  Co.,  49  Wis.  389;  cases  ante.  See  post,  §  168,  "Liberal 
Construction  of  Conditions." 

*  Martin  v.  Manufacturers'  Ace.  Ind.  Co.,  151  N.  Y.  95. 


■§§  igo,  161  statdtort  regulation.  453 

Same  —  Mutual  Companies. 

§  160.  The  same  rules  govern  both  stock  and  mutual  insur- 
ance companies. 

Provisions  in  By-laws  of  Mutual  Companies. 

If  the  by-laws  of  a  mutual  insurance  company  are  made 
part  of  the  contract  of  insurance,  any  provisions  they  may  ' 
contain  regulating  the  time  or  manner  of  giving  notice  or 
proof  and  the  contents  thereof,  are  binding  upon  the  insured 
equally  as  if  incorporated  in  the  contract  itself.^ 

But  where  a  by-law  of  a  sick  benefit  association  requires 
of  the  insured  as  a  condition  precedent  to  recovery,  the  fur- 
nishing of  proofs  certified  to  by  a  medical  examiner  who  is 
the  appointee  and  agent  of  the  insurer,  and  the  insured 
upon  being  taken  sick  promptly  notified  the  insurer  and 
thereafter  in  due  time  furnished  proofs  in  proper  form  except 
that  they  were  not  certified  to  by  the  medical  examiner,  who 
without  fault  or  neglect  of  the  insured,  had  refused  to  sign 
them,  it  was  held  that  the  defendant  could  not  escape  liability 
because  of  such  negligence,  omission  or  default  of  its  own 

agent.** 

Statutory  Regulation. 

§  161.  The  giving  of  notice  and  proofs  of  loss  is  sometimes 
regulated  by  statute. 

In  some  states  the  legislature  has  limited  the  time  within 
which  proof  or  notice  can  be' required  by  the  insurer.     In 

*  Smith  V.  Haverhill  Mut.  Fire  Ins.  Co.,  1  Allen  (Mass.),  297,  79 
Am.  Dec.  733;  Troy  Fire  Ins.  Co.  v.  Carpenter,  4  Wis.  20. 

■'  Young  V.  Grand  Council,  A.  O.  of  A.,  63  Minn.  506,  distinguishing 
Lane  v.  St.  Paul  F.  &  M.  Ins.  Co.,  50  Minn.  227.  See,  also.  Supreme 
Council,  C.  B.  L.,  v.  Boyle,  10  Ind.  App.  301;  Anderson  v.  Supreme 
Council,  0.  of  C.  F.,  135  N.  Y.  107;  Lorscher  v.  Supreme  Lodge,  K. 
of  H.,  72  Mich.  316,  40  N.  W.  545;  Sheanon  v.  Pacific  Mut.  Life  Ins. 
Co.,  83  Wis.  507,  53  N.  W.  878;  Albert  v.  Order  of  Chosen  Friends, 
34  Fed.  721. 


454  NOTICE   AND    PROOFS    OF   LOSS.  §  162 

Maine,  an  act  was  passed  in  1893  to  the  effect  tliat  no  stipula- 
tion in  an  accident  insurance  policy  wliich  limits  the  time 
within  which  notice  shall  be  given  to  a  period  of  less  than 
sixty  days  (amended  in  1895  to  thirty  days)  after  the  acci- 
dent, shall  be  valid.  This  act  does  not  apply  however,  to 
any  contracts  previously  made.  No  legislative  enactment 
can  make  invalid  a  provision  in  an  executed  policy  otherwise 
valid.® 

And  the  Indiana  statute  (Burns'  Eev.  St.  1894,  §  4923) 
declares  invalid,  as  unreasonable,  a  condition  requiring  that 
the  nctice  of  loss  shall  be  furnished  immediately  or  within 
five  days,  and  requires  of  the  insured  only  reasonable  dili- 
gence in  giving  the  notice.  Under  this  statute  notice  given 
within  fifteen  days  is  given  within  a  reasonable  time.'^ 

Distinction  Between  Notice   and  Peoof  Sometimes 

Required. 

§  162.  If  notice  of  loss  and  proof  of  loss  are  required  by  the 
policy  they  must  both  be  furnished  within  the  prescribed  time. 

Where  notice  and  proof  are  both  required  as  conditions 
precedent  to  a  right  of  action  under  the  contract,  they  are  dis- 
tinct and  separate  acts,  and  both  must  be  furnished.  Proof 
of  loss,  if  seasonably  made,  might  serve  for  both  tlie  proof  and 
notice  contemplated,  as  the  more  authentic  and  verified  in- 
formation contained  in  the  proofs  would  ordinarily  convey 
all  the  particulars  Avhich  would  be  communicated  by  the  in- 

'  Hey  wood  v.  Maine  Mut.  Ace.  Ass'n,  85  Me.  289;  Kimball  v.  Ma- 
sons' Fraternal  Ace.  Ass'n,  90  Me.  183;  Bailey  v.  Hope  Ins.  Co.,  56 
Me.  474. 

'Gerraania  Fire  Ins.  Co.  v.  Deckard,  3  Ind.  App.  361,  28  N.  B.  868; 
Insurance  Co.  of  North  America  v.  Brim,  111  Ind.  281;  Trippe  v. 
Provident  Fund  Soc,  140  N.  Y.  23.  See,  also,  Gen.  St.  Conn.  §  2839; 
Rev.  St.  Me.  1883,  p.  446,  §  21;  2  Rev.  St.  Ind.  1888,  §  3770;  Rev. 
Laws  Vt.  1880,  §  3626;  Gen.  Laws  Minn.  1895,  c.  175,  §  25. 


§  163  SEVERAL    POLICIES   OF    SAME   INSURER.  455 

formal  notice,  but  the  converse  is  not  true.  A  mere  notice 
cannot  supply  the  place  of  or  dispense  with,  the  more  formal 
proof  provided  for  in  the  policy.* 

And  a  statement  of  loss  which  complies  with  the  statute 
and  the  requirements  of  the  policy  both  as  to  notice  and  proof 
and  is  served  in -time,  will  suffice  for  both,  even  though  in- 
tended by  the  insured  only  as  a  notice.® 

But  because  both  notice  and  proof  are  required  by  the  policy 
it  does  not  follow  that  they  must  be  both  given  at  the  same 
time.  The  giving  of  a  notice  may  be  waived  by  the  insurer 
without  thereby  waiving  the  service  of  the  proof. ^*^ 

Several  Policies  of  Same  Iistsurer. 

§  163.  A  single  notice  or  proof  to  an  insurer  carrying  sev- 
eral policies  may  suflBlce. 

Where  two  policies  upon  the  same  life,  issued  by  the  same 
company,  call  for  the  same  proof  of  death  and  proofs  under 
one  policy  are  accepted  without  objection,  the  representatives 
of  the  insured  are  not  bound,  in  the  absence  of  a  special  re- 
quirement to  that  effect,  to  furnish  other  proofs  under  the 
second  policy.  ^^ 

In  New  York  it  has  been  held  that  four  policies,  all  similar 

'O'Reilly  v.  Guardian  Mut.  Life  Ins.  Co.,  60  N.  Y.  173;  Under- 
wood Veneer  Co.  v.  London  G.  &  A,  Co.,  100  Wis.  378,  75  N.  W.  996; 
Foster  v.  Fidelity  &  Casualty  Co.,  99  Wis.  447,  75  N.  W.  69;  post, 
note  63. 

» Parks  V.  Anchor  Mut.  Fire  Ins.  Co.,  106    Iowa,  402,  76  N.  W.  743. 

"Central  City  Ins.  Co.  v.  Gates,  86  Ala.  558;  Niagara  Fire  Ins.  Co. 
V.  Scammon,  100  111.  644;  Lane  v.  St.  Paul  F.  &  M.  Ins.  Co.,  50  Minn. 
227;  O'Reilly  v.  Guardian  Mut.  Life  Ins.  Co.,  60  N.  Y.  173;  Graves,  v. 
Merchants'  &  Bankers'  Ins.  Co.,  82  Iowa,  637;  Badger  v.  Glens  Falls 
Ins.  Co.,  49  Wis.  389,  5  N.  W.  845;  Rines  v.  German  Ins.  Co.,  78  Minn. 
46,  80  N.  W.  839;  Killips'  v.  Putnam  Fire  Ins.  Co.,  28  Wis.  472;  Sum- 
merfield  v.  Phoenix  Assur.  Co.,  65  Fed.  292. 

"  Girard  Life  I.,  A.  &  T.  Co.  v.  Mutual  Life  Ins.  Co.,  97  Pa.  St.  15. 


456  NOTICE    AND   PROOFS    OF   LOSS.  §  164 

except  as  to  dates,  amounts,  and  numbers,  issued  by  tlie  same 
insurer  upon  the  same  property,  constitute  essentially  one 
policy;  and  proofs  of  loss  on  one,  followed  by  a  description 
of  the- other  three,  are  sufficient. -^^ 

No  Policy  Issued. 

§  164.  The  furnishing  of  notice  or  proof  of  loss  is  not  a  con- 
dition precedent  to  the  maintenance  of  a  suit  for  breach  of  an 
oral  agreement  to  insure. 

The  neglect  of  the  insured  to  make  a  certificate  and  proofs 
of  loss  within  the  time  required  by  the  ordinary  policies  of 
the  insurer,  will  not  prevent  a  recovery  in  an  action  for 
breach  of  a  parol  contract  to  insure  property  destroyed  and  to 
issue  a  policy  thereon, ^^  unless  the  form  of  policy  contem- 
plated be  fixed  by  law  and  requires  proofs.  ^^^ 

But  in  a  suit  upon  a  contract  to  issue  a  policy  of  insurance 
(though  none  was  in  fact  issued)  there  can  be  no  recovery  for 
a  loss,  unless  the  conditions  as  to  notice  and  statements  of  loss, 
contained  in  policies  of  the  form  usually  issued  by  the  in- 
surer, are  complied  with  or  waived.  ^^ 

1=  Dakin  v.  Liverpool,  L.  &  G.  Ins.  Co.,  13  Hun,  122,  77  N.  Y.  600'. 

^^  Nebraska  &  I.  Ins.  Co.  v.  Seivers,  27  Neb.  541,  43  N.  W.  351; 
Tayloe  v.  Merchants'  Fire  Ins.  Co.,  9  How.  (U.  S.)  390;  Gold  v. 
Sun  Ins.  Co.,  73  Cal.  216;  New  England  F.  &  M.  Ins.  Co.  v.  Robin- 
son, 25  Ind.  536;  Campbell  v.  American  Fire  Ins.  Co.,  73  "Wis.  100. 
40  N.  W.  661;  Sanford  v.  Orient  Ins.  Co.,  174  Mass.  416,  49  Cent. 
Law  J.  467.  See,  also,  Wooddy  v.  Old  Dominion  Ins.  Co.,  31  Grat. 
(Va.)  362;  Baile  v.  St.  Joseph  F.  &  M.  Ins.  Co.,  73  Mo.  371-387; 
Eureka  Ins.  Co.  v.  Robinson,  56  Pa.  St.  266. 

"'  Hicks  V.  British  American  Assur.  Co.,  162  N.  Y.  284. 

"Barre  v.  Council  Bluffs  Ins.  Co.,  76  Iowa,  609,  41  N.  W.  373; 
American  Cent.  Ins.  Co.  v.  Simpson,  43  111.  App.  98. 

Quaere:  Whether  the  difference  in  the  forms  of  action  is  the 
basis  of  the  different  results  arrived  at. 


§§  165,  166  computation  of  time.  457 

Total  Loss  Under  Valued  Policy. 

§  165.  Proofs  must  be  furnished  if  required  by  the  condi- 
tions of  a  valued  policy  even  though  the  loss  be  total. 

The  autliorities  arc  conflicting  on  tlie  question  as  to  whether 
proofs  are  necessary  in  case  of  total  loss  under  a  valued  policy. 
The  better  reasoning  would  seem  to  be  that  they  are,  and  that 
the  insurer  is  entitled  to  the  benefit  of  the  inforaiation  which 
is  required  in  the  proofs  as  distinguished  from  the  meagre 
statements  found  in  a  notice.  The  federal  courts  hold  that 
the  provisions  of  a  policy  requiring  the  furnishing  of  proofs 
must  be  complied  with,  even  though  the  loss  be  total  and  the 
value  of  the  property  destroyed  exceeds  the  amount  for  which 
it  is  insured. ^^  But  Pennsylvania  and  Texas  have  held  that 
where  the  policy  is  a  valued  one  and  the  loss  total,  and  notice 
of  loss  has  been  properly  given,  proofs  are  unnecessary.^'' 
And  Michigan  has  held  that  the  provisions  of  a  policy  requir- 
ing the  insured  in  case  of  fire  to  separate  the  damaged  and 
undamaged  property  and  make  a  complete  inventory  thereof, 
does  not  require  an  inventory  of  property  totally  destroyed.  "^^ 

Computation"  of  Time. 

§  166.  The  time  for  furnishing  notice  and  proofs  is  computed 
Ijy  the  rules  that  obtain  in  the  construction  of  other  contracts. 

The  time  for  furnishing  notice  or  proofs  of  loss  usually 

begins  to  run  from  the  date  of  the  loss.     The  ordinary  rules 

"Summerfield  v.  Phoenix  Assur.  Co.,  65  Fed.  292;  McCollum  v. 
Hartford  Fire  Ins.  Co.,  67  Mo.  App.  76. 

"Pennsylvania  Fire  Ins.  Co.  v.  Dougherty,  102  Pa.  St.  568;  Roe  v. 
Dwelling  House  Ins.  Co.,  149  Pa.  St.  94;  Wellcome  v.  People's  Equi- 
table Mut.  Fire  Ins.  Co.,  2  Gray  (Mass.),  480;  Harkins  v.  Quincy 
Mut.  Fire  Ins.  Co.,  16  Gray  (Mass.),  591;  Georgia  Home  Ins.  Co.  v. 
Leaverton  (Tex.  Civ.  App.),  33  S.  W.  579;  Weiss  v.  American  Fire 
Ins.  Co.,  148  Pa.  St.  350,  23  Atl.  991.  See,  also,  Meyer  v.  Insurance 
Co.  of  North  America,  73  Mo.  App.  166. 

"Johnston  v.  Farmers'  Fire  Ins.  Co.,  106  Mich.  96,  64  N.  W.  5. 


45 S  NOTICE   AND   PROOFS   OF   LOSS.  §  167 

governing  tlie  compntation  of  time  control. ^^  In  some  cases 
the  provisions  of  policies  have  been  so  construed  that  time 
does  not  begin  to  run  till  after  the  discovery  of  the  loss  or 
accident  for  which  claim  is  to  be  made.^^ 

Condition's  Requiring  Strict  Performance. 

§167.  Furnishing  notice  of  loss  or  proofs  of  loss,  or  both, 
within  a  specified  time  is  often  a  condition  precedent  to  a  right 
of  action  by  the  insured. 

When  a  policy  of  insurance  requires  notice  of  loss,  or  proof 
of  loss,  or  both,  to  "be  furnished  to  the  insurer  within  certain 
prescribed  periods  after  the  happening  of  the  fire,  damage, 
loss,  death,  or  accident  for  w^hich  claim  under  the  policy  is  to 
be  made,  as  a  condition  precedent  to  the  right  to  maintain  an 
action  on  the  policy,  such  provisions  must  be  strictly  complied 
with  to  enable  the  insured  to  recover,  and  a  failure  so  to  do^ 
will,  unless  waived  by  the  insurer,  operate  to  defeat  a  recovery 
under  the  policy. ^^     But  a  policy  requiring  notice  of  loss  to  be 

"Ante,  notes  1--6,  19;  Badger  v.  Glens  Falls  Ins.  Co.,  49  Wis.  389, 
5  N.  W.  845. 

"Trippe  v.  Provident  Fund  Soc,  140  N.  Y.  23,  22  L.  R.  A.  432; 
Peele  v.  Provident  Fund  Soc,  147  Ind.  543;  Cooper  v.  United  States 
Mut.  Ben.  Ass'n,  132  N.  Y.  334,  16  L.  R.  A.  138;  Kentzler  v.  Ameri- 
can Mut.  Ace.  Ass'n,  88  Wis.  589,  60  N.  W.  1002;  Hoffman  v.  Manu- 
facturers' Ace.  Ind.  Co.,  56  Mo.  App.  301;  Wooddy  v.  Old  Dominion 
Ins.  Co.,  31  Grat.  (Va.)  362;  Konrad  v.  Union  Casualty  &  Surety 
Co.,  49  La.  Ann.  636;  Mandell  v.  Fidelity  &  Casualty  Co., 
170  Mass.  173;  Coventry  Mut.  Life  Stock  Ins.  Ass'n  v.  Evans, 
102  Pa.  St.  281;  American  Surety  Co.  v.  Pauly,  170  U.  S.  133;  Phil- 
lips V.  United  States  Benev.  Soc,  120  Mich.  142,  79  N.  W.  1.  But 
see  Foster  v.  Fidelity  &  Casualty  Co.,  99  Wis.  447,  75  N.  W.  69;  Un- 
derwood Veneer  Co.  v.  London  G.  &  A.  Co.,  100  Wis.  378,  75  N.  W. 
996. 

="  Swain  v.  Security  Live-Stock  Ins.  Co.,  165  Mass.  322;  Riddles- 
barger  v.  Hartford  Ins.  Co.,  7  Wall.  (U.  S.)  390;  Weidert  v.  Stale 
Ins.  Co.,  19  Or.  261,  24  Pac.  242;  Gould  v.  Dwelling  House  Ins.  Co., 
90  Mich.  302,  51  N.  W.  455;  Scammon  v.  Germania  Ins.  Co.,  101  111. 


§  167  CONDITIONS    REQUIEING    STRICT    PERFORMANCE.  459 

furnished  within  a  given  time  will  not  he  constmed  as  forfeit- 
ing the  rights  of  the  insured  for  failure  so  to  do,  unless  such 
result  he  clearly  stipulated  for.^i  Thus  under  an  accident 
insurance  policy  providing  that  it  does  not  cover  disappear- 
ances, and  requiring  positive  proof  of  death  to  be  funiished 
within  six  months  from  the  date  of  the  accident,  the  time  for 
furnishing  proofs  of  death  does  not  expire  in  six  months  from 
the  disappearance  of  the  insured,  where  his  body  is  not  found 
and  his  death  not  certainly  ascertained  until  more  than  six 
months  after  his  disappearance.^^ 

The  knowledge  of  the  insurer  that  a  loss  has  occurred,  does 
not  relieve  the  insured  from  the  duty  of  giving  notice  and 
making  proofs  of  loss  according  to  the  terms  of  the  policy.^"^ 
Otherwise  if  the  insurer  acts  upon  any  information  which 

621;  Heywood  v.  Maine  Mut.'Acc.  Ass'n,  85  Me.  289;  Gamble  v.  Ac- 
cident Assur.  Co.,  4  Ir.  R.  C.  L.  204;  California  Sav.  Bank  v.  Ameri- 
can Surety  Co.,  87  Fed.  118;  Underwood  v.  Farmers'  Joint  Stock  Ins. 
Co.,  57  N.  Y.  500;  Southern  Home  B.  &  L.  Ass'n  v.  Home  Ins. 
Co.,  94  Ga.  167,  27  L.  R.  A.  844;  Brock  v.  Des  Moines  Ins.  Co.,  96 
Iowa,  39,  64  N.  W.  685;  Bowlin  v.  Hekla  Fire  Ins.  Co.,  36  Minn.  433; 
Shapiro  v.  Western  Home  Ins.  Co.,  51  Minn.  239;  and  cases  infra. 

"'  Rheims  v.  Standard  Fire  Ins.  Co.,  39  W.  Va.  672,  and  cases 
supra;  Carpenter  v.  German  American  Ins.  Co.,  52  Hun  (N.  Y.), 
249;  Trippe  v.  Provident  Fund  Soc,  140  N.  Y.  23;  Kentzler  v.  Amer- 
ican Mut.  Ace.  Ass'n,  88  Wis.  589,  60  N.  W.  1002. 

"  Kentzler  v.  American  Mut.  Ace.  Ass'n,  88  Wis.  589,  60  N.  W.  1002. 
The  policy  in  this  case  read:  "Notice  in  writing  *  *  *  shall  'oe 
given  the  secretary  of  the  association,  *  *  *  with  full  particu- 
'lars  of  the  accident  and  injury,  immediately  after  the  accident 
occurs.  Proofs  of  death,  in  like  manner  and  time,  shall  be  verified 
by  the  attending  physician  or  some  other  person  having  personal 
knowledge  of  the  fact;  and  unless  positive  proof  of  death  or  injury 
*  *  *  shall  be  furnished  to  the  association  [insurer]  within  six 
months,     *    *    *    then  all  claims  thereon  shall  be  forfeited." 

•■^•'Nebraska  &  I.  Ins.  Co.  v.  Seivers,  27  Neb.  541,  43  N.  W.  351; 
Smith  v.  Haverhill  Mut.  Fire  Ins.  Co.,  1  Allen  (Mass.),  297;  Cali- 
fornia Sav.  Bank  of  San  Diego  v.  American  Surety  Co.,  87  Fed.  119. 


400  NOTICE   AND   PROOFS    OF    LOSS.  §  107 

lie  may  hare  concerning  tlie  loss.^^  Tlie  provisions  of  a 
policy  that  the  written  notice  must  be  given  to  the  insurer 
forthwith  after  the  occurrence  of  a  loss,  and  that  preliminary 
proofs  of  loss  must  be  furnished  within  sixty  days  from  the 
date  of  the  fire,  and  that  the  failure  to  comply  with  these  terms 
and  conditions  of  the  policy  shall  cause  a  forfeiture  of  all 
claims  under  the  policy,  are  valid  and  binding  upon  the  in- 
sured ;  and  in  a  suit  upon  the  policy  it  is  necessary  for  the 
insured  to  plead  and  prove  that  such  notice  and  proofs  of  loss 
were  fully  furnished  to  the  company  within  the  specified 
time,  or  were  Avaived  by  the  company.^'' 

So  also  where  the  policy  contains  a  limitation  upon  the 
time  within  which  suit  can  be  brought,  and  a  further  pro- 
vision that  proofs  must  be  furnished  within  a  certain  time, 
and  that  no  action  shall  be  maintained  unless  the  insured  has 
fully  complied  with  all  the  requirements  of  the  policy.  ^^     In 

"^  Omaha  Fire  Ins.  Co.  v.  Dierks,  43  Neb.  473,  61  N.  W.  740;  Peele 
V.  Provident  Fund  Soc,  147  Ind.  543;  Roumage  v.  Mechanics'  Fire 
Ins.  Co.,  13  N.  J.  Law,  110,  1  Bennett,  Fire  Ins.  Cas.  389. 

=' German  Ins.  Co.  v.  Davis,  40  Neb.  700,  59  N.  W.  698;  Weidert  v. 
State  Ins.  Co.,  19  Or.  261,  24  Pac.  242;  Bowlin  v.  Hekla  Fire  Ins.  Co., 
36  Minn.  433;  Shapiro  v.  Western  Home  Ins.  Co.,  51  Minn.  239.  In 
this  case  the  policy  provided  that  in  case  of  loss,  etc.,  the  assured 
shall  within  sixty  days  render  an  account  of  the  loss  or  damage, 
stating,  etc.  *  *  *  The  loss  shall  be  due  and  payable  after  satis- 
factory proofs  of  the  same,  as  required  hereinbefore,  shall  have  been 
made  by  the  insured  under  the  limitations  of  the  policy,  and  received 
by  the  company.  No  suit  or  action  on  this  policy  for  recovery  6f  any 
claim  shall  be  sustainable  until  after  all  conditions,  stipulations, 
requirements,  and  provisions  of  this  policy  shall  have  been  com- 
plied with,  nor  unless  commenced  within  six  months  next  ensuing 
after  the  fire.  Sergent  v.  London  &  L.  &  G.  Ins.  Co.,  85  Hun 
(N.  Y.),  31. 

-'Gould  V.  Dwelling  House  Ins.  Co.,  90  Mich.  302,  51  N.  W.  455; 
Blossom  V.  Lycoming  Fire  Ins.  Co.,  64  N.  Y.  162;  Johnson  v.  Dakota 
F.  &  M.  Ins.  Co.,  1  N.  D.  167,  45  N.  W.  799;  Scammon  .v.  Germania 
Ins.  Co.,  101  111.  62L 


S  1G7  CONDITIONS    EEQUIRIXG    STRICT    PERFOKMANCE.  461 


Gould  V.  Dwelling  House  Ins.  Co.^*'^  tlie  policy  provided 
that  "in  case  of  loss  the  insured  shall  give  immediate  no- 
tice thereof  in  writing  to  this  company,  and  within  thirty 
days  thereafter  shall  render  a  sworn  statement  to  the  com- 
pany. No  suit  or  action  on  this  policy  shall  be  sustainable 
in  any  court  unless  the  insured  shall  have  fully  complied 
with  all  the  foregoing  provisions,  nor  unless  commenced  with- 
in six  months  after  the  loss ;"  and  strict  compliance  was  re- 
quired. In  Steele  v.  German  Ins.  Co.  of  Freeport,^^  the 
policy  differed  only  in  the  use  of  the  word  "until"  in  the 
place  of  the  word  "unless."  Distinguishing  between  these 
two  words  the  court  held  that  strict  compliance  was  not  nec- 
essary in  the  latter  case,  and  that  proofs  need  not  be  furnished 
within  the  stipulated  time.  In  Johnson  v.  Dakota  F.  &  M.  Ins. 
Co.,-""^  the  loss  was  not  payable  "until  requisite  proofs  duly 
certified  and  sworn  to  by  assured  *  *  *  are  received  at 
the  office  of  the  company.  *  *  ^  All  loss  and  damage 
under  this  policy  shall  be  due  and  payable  between  the  SOth 
day  of  November  and  the  first  day  of  December  of  the  year 
in  which  the  loss  occurs."  Held,  that  this  created  a  condition 
precedent  that  proofs  must  be  furnished,  and  that  a  failure  so 
to  do  avoided  the  policy,  but  that  the  time  to  furnish  proofs 
did  not  expire  before  November  20th  following  the  fire. 

And  a  mistake  by  the  insured  in  misdirecting  proofs  of  loss 
mailed  by  him. to  the  insurer,  resulting  in  the  latter  not  re- 
coiving  the  proofs  until  after  the  expiration  of  the  period 
Avithin  which  they  were  required  to  be  furnished,  is  fatal  to  the 
right  to  recover  on  the  policy.-^  A  provision  in  an  employers' 

"»  90  Mich.  302,  51  N.  W.  455, 

"93  Mich.  81,  53  N.  W.  514,  18  L.  R.  A.'  85,  citing  Tubbs  v. 
Dwelling  House  Ins.  Co.,  84  Mich.  646,  48  N.  W.  296.  And  see 
Aurora  F.  &  M.  Ins.  Co.  v.  Kranich,  36  Mich.  293, 

""  1  N.  D.  167,  45  N.  W.  799. 

"Madciox  V,  Dwelling-House  Ins.  Co.,  56  Mo.  App.  343. 


462 


NOTICE    AND    PEOOFS   OF    LOSS. 


167 


liability  policy  that  it  is  issued  subject  to  tbe  agreement  and 
condition  tbat,  upon  the  occurrence  of  an  accident  and  also 
on  the  receipt  of  a  claim  for  damages  resulting  from  such 
accident,  the  assured  shall  give  immediate  notice  thereof  to  the 
insurer,  makes  the  giving  of  such  notices  at  the  time  specified 
a  condition  precedent  to  recovery,  even  though  the  policy 
contains  no  forfeiture  clause. ^^ 

Under  a  bond  conditioned  to  indemnify  an  employer  against 
loss  from  the  dishonesty  of  an  employe,  requiring  notice  of 
any  claim  thereunder  to  be  given  within  three  months  after 
the  dishonesty  has  been  discovered  and  within  three  months 
after  the  expiration  of  the  bond,  recovery  cannot  be  had  for 
a  loss  resulting  from  such  dishonesty  during  the  original  term 
of  the  bond  unless  such  notice  is  .given  within  three  months 
after  the  termination  thereof;  and  the  time  is  not  extended 
by  a  renewal  of  the  bond  on  the  same  terms  for  a  further 
period.^*' 

An  insured  cannot  maintain  an  action,  unless,  within  sixty 
days  after  a  fire,  he  gives  notice  and  proofs  of  loss  under  a 
policy,  providing  loss  or  damage  shall  be  "paid  within  sixty 
days  after  due  notice  and  proof  thereof  made  by  the  insured, 
in  conformity  to  the  conditions  annexed  to  this  policy,"  one 
of  said  conditions  being  "Persons  sustaining  loss  or  damage 
by  fire  shall  forthwith  give  notice  thereof  in  writing  to  the 
company,  and  within  sixty  days  from  the  occurring  of  said 
fire  they  shall  deliver  as  particular  an  account  of  their  loss 
and  damage  as  the  nature  of  the  case  will  admit."^^  .Under 
a  policy  requiring  immediate  notice  of  any  accident  and  in- 


=»  Underwood  Veneer  Co.  v.  London  G.  &  A.  Co.,  100  Wis.  378,  75 
N.  W.  996;  Eastern  R.  Co.  v.  Relief  Fire  Ins.  Co.,  98  Mass.  420. 

'"De  Jernette  v.  Fidelity  &  Casualty  Co.,  17  Ky.  Law  Rep.  1088, 
25  Ins.  Law  J.  315,  33  S.  W.  828. 

^  Eastern  R.  Co.  v.  Relief  Fire  Ins.  Co.,  98  Mass.  420. 


§  167  CONDITIONS    KEQUIRING    STRICT    PERFORMANCE.  4.03 

jury  for  wliicli  claim  is  to  be  made,  and  affirmrtive  proof  of 
death  within  two  months  from  the  time  of  death,  a  faihire  to 
give  both  immediate  notice  of  an  injury  resulting  in  death 
and  proof  of  death  within  two  mouths,  will  defeat  recovery."^ 
Under  a  policy  of  accident  insurance  stipulating  that  the 
failure  to  notify  the  company  of  an  injury  for  ten  days  after 
it  is  received  shall  bar  all  claim,  no  suit  can  be  maintained 
if  notice  of  an  accident  is  not  given  until  twenty-six  days- 
thereafter,  notwithstanding  the  fact  that  a  request  was  made 
of  the  insurer  for  blank  proofs  of  loss  and  that  it  demanded 
further  information  as  to  the  nature  and  circumstailces  of 
the  injury.^^ 

In  a  recent  Massachusetts  case  involving  the  constnic- 
tion  and  validity  of  the  provisions  of  an  insurance  policy 
covering  live  stock,  it  appeared  that  the  horse  insured  died 
twenty  hours  after  being  taken  sick,  and  that  no  notice 
had  been  given  the  insurer  till  after  its  death.  The  policy 
read,  "If  the  animal  becomes  sick  or  disabled,  the  insured 
shall  notify  the  company  within  fifteen  hours,  and  the  com- 
pany may  send  one  of  its  surgeons  to  treat  the  case."     It 

"^  Foster  v.  Fidelity  &  Casualty  Co.,  99  Wis.  447,  75  N.  W.  69. 

'"Hey wood  v.  Maine  Mut.  Ace.  Ass'n,  85  Me.  289;  Kimball  v.  Ma- 
sons' Fraternal  Ace.  Ass'n,  90  Me.  183.  Contra,  Hoffman  v.  Manu- 
facturers' Ace.  Ind.  Co.,  56  Mo.  App.  301. 

In  Heywood  v.  Maine  Mut.  Ace.  Ass'n,  supra,  the  policy  stipulated 
that  "in  the  event  of  *  *  *  injury  for  which  claim  may  be  made 
under  this  certificate,  *  *  *  immediate  notice  shall  be  given  [the 
insurer]  in  writing;  *  *  *  and  failure  to  give  such  written  no- 
tice within  ten  days  of  the  occurrence  of  such  accident  shall  invali- 
date all  claims  under  this  certificate."  The  court  said:  "It  was  com- 
petent for  the  parties  to  make  the  agreement,  and  they  are  bound' 
by  it.  The  plaintiff  neglected  to  notify  the  company  of  any  accident 
or  injury  to  himself  until  twenty-six  days  had  elapsed.  *  *  * 
The  evidence  shows  no  waiver  on  part  of  the  company.  *  *  * 
Plaintiff  cannot  recover." 


404 


KOTICE    AND    PEOOFS    OF    LOSS. 


§16T 


was  lield  that  a  failure  to  give  notice  within  the  specified  time 
l)arred  any  right  of  recovery.^ ^  But  time  would  not  begin  to 
run  until  the  insured  had  knowledge  of  the  facts  upon  which 
he  based  his  claim.^^ 

The  condition  in  a  fidelity  insurance  bond  that  the  in- 
surer shall  bo  notified  in  writing  at  its  office  of  any  act  on  the 
part  of  the  employe  which  may  involve  a  loss  creating  re- 
sponsibility against  the  insurer,  as  soon  as  practicable  after 
the  occurrence  shall  have  come  to  the  knowledge  of  the  em- 
ployer, and  that  any  claim  thereunder  shall  be  made  as  soon 
as  possible  after  the  discovery  of  the  loss,  is  a  material  stipula- 
tion, and  conformity  to  it  is  a  condition  precedent  to  the 
recovery  on  the  bond.^^ 

In  case  of  loss  by  fire  after  the  death  of  the  original  insured, 
and  before  the  appointment  of  a  legal  representative,  those 
interested  in  the  policy  must  make  reasonable  efforts  to  see 
that  the  covenants  as  to  notice  and  proof  of  loss  are  kept,  and 
within  a  reasonable  time  must  use  such  agencies  as  the  law 
provides  to  secure  that  result.^ '^ 

Union  Mortgage  Clause. 

It  has  been  decided  that  the  so-called  "New  York  Standard 
mortgage  clause"  in  a  policy  of  insurance  which  declares  in 
substance  that  no  act  or  claim  of  the  mortgagor  shall  defeat 
the  insurance  as  to  the  interest  of  the  mortgagee,  does  not 
dispense  with  the  making  of  the  proofs  of  loss  stipulated  for 
in  the  policy  and  within  the  time  stipulated.     If  the  mortga- 


«*  Swain  v.  Security  Live  Stock  Ins.  Co.,  165  Mass.  322. 

''Mandell  v.  Fidelity  &  Casualty  Co.,  170  Mass.  173;  Coventry 
Mut.  Live  Stock  Ins.  Ass'n  v.  Evans,  102  Pa.  St.  281. 

^'  California  Sav.  Bank  of  San  Diego  v.  American  Surety  Co.,  87 
Fed.  118. 

"  Matthews  v.  American  Cent.  Ins.  Co.,  154  N.  Y.  449,  39  L.  R.  A. 
433;  Germania  Fire  Ins.  Co.  v.  Curran,  8  Kan.  9. 


§  168  LIIJEKAL   CONSTRUCTION    OF    CONDITIONS.  465 

gee  would  not  have  the  right  in  all  cases  to  furnish  the  proof, 
he  certainly  would  have  in  a  case  where  the  mortgagor  re- 
fuses to  do  so,  but  in  all  cases,  unless  waived  by  the  insurer, 
it  must  be  furnished  by  one  or  the  other.^^ 

Liberal  Construction'  of  Conditions. 

§  168.  A  very  liberal  construction  of  conditions  is  sometimes 
made  to  avoid  a  forfeiture  of  the  rights  of  an  insured. 

There  are  however  cases,  where  exceptional  circumstances 
and  the  impossibility  of  compliance  with  the  liberal  terms  of 
the  contract,  have  influenced  the  courts  towards  a  more  liberal 
construction  of  these  clauses  in  the  policy ;  and  this  upon  the 
principle  that  a  liberal  construction,  if  it  be  a  reasonable  one, 
and  will  prevent  injustice,  should  be  adopted  when  a  literal 
construction  would  lead  to  manifest  injustice.  These  cases 
make  a  distinction  between  conditions  preceeding  the  loss 
or  accident  and  upon  which  the  question  of  liability  primarily 
rests,  and  conditions  which  relate  to  matters  following  such 
loss  or  accident,  interpreting  the  former,  which  are  more 
usually  of  the  essence  of  the  contract,  more  strictly ;  and  the 
latter  relating  to  the  giving  of  notice,  making  proofs  of  loss, 
etc.,  that  is,  conditions  subsequent  to  the  capital  fact  of  lia- 
bility, as  requiring  only  what  is  reasonably  possible  of  the 
claimant.  This  is  especially  true  in  the  construction  of  life 
and  accident  insurance  policies ;  but  I  can  see  no  good  reason 
why,  if  the  rule  be  sound — as  it  seems  to  be — it  should  not  be 
applicable  to  all  classes  and  kinds  of  insurance  contracts,  pro- 
viding the  circumstances  and  conditions  exist  which  allow  of  its 
use  without  violating  the  agreement  between  tlie  insurer  and 
the  insured.  Thus  where  an  accident  insurance  policy  requires 

^  Southern  Home  B.  &  L.  Ass'n  v.  Home  Ins.  Co.,  94  Ga.  167,  27  L.. 
R.  A.  844.     See  contra,  Dwelling  House    Ins.  Co.  v.  Kansas   Loan  & 
Trust  Co.,  5  Kan.  App.  137,  26  Ins.  Law  J.  603,  48  Pac.  891. 
KERR,  INS.  —  30 


466  NOTICE    AND   PROOFS    OF    LOSS.  §  168 

notice  of  deatli  of  the  person  insured  and  full  particulars  of  the 
accident  and  injury  to  he  given  within  ten  days  from  the  date 
of  the  injury  or  death,  and  provides  that  the  failure  so  to  do 
shall  invalidate  all  claims  under  the  policy,  and  where  the 
policy  further  provides  that  the  insurance  does  not  cover  dis- 
appearances nor  injury  of  which  there  is  no  visible  mark  on 
the  person  of  the  insured,  it  has  been  held  that  failure  to  give 
the  insurer  notice  of  the  death  of  a  person  killed  in  the  falling 
of  a  building  until  eleven  days  after  the  accident,  is  not  fatal 
to  the  recovery  on  a  policy,  even  though  the  insured  was  miss- 
ing for  eleven  days,  and  it  was  supposed  during  all  of  that 
time  that  he  was  buried  in  the  ruins,  but  the  body  was  not 
dfscovered  until  ten  days  before  the  notice  was  given.  In  this 
case  the  time  was  held  to  begin  to  run  upon  the  day  of  the 
discovery  of  the  death. ^^ 

In  the  case  of  Peele  v.  Provident  Fund  Soc.,  it  appeared 
that  the  plaintiff's  intestate,  who  held  a  life  and  accident 
insurance  policy  in  the  defendant  company,  died  while  taking 
a  bath  on  the  17th  day  of  December,  1894 ;  that  the  plaintiff, 
his  wife,  was  prostrated  by  the  occurrence;  that  the  coroner 
made  an  examination  of  the  body  and  an  investigation  into 
the  facts,  the  result  of  which  plaintiff  did  not  learn  until  De- 
cember 28th;  between  these  dates  the  condition  of  plaintiff 
was  such  that  she  was  unable  to  transact  any  business ;  that  on 
the  second  day  of  January,  1895,  plaintiff  forwarded  to  the 
defendant  a  notice  of  the  accident.     The  court  says:  "The 

''Trippe  v.  Provident  Fund  Soc,  140  N.  Y.  23,  22  L.  R.  A.  432; 
Peele  v.  Provident  Fund  Soc,  147  Ind.  543;  McElroy  v.  John  Han- 
cock Mut.  Life  Ins.  Co.,  88  Md.  137,  41  Atl.  112;  Cooper  v.  United 
States  Mut.  Ben.  Ass'n,  132  N.  Y.  334,  16  L.  R.  A.  138;  McNally  v. 
Phoenix  Ins.  Co.,  137  N.  Y.  389;  Germania  Fire  Ins.  Co.  v.  Curran,  8 
Kan.  9;  Simons  v.  Iowa  State  T.  M.  Ass'n,  102  Iowa,  267,  71  N.  W. 
255;  Kentzler  v.  American  Mut.  Ace  Ass'n,  88  Wis.  589,  60  N,  W. 
1002.    See  post,  "Excuses  for  Noncompliance." 


§  1G8  LIBERAL   CONSTRUCTION    OF   CONDITIONS.  467 

condition  required  that  the  notice  should  be  given  'within 
ten  days  from  the  date  of  either  injury  or  death'  and  also  that 
it  should  contain  'full  particulars  of  the  accident  and  injury.' 
In  the  interpretation  of  conditions  in  j^olicies  of  insurance, 
courts  have  looked  to  the  intention  and  the  substantial  rights 
of  the  parties.  *  *  *  This  is  particularly  true  in  case 
of  the  death  of  the  assured.  In  the  case  of  any  insurance 
policy  the  one  who  takes  out  and  pays  for  the  policy  may  well 
be  expected  to  know  its  conditions  and  to  comply  with  them. 
But  in  the  event  of  his  death,  the  party  suffering  the  loss  is 
often  a.t  a  disadvantage,  both  as  to  knowing  the  conditions 
and  as  to  being  able  to  comply  with  them  according  to  the 
strict  letter  of  their  terms.^*^  *  *  *  In  Trippe  v.  Provi- 
dent Fund  Soc.,'*^^  *  *  *  ^]^g  foi-m  of  policy  and  notice 
being  also  identical,  the  court  said:  'The  condition  upon 
which  the  defense  is  based  was  to  operate  upon  the  contract 
of  insurance  only  subsequent  to  the  fact  of  a  loss.  It  must, 
therefore,  receive  a  liberal  and  reasonable  construction  in 
favor  of  the  beneficiaries  under  the  contract.  *  *  *  The 
provision  requires  not  only  notice  of  the  death,  but  'full  par- 
ticulars of  the  accident  and  injury.'  It  is  quite  conceivable 
that  in  many  cases  of  death  by  accident  the  fact  cannot  be  and 
is  not  kno^vn  until  days  or  even  weeks  after  it  has  occurred. 
Such  conditions  in  a  policy  of  insurance  must  be  considered 
as  inserted  for  some  reasonable  and  practical  purpose,  and 
not  with  a  view  of  defeating  a  recovery  in  case  of  loss  by 
requiring  the  parties  interested  to  do  something  manifestly 
impossible.  The  object  of  the  notice  was  to  enable  the  de- 
fendant, within  a  reasonabl'e  time  after  the  death  or  injury, 
to  inquire  into  all  the  facts  and  circumstances  while  they  were 
fresh  in  the  memory  of  witnesses,   in  order  to  determine 

*•!  Am.  &  Eng.  Enc.  Law  (2d  Ed.),  P-  323, and  cases  cited  in  notes. 
«•  140  N.  Y.  23,  35  N.  E.  316,  22  L.  R.  A.  432. 


46S  NOTICE  a^:d  proofs  of  loss.  §  16S 

whether  it  was  liable  or  not  upon  its  contract.  The  full 
particulars  of  the  death  which  the  condition  requires  cannot 
ordinarily  be  furnished  until  the  fact  of  death  and  the  man- 
ner in  which  it  occurred  are  ascertained.  *  *  *  The 
parties  having  contracted  that  the  notice  of  death  should  be 
accompanied  by  full  particulars  of  the  manner  in  which  it 
occurred,  and  the  attendant  circumstances,  they  evidently 
intended  that  it  should  be  given  only  when  the  fact  and 
manner  of  death  became  known  to  the  parties  who  were  re- 
quired to  act.  The  fair  and  reasonable  construction  of  this 
condition,  therefore,  is  that  the  ten  days  within  which  the 
notice  is  to  be  given  did  not  begin  to  run  from  the  date  of  the 
accident  or  the  disappearance  of  the  insured,  but  from  the 
time  when  the  body  was  found,  and  the  important  fact  of 
death,  with  the  circumstances  and  particulars  under  which 
it  occurred,  ascertained.  *  *  -^  The  plaintiff  *  *  * 
was  the  only  party  *  *  *  -^ho  could  give  the  notice, 
and  she  could  not  give  it  within  the  meaning  of  the  condition, 
until  she  had  knowledge  of  the  facts  which  she  was  bound  to 
communicate.  To  hold  that  the  plaintiff  was  bound  to  give 
notice  of  the  death  of  her  husband,  with  full  particulars,  be- 
fore she  had  any  knowledge  of  the  facts,  would  be  to  require 
her,  by  a  technical  and  literal  construction,  to  do  an  impossible 
thing,  which  was  not  within  the  intention  of  the  parties  when 
the  contract  was  made."^^  And  the  provisions  of  a  contract 
of  insurance  requiring  notice  of  death  within  ten  days  after 
the  occurrence  of  the  accident,  and  making  the  same  a  condi- 
tion precedent  to  the  right  of  recovery  upon  the  policy,  have 
been  held  unreasonable  and  invalid  as  applied  to  a  case  where 

*i  Citing  Insurance  Cos.  v.  Boykin,  12  Wall.  (U.  S.)  433;  Paltro- 
vitch  V.  Phoenix  Ins.  Co.,  143  N.  Y.  73,  25  L.  R.  A.  198;  May,  Ins.  217: 
Hinman  v.  Hartford  Fire  Ins.  Co.,  36  Wis.  164;  Hoffman  v.  Aetna 
Fire  Ins.  Co.,  32  N.  Y.  405. 


§  169  EXCUSES    FOR   NON-COMPLIANCE.  469 

death  did  not  intervene  until  after  ten  days  from  the  date  of 
the  accident.'*^ 

The  requirement  of  an  accident  policy  that  notice  of  an 
accident  must  be  given  within  five  days  after  it  happens  is 
<?omplied  with  by  giving  a  notice  within  five  days  after  the 
insured  learned  that  an  accident  was  the  cause  of  his  illness 
and  disability.'*^ 

Excuses  foe  Non-compltan"cb. 

§  169.  Impossibility  of  performance  of  the  conditions  of  a 
policy  regarding  the  giving  of  notice  or  proof  of  loss  is  some- 
times held  to  be  suflaeient  excuse  for  non-performance. 

The  supreme  court  of  Iowa  in  disposing  of  a  case  where 
the  insured  did  not  have  and  could  not  furnish  certified 
copies  of  the  bills  and  invoices  of  the  goods  destroyed  as  re- 
quired by  the  policy,  said:  "We  think  she  (insured)  is  not 
required  by  the  provision  (of  the  policy)  to  perform  an 
impossible  thing,  and  if  it  can  be  shown  that  without  any  fault 
or  fraud  on  her  part  compliance  is  rendered  impossible,  she 
may  recover  without  performing  the  conditions."^'*  And  if 
the  insured  was  so  insane  as  to  be  incapable  of  making  an 
intelligent  statement  and  proof  of  loss,  this  would  of  itself 
excuse  compliance  with  that  condition  of  the  policy. ^^ 

A  provision  in  an  accident  insurance  policy  payable  in 
case  of  death  to  legal  representatives,  making  it  the  duty  of 

«  Hoffman  v.  Manufacturers'  Ace.  Ind.  Co.,  56  Mo.  App.  301.  But 
see  contra,  Kimball  v.  Masons'  Fraternal  Ace.  Ass'n,  90  Me.  183. 

«  Phillips  V.  United  States  Benev.  Soc,  120  Mich.  142,  79  N.  W.  1. 

"Eggleston  v.  Council  Bluffs  Ins.  Co.,  65  Iowa,  308,  21  N.  W.  652; 
O'Brien  v.  Commercial  Fire  Ins.  Co.,  63  N.  Y.  Ill;  Bumstead  v.  Divi- 
dend Mut.  Ins.  Co.,  12  N.  Y.  81.  See,  also,  Wooddy  v.  Old  Dominion 
Ins.  Co.,  31  Grat.  (Va.)  362. 

« Insurance  Cos.  v.  Boykin,  12  Wall.  (U.  S.)  433;  Matthews  v. 
American  Cent.  Ins.  Co.,  154  N.  Y.  449,  39  L.  R.  A.  433;  Buchannan  v. 
Supreme  Conclave,  I.  0.  of  H.,  178  Pa.  St.  465,  34  L.  R.  A.  436. 


470 


NOTICE    AND    PKOOFS    OF   LOSS. 


§169 


the  claimant  to  give  notice  of  injury  witliin  seven  days  of  its 
occurrence,  does  not  aj)ply  to  the  administratrix  of  the  insured 
who  did  not  take  out  letters  of  administration  until  thirty 
days  after  the  injury.^*^ 

Contra. 

In  other  cases  it  has  been  held  that  only  the  act  of  God  vrill 
excuse  a  non-compliance,  and  that  failure  to  give  notice 
and  proof  because  of  instantaneous  death  of  the  insured  (no 
one  else  knomng  of  the  existence  of  the  policy)  avoids  the 
policy,  where  the  giving  of  notice  within  a  prescribed  time 
is  required — upon  the  ground  that  the  failure  was  not  due  to 
the  act  of  God  and  insured  ought  to  have  advised  someone  of 
the  existence  of  the  policy  ;'*''^  and  the  loss  of  the  policy  is  no 
excuse  for  the  failure  to  give  notice  within  the  prescribed 
time.^^ 

Burden  of  Proof  in  Case  of  Excuse  for  Non-compliance. 

Where  a  policy  requires  the  insured  to  do  certain  things, 
Avhich  he  fails  to  do,  the  burden  is  on  him  to  show  that  it  was 
impossible  for  him  to  comply  with  the  terms  of  the  policy,  by 
the  use  of  all  reasonable  means  within  his  power.'*® 


*' Globe  Ace.  Ins.  Co.  v.  Gerisch,  163  111.  625;  McElroy  v.  John 
Hancock  Mut.  Life  Ins.  Co.,  88  Md.  137,  41  Atl.  112. 

"Gamble  v.  Accident  Assur.  Co.,  4  Ir.  R.  C.  L.  204;  Home  Ins.  Co. 
V.  Lindsey,  26  Ohio  St.  348;  Joyce,  Ins.  §  3278. 

«Blakeley  v.  Phoenix  Ins.  Co.,  20  Wis.  217;  Prevost  v.  Scottish  U. 

6  N.  Ins.  Co.,  14  Rap.  Jud.  Que.  C.  S.  203.  On  question  of  the  pos- 
sible effect  of  war  on  the  giving  of  notice,  see  Cohen  v.  New  York 
Mut.  Life  Ins.  Co.,  50  N.  Y.  610;  New  York  Life  Ins.  Co.  v.  Clopton, 

7  Bush   (Ky.),  179;   Dillard  v.  Manhattan  Life  Ins.  Co.,  44  Ga.  119. 
«  Scottish  U.  &  N.  Ins.  Co.  v.  Keene,  85  Md.  276;  Langan  v.  Royal 

Ins.  Co.,  162  Pa.  St.  357. 


§  170       CONDITIONS   NOT    REQUIRING    STRICT   COMPLIANCE.         471 

CoN'DiTiON'S  Not  Requiring  Strict  Compliance. 

§  170.  A  policy  will  not  be  held  to  create  conditions  prece- 
dent to  the  right  of  action  thereon,  nor  to  provide  for  forfeiture 
in  case  of  non-compliance,  unless  such  a  construction  is  neces- 
sary. 

Other  policies  require  the  insured  to  furnish  notice  and 
proofs  of  loss  at  some  time  after  the  fire,  death,  or  accident, 
and  before  suit,  without  definitely  limiting  the  time  for  per- 
formance and  without  making  compliance  within  a  given  time 
a  condition  precedent  to  the  right  to  maintain  an  action.  In 
such  policies  the  provisions  concerning  the  time  of  serving 
notice  and  proofs  of  loss  are  merely  directory  and  not  manda- 
tory, and  only  create  conditions  precedent  to  a  right  to  recover. 
Mere  delay  in  furnishing  notice  or  proofs  does  not  avoid  a 
policy  or  prevent  recovery  thereon  unless  such  a  result  be 
clearly  stipulated  for,  but  it  defers  the  time  of  payment. 
The  stipulations  requiring  notice  of  loss  are  more  strictly  con- 
strued than  those  regulating  the  giving  of  proofs.^*^  In  Car- 
penter V.  German-American  Ins.  Co.,  the  language  of  the 
policy  was,  "  'in  case  of  loss  the  assured  shall  give  immediate 
notice  thereof,  and  shall  render  to  the  company  a  particular 
account  of  said  loss  under  oath  stating,'  etc.  Here  follows 
a  specification  of  the  facts  required  to  be  stated."  Immedi- 
ate notice  of  the  loss  was  given  and  acknowledged.  The  court 
said:  "No  time  being  fixed  within  which  the  preliminary 
proofs  shall  be  rendered,  the  contract  will  be  construed  to 
intend  a  reasonable  time.  *  *  *  But  what  was  the  ef- 
fect of  failure  on  the  part  of  the  plaintiff  to  perform  this 
stipulation  of  the  contract  ?     None  is  specified  in  the  policy. 

'"Carpenter  v.  German  American  Ins.  Co.,  52  Hun  (N.  Y.),  249; 
Miller  v.  Hartford  Fire  Ins.  Co.,  70  Iowa,  704,  29  N.  W.  411;  Rines  v. 
German  Ins.  Co.,  78  Minn.  46,  80  N.  "W.  840;  Kahnweiler  v.  Phoenix 
Ins.  Co.  cf  Brooklyn,  57  Fed.  562.    See  ante,  notes  8-10. 


472  NOTICE   AND   PROOFS   OF   LOSS.  §  ITO 

Performance  of  the  stipulation  is  not  in  terms  made  a  condi- 
tion of  liability  on  the  part  of  the  defendant,  nor  is  a  for- 
feiture of  the  policy  attached  to  that  stipulation  as  a  penalty 
for  its  non-performance.  *  *  *  We  think  the  delay  in 
rendering  those  proofs  did  not  of  itself  necessarily  work  a 
forfeiture  of  the  policy  or  preclude  a  recovery  by  the  plain- 
tiffs." And  a  clause  limiting  the  time  for  furnishing  proofs 
of  loss  may  be  so  qualified  as  not  to  render  a  strict  compli- 
ance within  the  time  specified  a  condition  precedent  to  a  right 
of  action.  Where  the  policy  requires  proofs  of  loss  but  does 
not  prescribe  any  time  within  which  they  are  to  be  furnished, 
they  may  be  furnished  within  any  reasonable  time.^^ 

Where  a  policy  in  terms  requires  immediate  notice  to  be 
given  but  specifies  no  particular  time  within  which  proofs  of 
loss  may  be  furnished,  further  than  that  "the  insured  shall 
render  to  the  company  a  particular  account  of  said  loss  in 
writing  under  oath;  until  such  proofs  are  produced  the  loss 
shall  not  be  deemed  proved  or  payable,"  and  further  pro- 
viding that  the  loss  is  not  payable  until  the  expiration  of 
sixty  days  from  the  time  of  furnishing  proofs  and  that  the 
insured  shall  have  one  year  from  the  time  of  the  loss  in  which 
to  bring  suit,  the  insured  is  only  required  to  furnish  proofs 
of  loss  within  ten  months  after  the  loss.^^  A  condition  that 
the  insured  must  furnish  preliminary  proofs  within  thirty 
days  after  the  fire  and  "if  the  claim  of  loss  is  for  a  building, 
shall  procure  a  duly  verified  certificate  of  a  builder  as  to  the 
cash  value  of  the  building  before  the  fire,  which  shall  be  at- 
tached to  and  form  a  part  of  such  proofs  *  *  *  and  shall 
be  verified  by  the  insured"  does  not  compel  the  furnishing  of 

*'  Cases  supra. 

"Niagara  Fire  Ins.  Co.  v.  Scammon,  100    111.  645;    Killips  v.  Put- 
nam Fire  Ins.  Co.,  28  Wis.  472. 


§  170        CONDITIONS    NOT    REQUIRING    STRICT   COMPLIANCE.  473 

the  certificate  within  thirty  days  after  the  fire.^^  And  where 
a  policy  provides  under  a  distinct  head  from  conditions  avoid- 
ing it,  that  all  proceedings  after  a  loss  shall  be  had  according 
to  provisions  endorsed  on  the  policy,  which  latter  are  to  the 
effect  that  proofs  of  loss  shall  be  furnished  in  thirty  days  and 
that  a  claim  shall  not  be  due  or  payable  until  sixty  days  after 
full  completion  and  compliance  with  the  requirements  of  the 
policy,  and  that  no  suit  shall  be  commenced  thereon  more 
than  six  months  after  the  occurrence  of  the  fire,  the  failure 
to  furnish  proofs  of  loss  within  thirty  days  does  not  avoid 
the  policy  but  merely  postpones  the  time  of  its  payment.^* 
Under  a  Michigan  standard  policy  a  failure  to  furnish  proofs 
of  loss  within  the  time  mentioned  therein  is  not  fatal  to  a 
right  of  action.  ^^ 

And  where  the  condition  of  a  policy  was  that  the  person 
sustaining  a  loss  or  damage  by  fire  should  forthwith  give 
notice  in  writing  to  the  company  and  as  soon  as  possible 
thereafter  deliver  an  account  of  loss  without  expressly  pro- 
viding that  a  failure  so  to  do  should  work  a  forfeiture,  it  has 
been  held  that  proofs  of  loss  furnished  two  months  after  the 
fire  are  in  time.^^ 

Compliance  -with,  the  terms  of  a  policy  as  to  proof  of  loss 
and  time  for  bringing  suit,  is  not  necessary  to  recovery  under 

"'  Summerfield  v.  Phoenix  Assur.  Co.,  65  Fed.  292. 

"Hall  V.  Concordia  Fire  Ins.  Co.,  90  Mich.  403,  51  N.  W.  524; 
Vangindertaelen  v.  Phenix  Ins.  Co.,  82  Wis.  112,  51  N.  W.  1122; 
Towne  v.  Springfield  F.  &  M.  Ins.  Co.,  145  Mass.  582;  Steele  v.  Ger- 
man Ins.  Co.,  93  Mich.  81,  18  L.  R.  A.  85,  53  N.  W.  514;  Kenton  Ins. 
Co.  V.  Downs,  90  Ky.  236,  13  S.  W.  882;  Tubbs  v.  Dwelling  House 
Ins.  Co.,  84  Mich.  646;  Coventry  Mut.  Live  Stock  Ass'n  v.  Evans,  102 
Pa.  St.  281. 

"  Rynalski  v.  Insurance  Co.  of  Pennsylvania,  96  Mich.  395. 

"Sun  Mut.  Ins.  Co.  v.  Mattingly,  77  Tex.  162;  Killips  v.  Putnam 
Fire  Ins.  Co.,  28  Wis.  472. 


474  NOTICE    AND    PROOFS    OF    LOSS.  §  170 

a  statute  making  an  agent  for  an  unlicensed  foreign  company 
personally  liable  for  the  amount  of  tlie  loss.^^ 

Where  a  policy  provides  that  no  suit  shall  be  maintained 
until  after  the  insured  shall  fully  comply  with-  the  require- 
ments of  the  policy  nor  unless  suit  is  brought  within  a  given 
time,  proofs  of  loss  may  be  furnished  within  a  reasonable 
time  after  the  fire  though  later  than  the  time  fixed  by  the  pol- 
icy, and  if  such  proofs  are  accepted  and  retained  by  the  insurer 
without  objection  any  defect  in  time  of  service  is  waived.^ ^ 

Proofs  given  within  a  reasonable  time  are  sufficient  compli- 
ance with  the  terms  of  a  policy  requiring  notice  to  be  given 
within  twenty-four  hours  after  a  fire  occurred  without  fix- 
ing any  penalty  or  forfeiture  for  failure  so  to  do.^^ 

Proofs  furnished  on  or  before  the  day  on  which  the  loss 
is  payable  by  the  terms  of  a  policy  are  sufficient  where  proofs 
are  required,  but  no  time  for  furnishing  them  is  fixed,  and 
any  loss  on  the  policy  becomes  due  and  payable  at  a  given  time 
after  its  occurrence.^" 

A  stipulation  that  the  insured  shall  upon  the  happening  of  a 
fire  forthwith  "give  notice  of  the  loss  and  within  thirty  days, 
render  a  particular  account  thereof  and  also  produce  a  certifi- 
cate, etc.,  does  not  require  that  the  certificate  be  furnished 
within  the  thirty  days.®^ 

"  Noble  V.  Mitchell,  100  Ala.  519,  25  L.  R.  A.  238,  164  U.  S.  367. 

=^«  Rheims  v.  Standard  Fire  Ins.  Co.,  39  W.  Va.  672.  In  this  case  the 
policy  said:  "Within  thirty  days  after  the  fire,  the  assured  shall 
render  a  *  *  *  detailed  statement  of  the  loss  *  *  *  in  writ- 
ing =f!  *  *  ]sjq  gyjj^  Qj.  action  *  *  *  for  the  recovery  of  any 
claim  by  virtue  of  this  policy  shall  be  sustainable  *  *  *  until 
after  full  compliance  *  *  *  with  all  the  foregoing  requirements, 
nor  unless  such  suit  *  *  *  shall  be  commenced  within  six 
months  next  after  the  date  of  the  fire." 

=»  Coventry  Mut.  Live  Stock  Ass'n  v.  Evans,  102  Pa.  St.  281. 

^"  Johnson  v.  Dakota  F.  &  M.  Ins.  Co.,  1  N.  D.  167,  45  N,  W.  799. 

«i  Badger  v.  Glens  Falls  Ins.  Co.,  49  Wis.  389,  5  N.  W.  845;   Sum- 


8  171  time  to  furnish  not  definite.  4  <  i> 

Time  to  Furnish  Not  Definite. 

§  171.  A  requirement  that  notice  or  proofs  must  be  furnislied 
"immodiataly,"  or  "  forthwith,"  or  "  as  soon  as  possible,"  etc., 
will  be  held  to  mean  that  they  must  be  furnished  with  reason- 
able promptness  and  within  a  reasonable  time,  construing 
these  terms  in  the  light  of  all  the  facts  and  circumstances  sur- 
rounding each  ease. 

What  is  a  reasonable  time  is  sometimes  a  question  of  law, 
but  usually  a  question  of  fact. 

General  Construction  of  Such  Terms. 

Many  policies  while  making  the  furnishing  of  notice  and 
proofs,  or  one  of  them,  soon  after  loss  or  damage  or  accident 
It  condition  precedent  to  a  right  to  recovery,  have  either  failed 
to  fix  any  time  within  which  this  must  be  done,  or  have  desig- 
nated that  time  only -by  using  such  vague  and  indefinite  terras 
as  "forthwith,"  "immediately,"  "as  soon  as  possible,"  "early," 
"within  a  reasonable  time,"  etc.  Such  terms  are  synonymous 
and  incapable  of  absolute  definition  or  limitation.  They  are 
elastic  in  their  meaning  and  relative  in  their  use  and  appli- 
cation. They  all  mean  "within  a  reasonable  time"  under  all 
the  facts  and  circumstances  of  each  case.  What  would  be  "a 
reasonable  time"  in  one  case  might  be  unreasonable  in  an- 
other. But  the  giving  of  the  notice  or  proof  as  required  may 
nevertheless  be  a  condition  precedent,  and  if  such  it  be,  non- 
compliance by  the  insured,  unless  waived  by  the  company,  will 
defeat  any  recovery. °^ 

merfield  v.  Phoenix  Assur.  Co.,  65  Fed.  292;  Lane  v.  St.  Paul  F.  & 
M.  Ins.  Co.,  50  Minn.  227;  Killips  v.  Putnam  Fire  Ins.  Co.,  28  Wis. 
472. 

»•=  Brown  v.  London  Assur.  Corp.,  40  Hun  (N.  Y.),  101;  Insurance 
Co.  of  North  America  v.  Brim,  111  Ind.  281;  Kingsley  v.  New  Eng- 
land Mut.  Fire  Ins.  Co.,  8  Cush.  (Mass.)  393;  Edwards  v.  Baltimore 
Fire  Ins.  Co.,  3  Gill  (Md.),  176;  St.  Louis  Ins.  Co.  v.  Kyle,  11  Mo. 
278;  Rines  v.  German  Ins.  Co.,  78  Minn.  46,  80  N.  W.  839,  and  cases 
supra;  Baker  v.  German  Fire  Ins.  Co.,  124  Ind.  490,  24  N.  E.  1041; 
Carey  v.  Farmers'  Ins.  Co.,  27  Or.  146,  40  Pac.  91. 


476 


NOTICE   AND   PROOFS   OF   LOSS. 


§171 


In  this  connection  tlie  distinction  between  "notice"  and 
"proof"  of  loss  must  not  be  overlooked.  The  functions  of  the 
two  are  different.  "Notice"  of  a  loss  or  death  or  accident 
should  always  be  given  with  as  little  delay  as  the  circum- 
stances of  a  case  will  permit,  so  as  to  enable  the  insurer  to  act 
promptly  and  investigate  while  the  occurrence  is  fresh  in  the 
minds  of  people,  and  before  evidence  which  it  might  desire 
has  been  lost  or  destroyed;  and  to  further  enable  it  to  take 
prompt  and  proper  measures  to  protect  its  interest,  and,  in 
case  of  fire,  to  preser^^e  property  saved  from  further  damage 
or  loss ;  but  the  proof  required  for  the  purpose  of  facilitating 
an  adjustment  of  a  loss  need  not  be  presented  so  promptly. 
The  clause  concerning  the  furnishing  of  preliminary  proofs 
is  construed  more  liberally. 

In  a  case  recently  decided  by  the  supreme  court  of  Minne- 
sota the  policy  required  that  "a  statement  in  writing  signed 
and  sworn  to  by  the  insured  shall  be  forthwith  rendered  to  the 
company  setting  forth  the  value  of  the  property  insured,  the 
interest  of  the  insured,"  etc.  The  proofs  of  loss  were  mailed  to 
the  defendant  eighteen  days,  and  received  by  it  twenty-one 
days,  after  the  fire.  It  was  contended  that  the  proofs  were  not 
furnished  in  time,  that  therefore  plaintiff  could  not  recover. 
The  court  said:  "We  cannot  so  hold.  'Forthwith'  means 
*with  due  diligence  under  the  circumstances  of  the  case  and 
without  unnecessary  or  unreasonable  delay.'  2  May,  Ins. 
§  462.  There  are  cases  holding  that  notice  of  loss  given  within 
less  time  than  eighteen  days  after  the  fire  is  not  given  'forth- 
with.' Id.  But  a  notice  of  loss  is  a  simple  matter,  while  such 
a  proof  of  loss  as  is  required  by  the  above  quoted  provision  of 
the  policy  is  not.  It  may  take  considerable  time  to  prepare 
such  a  proof  of  loss,  and  may  require  the  services  of  an  at- 
torney or  some  one  skilled  in  the  business.     Under  these  cir- 


§  171  TIME    TO    FURNISH    NOT    DEFINITE.  477 

ciimstances  we  cannot  liold  tliat  eighteen  days  after  the  fire  h 
an  unreasonable  time  in  which  to  render  the  same."^^ 

Whether  or  not  a  party  has  used  due  diligence  in  giving 
notice  or  proof  of  loss,  is  sometimes  a  question  of  law  for  the 
court,  and  sometimes  a  question  of  fact  for  a  jury  to  pass, 
upon.  Where  the  facts  are  not  in  dispute  and  the  inferences 
are  certain,  and  the  sufficiency  of  an  excuse  for  delay  not  in- 
volved, it  is  for  the  court  to  say  whether  or  not  the  terms  and 
conditions  of  the  policy  as  to  time  have  been  complied  with.''^ 

But  upon  a  jury  trial  where  such  facts  or  circumstances  are 
open  for  ascertainment  of  a  jury,  it  should  be  left  for  them  to 
determine  as  a  question  of  fact.  Extreme  cases  either  way 
may  be  easily  determined.  Between  them  there  is  a  wide 
stretch  of  debatable  ground  and  cases  falling  within  it  are 
governed  so  much  by  the  particular  circumstances  of  each  case, 
that  it  is  much  better  to  determine  the  matter  as  a  question  of 
fact.«5 

«^Rines  v.  German  Ins.  Co.,  78  Minn.  46,  80  N.  W.  839;  Central 
City  Ins.  Co.  v.  Gates,  86  Ala.  558;  Wightman  v.  Western  M.  &  F. 
Ins.  Co.,  8  Rob.  (La.)  442,  2  Bennett,  Fire  Ins.  Cas.  330;  Ewards  v. 
Baltimore  Fire  Ins.  Co.,  3  Gill  (Md.),  176,  2  Bennett,  Fire  Ins.  Cas. 
405;  Trippe  v.  Provident  Fund  Soc,  140  N.  Y.  23,  22  L.  R.  A.  432; 
Peele  v.  Provident  Fund  Soc,  147  Ind.  543;  McElroy  v.  John  Han- 
cock Mut.  Life  Ins.  Co.,  88  Md.  137,  41  Atl.  112. 

in  Wightman  v.  Western  M.  &  F.  Ins.  Co.,  supra,  the  court  said: 
"Although  the  policy  stipulates  that  the  notice  shall  be  given  'forth- 
with,' we  do  not  understand  that  to  mean  in  an  hour  or  in  any  other 
very  brief  space  of  time,  but  without  unnecessary  delay." 

"Dwelling  House  Ins.  Co.  v.  Dowdall,  159  111.  179;  Baker  v.  Ger- 
man Fire  Ins.  Co.,  124  Ind.  490;  Brown  v.  London  Assur.  Corp.,  40 
Hun  (N.  Y.),  101;  Columbia  Ins.  Co.  v.  Lawrence,  10  Pet.  (U.  S.) 
507;  Kimball  v.  Howard  Fire  Ins.  Co.,  8  Gray  (Mass.),  33;  Bennett 
V.  Lycoming  County  Mut.  Ins.  Co.,  67  N.  Y.  274. 

"'^Lockwood  V.  Middlesex  Mut.  Assur.  Co.,  47  Conn.  553;  Donahue 
V.  Windsor  Co.  Mut.  Fire  Ins.  Co.,  56  Vt.  374;  Edwards  v.  Baltimore 
Fire  Ins.  Co.,  3  Gill  (Md.),  176;  O'Brien  v.  Phoenix  Ins.  Co.,  76 
N.  Y.  459-  McFarland  v.  United  States  Mut.  Ace.  Ass'n,  124  Mo.  204. 


478  NOTICE    AND    PROOFS    OF    LOSS.  §  171 

The  supreme  court  of  Indiana  says  of  tliis  question :  "Tlie 
purpose  of  tlie  notice  is  to  enable  the  company  to  take  proper 
precautions  for  its  own  protection.  The  notice  must  he  reason- 
able under  all  the  circumstances.  Where  the  facts  are  not  in 
dispute  or  where  they  have  been  ascertained  by  the  proper 
tribunal  for  that  purpose,  it  becomes  a  question  of  law  for  the 
court  to  determine  whether,  under  the  facts  and  circumstances 
of  a  given  case,  the  notice  was  reasonable.  Where  the  facts 
tending  to  show  an  excuse  for  the  delay  are  in  dispute  or  where 
it  is  a  disputed  question  whether  the  delay  was  occasioned  by 
certain  facts,  it  is  for  the  jury  to  ascertain  the  facts  and  the 
cause  and  effect  of  the  delay,  and,  under  proper  instructions 
from  the  court  as  to  the  force  and  effect  of  the  facts  found, 
determine  whether  or  not  under  all  the  circumstances  reason- 
able notice  of  the  loss  was  given."^*' 

The  supreme  court  of  Indiana  says  of  this  question:  "The 
question  of  what  is  a  reasonable  time  is  a  question  of  law  for 
the  court  in  two  classes  of  cases,  viz:  (1)  'Commercial  trans- 
actions which  happen  in  the  same  way  day  by  day,  and  pre- 
sent the  question  of  reasonable  time  on  the  same  data  in  con- 
tinually recurring  instances,  so  that  by  a  series  of  decisions  of 
the  courts  the  reasonable  time  has  been  rendered  certain; 
*  *  *  (2)  where  the  time  taken  is  so  clearly  reasonable 
or  unreasonable  that  there  can  l>e  no  room  for  doubt  as  to 
the  proper  answer  to  the  question.  Where,  however,  the 
answer  to  the  question  is  one  dependent  on  many  different 
circumstances,  which  do  not  constantly  recur  in  other 
cases  of  like  character,  and  Avith  respect  to  which  no  certain 
rule  of  law  has  heretofore  been  laid  doMH,  or  could  be  laid 
do-vvn,  the  question  is  one  of  fact  for  the  jury."^"^ 

^'Insurance  Co.  of  North  America  v.  Brim,  111  Ind.  281;  Wood. 
Fire  Ins.  §  414. 

«^  Hamilton  v.  Phoenix  Ins.  Co.  of  Hartford  (C.  C.  A.),  61  Fed.  379. 


§    171  TIME    TO    FURNISH    NOT   DEFINITE.  479 

Proofs  of  loss  are  furnislied  "in  due  time"  if  tliey  arrive'at 
the  postoffiee  in  the  citj  where  the  main  office  of  the  company 
it  located  in  time  for  it  to  receive  them  within  the  time  limited, 
although  it  did  not  call  for  nor  receive  them  until  the  next 
day.®^ 

Proofs  mailed  by  a  receiver  of  a  national  bank  on  June  24, 
of  a  loss  by  fraud  of  the  cashier  discovered  the  latter  part  of 
May,  are  made  "as  soon  as  practicable"  within  the  meaning 
of  a  cashier's  bond  where  notice  in  writing  was  given  to  the 
surety  company  as  soon  as  the  loss  was  discovered  with  a  re- 
quest for  blanks  to  make  proofs  of  loss  upon  and  such  blanks 
were  mailed  by  the  surety  company  on  May  31.^^ 

If  the  policy  does  not  specify  any  time  within  which  the 
proofs  must  be  furnished  a  reasonable  time  will  be  allowed^" 

Under  the  provisions  of  a  policy  requiring  "early  notice"  of 
any  damage  to  be  given  to  the  insurer,  a  notice  of  an  injury 
to  grain  in  transportation  given  on  the  Monday  or  Tuesday 
following  the  Saturday  on  which  the  damage  was  discovered 
while  the  grain  was  being  unloaded  is  served  in  time,  where 
the  policy  continues  in  force  until  the  grain  "shall  be  safely 
landed  at  point  of  destination."^^ 

Where  a  policy,  required  that  notice  of  loss  should  be  given 
within  twenty-four  hours  after  it  occurred,  but  provided  no 
penalty  or  forfeiture  for  non-compliance,  it  is  sufficient  to  give 
notice  within  a  reasonable  time  after  insured  knew  of  the 

**  Caldwell  v.  Dwelling  House  Ins.  Co.,  61  Mo.  App.  4, 

"American  Surety  Co.  v.  Pauly,  170  U,  S.  133,  42  L.  Ed.  977;  Kon- 
rad  V.  Union  Casualty  &  Surety  Co.,  49  La.  Ann.  686;  California  Sav. 
Bank  of  San  Diego  v.  American  Surety  Co.,  87  Fed.  119;  American 
Credit  Ind.  Co.  v.  Wood,  38  U.  S.  App.  585,  19  C.  C.  A.  273. 

'*  Miller  v.  Hartford  Fire  Ins.  Co.,  70  Iowa,  704;  Springfield  F.  & 
M.  Ins.  Co.  V.  Brown,  128  Pa.  St.  392,  18  Atl.  396. 

"Rodee  v.  Detroit  F.  &  M.  Ins.  Co.,  74  Hun  (N.  Y.),  146. 


480  NOTICE   AND   PKOOFS   OF   LOSS.  §1'^! 

loss.'^^  Where  the  insured  immediately  upon  the  happening 
of  a  fire  applied  to  an  agent  of  the  insurer  for  blank  proofs 
of  loss  and  the  latter  sent  to  the  company  for  the  same  and 
upon  their  receipt  delivered  them  to  the  insured,  who  there- 
upon promptly  prepared  and  sent  proper  proofs  to  the  com- 
pany which  received  them  without  objection,  it  is  a  question 
for  a  jury  whether  there  is  a  reasonable  explanation  of  the  de- 
lay beyond  the  thirty  days  specified  in  the  policy. '^^  And  where 
the  insurer  fails  and  refuses  to  issue  a  policy  it  waives  its 
right  to  object  to  the  lateness  of  a  notice  sent  eleven  months 
after  a  loss.'^* 

A  benevolent  society,  whose  constitution  expressly  reserves 
to  the  society  the  right  to  expend  the  money  which  it  agrees  to 
pay  on  the  death  of  the  wife  of  a  member  towards  the  burial, 
is  not  liable,  -where  it  is  not  notified  of  the  death  of  the  wife 
until  after  the  funeral. '^^ 

Reasonable  Time. 

Notice  of  the  death  of  one  who  carried  life  and  accident  in- 
surance is  given  within  a  reasonable,  though  not  within  the 
time  limited  in  the  policy,  when  it  is  given  within  sixteen 
days  after  the  death  and  within  five  days  after  the  beneficiary 
first  learns  that  the  death  was  accidental,  even  though  the 
policy  specifically  requires  the  furnishing  of  notice  within 
ten  days  from  the  date  of  death — especially  when  the  general 

'-  Coventry  Mut.  Live  Stock  Ins.  Ass'n  v.  Evans,  102  Pa.  St.  281. 

"American  Cent.  Ins.  Co.  v.  Haws  (Pa.),  11  Atl.  107. 

'*Tayloe  v.  Merchants'  Fire  Ins.  Co.,  9  How.  (U.  S.)  390;  Baile  v. 
St.  Joseph  F.  &  M.  Ins.  Co.,  73  Mo.  387;  Walker  v.  Continental  Ins. 
Co.,  2  Utah,  335. 

'=•  Talbot  V.  Tipperary  Men  N.,  S.  &  B.  Ass'n,  23  Misc.  Rep.  486,  52 
N.  Y.  Supp.  633. 


§  171  TIME   TO   FURNISH    NOT   DEFINITE.  481 

agent  of  tlie  insurer  was  immediately  apprised  of  tlie  death, 
by  newspaper  accounts.'^® 

The  visit  of  an  adjuster  of  the  insurer  to  the  scene  of  a  fire 
the  day  after  a  loss  and  his  assurance  to  the  insured  that  no 
notice  or  proof  of  loss  need  be  furnished  is  sufficient  excuse 
for  failure  to  give  notice  or  proof  of  loss  within  fifty  days  after 
a  fire,  under  a  policy  requiring  notice  to  be  given  within  a 
reasonable  time.'^''^ 

The  Indiana  statute  (Rev.  St.  1881,  §  3770)  makes  void 
any  requirement  of  an  insurance  policy  that  notice  of  loss  must 
be  given  forthwith  or  within  less  than  five  days,  and  requires 
of  the  insured  only  reasonable  diligence  in  the  giving  of  tho 
notice.  Under  this  statute,  notice  given  within  fifteen  days 
is  given  within  a  reasonable  time.'^^  A  delay  of  fifty-three 
days  in  giving  notice  of  loss  to  the  insurer  cannot,  as  a  matter 
of  law,  be  held  unreasonable,  where  the  policy  was  in  a  safe 
in  the  destroyed  building ;  and  owing  to  the  confusion  existing 
among  the  papers  in  the  safe  when  it  was  opened,  the  policy 
was  misplaced  and  the  insured  did  not  know  and  was  unable 
to  obtain  information  respecting  the  identity  of  the  insurer, 
and  gave  notice  as  soon  as  he  found  the  policy.  "^^  An  unex- 
plained delay  of  fifty  days  has  been  held  unreasonable.^*^ 
And  four  months.^  ^     And  eleven  days.^^^    Under  exceptional 

"Peele  v.  Provident  Fund  Soc,  147  Ind.  543,  44  N.  E.  661;  Trippe 
V.  Provident  Fund  Soc,  HO  N.  Y.  23,  22  L.  R.  A.  432. 

"Phenix  Ins.  Co.  v.  Pickel,  3  Ind.  App.  332,  29  N.  E.  432. 

"  Germania  Fire  Ins.  Co.  v.  Deckard,  3  Ind.  App.  361,  28  N.  E.  868. 

■»  160  N.  Y.  595,  46  L.  R.  A.  682,  28  App.  Div.  213,  50  N.  Y.  Supp. 
922.  See  Oakland  Home  Ins.  Co.  v.  Davis  (Tex.  Civ.  App.),  33  S.  "W. 
587;  Konrad  v.  Union  Casualty  &  Surety  Co.,  49  La.  Ann.  636. 

•*"  Pickel  V.  Phenix  Ins.  Co.,  119  Ind.  291. 

"'McEvers  v.  Lawrence,  1  Hoff.  Ch.  (N.  Y.)  171. 

"»  Trask  v.  State  F.  &  M.  Ins.  Co.,  29  Pa.  St.  198. 
KERR,  INS.—  31 


482  NOTICE  AND  PROOFS  OF  LOSS.  §  I'J'l 

circiimstances  a  delay  of  six  months  may  not  be  unreason- 
able.82 

Forthwith. 

A  requirement  in  a  policy  that  notice  of  loss  m\ist  be  given 
forthwith  is  substantially  equivalent  to  a  requirement  that  it 
be  given  within  a  reasonable  time.^^  It  is  construed  liberally 
in  favor  of  the  insured.^ ^  The  use  of  a  phrase  requiring  the 
insured  to  "forthwith  give  notice  of  loss"  imposes  upon  the 
insured  nothing  more  than  due  diligence  under  all  the  circum- 
stances of  the  case.  In  ordinary  cases,  whether  or  not  due 
diligence  has  been  used  by  the  insured  or  w^hether  he  has  been 
guilty  of  procrastination  or  delay  is  usually  considered  a 
question  of  fact  to  be  determined  by  the  jury.^^  So  where  a 
fire  occurred  on  Eriday,  it  was  left  for  the  jury  to  say  whether 
a  notice  furnished  the  following  Wednesday  was  served 
in  proper  time.^^  And  under  various  circumstances  twelve 
days  has  been  held  a  reasonable  time  within  which  to  furnish 
notice  of  loss  under  a  policy  requiring  notice  to  be  given 

»^  Swan  V.  Liverpool,  L.  &  G.  Ins.  Co.,  52  Miss.  704. 

Where  proofs  were  forwarded  within  thirty  days,  it  was  held  that 
the  delay  was  not  so  unreasonable  as  to  preclude  the  submission  to 
the  jury  of  the  question  whether  the  policy  had  been  complied  with. 
Ben  Franklin  Fire  Ins.  Co.  v.  Flynn,  98  Pa.  St.  627.  See,  also,  Brink 
V.  Hanover  Fire  Ins.  Co.,  80  N.  Y.  108;  Provident  Life  Ins.  &  Inv.  Co. 
V.  Baumm,  29  Ind.  236. 

»'  Pennypacker  v.  Capital  Ins.  Co.,  80  Iowa,  56,  45  N.  W.  408. 

"  Central  City  Ins.  Co.  v.  Dates,  86  Ala.  559. 

"' Edwards  v.  Baltimore  Fire  Ins.  Co.,  3  Gill  (Md.),  176,  2  Ben- 
nett, Fire  Ins.  Cas.  405;  Donahue  v.  Windsor  Co.  Mut.  Fire  Ins.  Co., 
56  Vt.  374;  Phillips  v.  Protection  Ins.  Co.,  14  Mo.  220,  3  Bennett, 
Fire  Ins.  Cas.  204;  Springfield  F.  &  M.  Ins.  Co.  v.  Brown,  128  Pa.  St. 
392;  Roumage  v.  Mechanics'  Fire  Ins.  Co.,  13  N.  J.  Law,  110;  Con- 
tinental Ins.  Co.  V.  Lippold,  3  Neb.  391,  5  Bennett,  Fire  Ins.  Cas.  562. 

«»Inman  v.  Western  Fire  Ins.  Co..  12  Wend.  (N.  Y.)  461;  St.  Louis 
Ins.  Co.  V.  Kyle,  11  Mo.  278,  2  Bennett,  Fire  Ins.  Cas.  641;  Penny- 
packer  V.  Capital  Ins.  Co.,  80  Iowa,  56,  45  N.  W.  408. 


§  171  TIME    TO   FURNISH    NOT   DEFINITE.  483 

forthwith  ;^'^  and  twenty-three  days;^^  and  twenty-six  days;^^ 
and  four  days;^"  and  six  days;''^  and  eight  days.®^  In  Ben- 
nett V,  Lycoming  County  Mut.  Ins.  Co.,^^^  a  policy  required 
that  the  insured  should  forthwith  give  notice  to  the  secretary 
of  the  company.  Soon  after  the  policy  issued,  the  insured 
delivered  it  to  the  agent  of  the  company  for  an  indorsement 
of  its  consent  to  some  alterations  in  the  policy.  The  com- 
pany kept  and  cancelled  the  policy  without  notifying  the  in- 
sured. A  day  after  the  loss  notice  was  given  to  defendant's 
local  agents  and  its  general  agent  soon  afterwards  visited  the 
location  of  the  property  and  interviewed  the  insured  about 
the  loss.  The  policy  being  out  of  plaintiff's  possession  he  was 
not  aware  of  the  notice  required.  Upon  learning  the  condi- 
tion of  the  policy  he  furnished  proper  notice  upon  the  26th 
day  after  the  loss.  This  was  held  to  be  in  time.  Proofs 
furnished  two  months  after  the  fire  have  been,  under  excep- 
tional circumstances,  held  to  be  furnished  forthwith  j^^  and 
one  hundred  and  fifteen  days;^^  and  ninety  days.®** 

Not  Forthwith. 

Where  a  policy  required  notice  to  be  given  forthwith,  a 
notice  served  thirty-nine  days  after  the  loss  occurred  has  been 

"  Capitol  Ins.  Co.  v.  Wallace,  48  Kan.  400,  29  Pac.  755. 

^  Donahue  v,  Windsor  Co.  Mut.  Fire  Ins.  Co.,  56  Vt.  374. 

«» Bennett  v.  Lycoming  Co.  Mut.  Ins.  Co.,  67  N.  Y.  274. 

""  Griffey  v.  New  York  Cent.  Ins.  Co.,  100  N.  Y.  417. 

"Peppit  V.  North  British  &  M.  Ins.  Co.,  1  Russ.  &  G.  (N,  Scotia) 
219. 

**  New  York  Cent.  Ins.  Co.  v.  National  Protection  Ins.  Co.,  20  Barb. 
(N.  Y.)  468. 

•'»  67  N.  Y.  274. 

"  Harden  v.  Milwaukee  Mechanics'  Ins.  Co.,  164  Mass.  382,  25  Ins. 
Law  J.  124. 

"  Carpenter  v,  German  American  Ins.  Co.,  135  N.  Y.  298. 

■^  Home  Ins.  Co.  v.  Davis,  98  Pa.  St.  280. 


4  Si  NOTICE  AND   TROOFS   OF   LOSS.  §  171 

held  to  be  too  late;^^  and  seventeen  days  has  been  held  too 
late;^^  and  eleven  dajs;^^  and  thirty-eight  days;^^  and  four 
months  ;^°^  and  three  and  one-half  months  ;^°^  and  eighteen 
days  J ^^^  and  five  months.^"* 

Immediate  Notice. 

Where  a  policy  requires  immediate  notice  of  loss  and  fixes 
no  prescribed  time  within  which  they  must  be  served,  proofs 
may  be  furnished  within  a  reasonable  time.  A  statute  provid- 
ing that  proofs  of  loss  furnished  within  twenty  days  shall  be 
sufficient,  is  intended  for  the  protection  of  the  insured  and 
does  not  compel  the  furnishing  of  proofs  within  that  time. 
What  is  a  reasonable  time  is  to  be  ascertained  from  all  the 
facts  and  circumstances  of  the  case  in  the  light  of  all  the 
evidence  as  to  the  conduct  of  the  insurer  and  the  insured,  of 
their  negotiations  and  all  that  passed  between  them  respecting 
the  loss  and  the  time  and  manner  of  proving  it.  Where  the 
facts  and  circumstances  are  not  clearly  established  and  the 
evidence  as  to  them  is  conflicting,  the  question  is  for  the  jury 
under  proper  instructions  of  the  court. -^^^ 

"« McDermott  v.  Lycoming  Fire  Ins.  Co.,  12  Jones  &  S.  (N.  Y.)  221. 

"Brown  v.  London  Assur.  Corp.,  40  Hun  (N.  Y.),  101. 

»'  Trask  v.  State  F.  &  M,  Ins.  Co.,  29  Pa.  St.  198. 

°^Inman  v.  Western  Fire  Ins.  Co.,  12  Wend.  (N.  Y.)  452,  1  Ben- 
nett, Fire  Ins.  Cas.  457. 

i°»McEvers  v.  Lawrence,  1  Hofl.  Ch.  (N.  Y.)  172,  1  Bennett,  Fire 
Ins.  Cas.  467. 

"'  Baker  v.  German  Fire  Ins.  Co.,  124  Ind.  490,  24  N.  E.  1041. 

^°'  Edwards  v.  Lycoming  Co.  Mut.  Ins.  Co.,  75  Pa.  St.  378. 

"'Sherwood  v.  Agricultural  Ins.  Co.,  10  Hun  (N.  Y.),  593. 

"*  Springfield  F.  &  M.  Ins.  Co.  v.  Brown,  128  Pa.  St.  392;  Conti- 
nental Ins.  Co.  V.  Lippold,  3  Neb.  391,  5  Bennett,  Fire  Ins.  Cas. 
562;  McFarland  v.  United  States  Mut.  Ace.  Ass'n,  124  Mo.  204,  27 
S.  W.  436;  North  Pennsylvania  Fire  Ins.  Co.  v.  Susquehanna  Mut. 
Fire    Ins.    Co.,  2    Pears.   (Pa.)   291;    Lockwood    v.    Middlesex    Mut. 


§  171  TIME   TO    FUBNISH    NOT   DEFINITE.  485 

A  notice  mailed  to  the  insurer  October  1st  of  a  claim  of  the 
loss  of  an  eye  from  an  accident  occurring  September  1st,  is 
given  within  a  reasonable  time  where  it  appears  tliat  at  the 
time  of  the  accident  the  insured  did  not  re2:ard  it  as  danfferous 
and  was  not  convinced  that  he  would  lose  his  eve  until  some- 
time after  sending  the  notice.  ^°^  The  conditions  of  an  acci- 
dent policy  insuring  against  total  disability  or  death,  and  re- 
quiring immediate  proof  to  be  given  the  insurer  of  any  injury 
as  well  as  of  death  resulting  therefrom,  are  complied  with  by  a 
proof  served  within  a  reasonable  time  after  the  death  of  the 
insured  where  no  claim  is  made  for  disability. ^^^ 

Where  a  policy  of  accident  insurance  provides  that  in  case 
of  death  or  injury,  notice  of  claim  should  be  given  to  the  secre- 
tary of  the  company  "with  full  particulars  of  the  accident 
and  injury  immediately  after  the  accident  occurs,"  and  that 
"positive  proofs  of  death"  must  be  furnished  within  six 
months  of  the  date  of  the  accident,  and  the  insured  disappeared 
November  9th,  1892,  but  the  facts  concerning  his  death  which 
occurred  on  that  date  were  not  known,  nor  was  his  body  dis- 
covered till  April  19th,  1893,  the  furnishing  of  notice  of  death 
on  May  26th  and  proofs  July  12th  following,  show  a  reason- 
able compliance  with  the  terms  of  the  policy.  ^"^ 

Assur.  Co.,  47  Conn.  553;  Carey  v.  Farmers'  Ins.  Co.,  27  Or.  147,  40 
Pac.  91;  Lyon  v.  Railway  Passenger  Assur.  Co.,  46  Iowa,  631. 

Service  of  notice  of  loss  without  unnecessary  delay  is  a  sufl^cient 
compliance  with  the  requirement  of  a  policy  of  insurance  that  the 
insured  shall  give  "immediate"  notice  of  loss.  Solomon  v.  Conti- 
nental Fire  Ins.  Co.,  160  N.  Y.  595,  46  L.  R.  A.  682. 

'"'  People's  Ace.  Ass'n  v.  Smith,  126  Pa.  St.  317,  17  Atl.  605. 

"^McFarland  v.  United  States  Mut.  Ace.  Ass'n,  124  Mo.  204,  27. 
S.  W.  436.  But  see.  Foster  v.  Fidelity  &  Casualty  Co.,  99  Wis.  449, 
75  N.  W.  69;  Underwood  Veneer  Co.  v.  London  G.  &  A.  Co.,  100  Ws. 
378,  75  N.  W.  996. 

""Kentzler  v.  American  Mut.  Ace.  Ass'n,  88  Wis.  589,  60  N.  W. 
1002,  43  Am.  St.  Rep.  934;  Konrad  v.  Union  Casualty  &  Surety  Co., 
49  La.  Ann.  636. 


486  NOTICE    AND   PROOFS    OF    LOSS.  §  171 

No  notice  of  an  accident  or  injury  causing  deatli  need  be 
given  hj  the  beneficiary  until  tbe  death  occurs  where  the  policy 
provides  for  immediate  notice  in  the  event  of  any  accident 
or  injury  for  which  claim  shall  be  made,  "or  in  case  of  death 
resulting  therefrom/'  as  this  provides  for  two  notices  of  dif- 
ferent claims,  one  for  injury  not  resulting  in  death  and  the 
other  of  death.  ^°^ 

A  provision  in  a  policy  of  indemnity  against  liability  of 
the  insured  for  injuries  resulting  from  accidents  caused  by 
horses  and  vehicles  used  in  his  business  of  transpoiling  mer- 
chandise, that  the  insured  shall  "upon  the  occurrence  of  an 
accident,  and  also  upon  information  of  a  claim  on  account 
of  an  accident  give  immediate  notice  in  writing"  of  such  ac- 
cident or  claim,  does  not  require  the  insured  to  give  notice  of 
an  accident  caused  by  one  of  his  drivers,  until  he  has  actual 
notice  thereof.  He  is  not  chargeable  with  the  knowledge 
possessed  by  the  driver  at  and  after  the  accident,  because  the 
driver  is  in  no  sense  his  agent  for  the  purpose  of  giving  notice 
to  the  insurer.  ^''^ 

Notice  of  the  death  of  the  insured  in  an  accident  policy 
providing  for  immediate  notice  of  death  is  sufficient  if  given 
immediately  after  the  beneficiary  discovers  the  existence  of  the 
policy,  though  she  does  not  make  such  discovery  till  nearly 
two  months  after  the  death  of  the  insured.^^^ 

^'"  Western  C.  T.  Ass'n  v.  Smith,  56  U.  S.  App.  393,  85  Fed.  401,  40 
L.  R.  A.  653. 

"^Mandell  v.  Fidelity  &  Casualty  Co.,  170  Mass.  173,  49  N.  E.  110; 
Anoka  Lumber  Co.  v.  Fidelity  &  Casualty  Co.,  63  Minn.  286,  30  L.  R.  . 
A.  689.     See  contra,  Foster  v.  Fidelity  &  Casualty  Co.,  99  Wis.  449, 
75  N.  W.  69,  and    Underwood  Veneer  Co.  v.  London  G.  &  A.  Co.,  100 
W5s.  378,  75  N.  W.  996. 

""  Konrad  v.  Union  Casualty  &  Surety  Co.,  49  La.  Ann.  636,  21  So. 
721,  26  Ins.  Law  J.  536;  American  Ace.  Co.  v.  Card,  13  Ohio  C.  C. 
154;    Kentzler  v.  American  Mut.  Ace.  Ass'n,  88   Wis.  589,  60   N.  W. 


g  171  TIME   TO   FURNISH    NOT   DEFINITE.  487 

Under  an  employer's  liability  insurance  policy  providing 
tliat  the  assured  on  occurrence  of  an  accident  and  on  notice  of 
claim  on  account  tkereof  should  give  an  immediate  notice  of 
such  accident  or  claim  to  the  company,  assured  need  give  but 
one  notice  and  that  within  a  reasonable  time  after  claim  is 
made  on  account  of  an  accident. ^^^  So  under  the  vai-ying 
circumstances  and  evidence  of  each  case,  the  provisions  of  a 
policy  requiring  immediate  notice  have  been  held  complied 
with  by  giving  notice  in  four  days  after  a  fire;^^^  and  one 
day  ;^^^  and  ten  days  ;^^^  and  thirty-four  days  ;^^^  and  twenty- 
two  days;^^®  and  eighteen  daysj"^  and  five  days.^^^ 

Not  Immediate. 

An  unexcused  and  unexplained  delay  of  fourteen  days  in 
furnishing  proofs  of  loss  is  not  a  compliance  with  the  terms 
of  a  policy  requiring  immediate  notice  of  a  loss  ;"^  nor  is  sucli 

1002;  Peele  v.  Provident  Fund  Soc,  147  Ind.  543;  Coventry  Mut. 
Live  Stock  Ins.  Ass'n  v.  Evans,  102  Pa.  St.  281,  and  cases  supra. 

"'  Anoka  Lumber  Co.  v.  Fidelity  &  Casualty  Co.,  63  Minn.  286,  30 
L.  R.  A.  689.  See  Mandell  v.  Fidelity  &  Casualty  Co.,  170  Mass.  173, 
49  N.  E.  110;  Foster  v.  Fidelity  &  Casualty  Co.,  99  Wis.  449,  75  N.  W. 
69;  and  Underwood.  Veneer  Co.  v.  London  G.  &  A.  Co.,  100  Wis.  378. 
75  N.  W.  996. 

"■  Hoffecker  v.  New  Castle  Co.  Mut.  Ins.  Co.,  5  Houst.  (Del.)   101. 

"'  Hartford  Fire  Ins.  Co.  v.  Smith,  3  Colo.  422. 

'"McNally  v.  Phoenix  Ins.  Co.,  137  N.  Y.  389;  McFarland  v.  United 
States  Mut.  Ace.  Ass'n,  124  Mo.  204,  27  S.  W.  436. 

"••Knickerbocker  Ins.  Co.  v.  Gould,  80  111.  388;  Knickerbocker  Ins. 
Co.  V.  McGinnis,  87  111.  70. 

"'Niagara  Fire  Ins,  Co.  v.  Scammon,  100  111,  644;  Killips  v.  Put- 
nam Fire  Ins.  Co.,  28  Wis.  472. 

"' Wooddy  V.  Old  Dominion  Ins,  Co,,  31  Grat,  (Va.)  362, 

"'  Schenck  v,  Mercer  Co.  Mut.  Fire  Ins.  Co.,  24  N.  J.  Law,  447,  3 
Eennett,  Fire  Ins.  Cas,  712;  Hovey  v.  American  Mut,  Ins.  Co,,  2 
Duer  (N.  Y.),  554. 

"•  La  Force  v.  Williams  City  Fire  Ins,  Co.,  43  Mo.  App.  518. 


488    -  NOTICE   AND   PROOFS    OF   LOSS.  §  171 

delay  for  tliirtj-three  dajs;^^°  nor  nineteen  days;^"^  nor 
eleven  days;^^^  nor  sixty  days;^^^  nor  twenty-nine  days;^^^ 
nor  seventeen  days  ;^^^  nor  six  days  where  an  injury  for  wliick 
claim  was  made  happened  in  the  city  where  the  policy  was 
issued  and  where  the  insurer  had  a  resident  agent  and  no 
excuse  was  shown  for  the  delay.  ^^® 

As  Soon  as  Possible,  Due  Notice,  etc. 

Under  a  policy  providing  that  "all  persons  assured  by 
this  company  and  sustaining  loss  or  damage  by  lire  are  forth- 
with to  give  notice  thereof  to  the  company  and  as  soon  as 
possible  to  deliver  in  a  particular  account  of  such  loss  or 
damage/'  where  notice  of  loss  is  given  immediately,  a  delay 
of  nineteen  days  in  furnishing  a  particular  account  of  loss 
is  not  unreasonable.  ^^^ 

"■^  Quinlan  v.  Providence  W.  Ins.  Co.,  133  N.  Y,  357. 

^  Weed  V.  Hamburg-Bremen  Fire  Ins.  Co.,  133  N.  Y.  394. 

^  Trask  v.  State  F.  &  M.  Ins.  Co.,  29  Pa.  St,  198. 

^'  Ermentrout  v.  Girard  F.  &  M.  Ins.  Co.,  63  Minn.  305,  30  L.  R.  A. 
346. 

^^  Foster  v.  Fidelity  &  Casualty  Co.,  99  Wis.  447,  40  L.  R.  A.  833, 
75  N.  W.  69. 

»'=  Burnham  v.  Royal  Ins.  Co.,  75  Mo.  App.  394,  27  Ins.  Law  J.  928. 

^-'^  Railway  Passenger  Assur.  Co.  v.  Burwell,  44  Ind.  460. 

"'Wightman  v.  Western  M.  &  F.  Ins.  Co.,  8  Rob.  (La.)  442;  Home 
Ins.  Co.  V.  Davis,  98  Pa.  St.  280  (90  days);  Carpenter  v.  German 
American  Ins.  Co.,  135  N.  Y.  298  (115  days);  Hamden  v.  Milwaukee 
Mechanics'  Ins.  Co.,  164  Mass.  382,  25  Ins.  Law  J.  124  (two  months) ; 
Central  City  Ins.  Co.  v.  Gates,  86  Ala.  558;  Palmer  v.  St.  Paul  F.  & 
M.  Ins.  Co.,  44  Wis.  201  (four  months  held  not  unreasonable);  Ed- 
wai-ds  v.  Baltimore  Fire  Ins.  Co.,  3  Gill  (Md.),  176,  2  Bennett,  Fire 
Ins.  Cas.  405. 

In  Home  Ins.  Co.  v.  Davis,  supra,  insured  was  required,  as  soon 
as  possible  after  loss,  to  tender  a  particular  account.  The  prelim- 
inary notice  was  given,  and  a  month  later  a  special  agent  inspected 
the  ruins,  and  obtained  from  the  insured  a  statement  of  his  loss 
under  oath.  A  month  afterward,  at  the  instance  of  the  company, 
criminal  proceedings  were  begun  against  him  on  the  charge  of  hav- 


R  171  TIME   TO   FURNISH    NOT   DEFINITE.  489 

In  an  action  upon  a  life  policy  wliicli  required  notice  of 
death  to  be  given  to  the  company  or  its  agent  "as  soon  there- 
after as  possible,"  it  was  proved  that  the  insured  died  at  a 
place  from  which  notice  of  the  death  could  be  sent  to  the 
company  in  one  day.  It  was  further  proved  that  the  policy 
was  in  the  trunk  of  A.  in  the  city  where  the  company's 
office  was  located,  and  that  the  party  to  whom  the  insurance 
was  to  be  paid  never  had  possession  of  and  never  saw  the 
policy  until  eight  or  ten  days  after  the  death  of  the  insured, 
when  he  immediately  notified  the  company  of  the  death.  The 
company  then  handed  him  a  blank  affidavit  in  regard  to  the 
death,  and  stated  that  it  would  be  sufficient  if  he  returned 
the  same  within  three  or  four  weeks,  which  he  did.  The 
court  held,  that  the  company  received  notice  within  a  reason- 
able time,  and  said:  "The  agreement  on  the  part  of  the 
assured,  that  in  the  event  of  his  death,  his  legal  representa- 
tives should,  as  soon  as  possible  thereafter,  give  notice  in 
writing  to  the  company,  must  have  a  reasonable  construction. 
Thus,  the  law  in  this  state  does  not   authorize  letters  of 

ing  caused  the  fire.  These  resulted  in  favor  of  the  insured.  Three 
months  after  loss,  proofs  were  forwarded.  These  were  returned  as 
unsatisfactory,  and  proper  blanks  were  sent,  which  he  was  requested 
to  fill  out  and  transmit.  He  complied,  and  received  notice  of  the  re- 
ceipt of  the  corrected  proofs.  Held,  that  the  proofs  were  made  as 
soon  as  possible  after  the  loss.    Three  judges  dissented. 

And  see  McPike  v.  Western  Assur.  Co.,  61  Miss.  37  (where  two 
months  was  held  an  unreasonable  time).  See,  also,  for  similar  con- 
ditions. Brink  v.  Hanover  Fire  Ins.  Co.,  80  N.  Y.  108;  Scammon  v. 
Germania  Ins.  Co.,  101  111.  621;  Provident  Life  Ins.  &  Inv.  Co.  v. 
Baum,  29  Ind.  236;  Cornell  v.  Le  Roy,  9  Wend.  (N.  Y.)  163;  Trav- 
elers' Ins.  Co.  v.  Sheppard,  85  Ga.  751;  Jackson  v.  Southern  M.ut. 
Life  Ins.  Co.,  36  Ga.  429;  Davis  v.  Davis,  49  Me.  282;  American 
Surety  Co.  v.  Pauly,  170  U.  S.  133,  42  L.  Ed.  977;  Konrad  v.  Union 
Casualty  &  Surety  Co.,  49  La.  Ann.  636;  Rodee  v.  Detroit  F.  &  M. 
Ins.  Co.,  74  Hun  (N.  Y.),  146;  American  Credit  Ind.  Co.  v.  Wood,  38 
U.  S.  App.  585,  19  C.  C.  A.  273;  California  Sav.  Bank  of  San  Diego  v. 
American  Surety  Co.,  87  Fed.  119. 


490  NOTICE   AND   PROOFS   OF   LOSS.  §  172 

administration  to  issue  until  fifteen  days  after  tlie  death  of 
an  intestate,  and  it  can  hardlv  be  insisted  that  a  notice  given 
in  this  state  within  that  time  is  unreasonably  delayed.  The 
law  as  stated  in  Angell  on  Fire  and  Life  Insurance,  is  that 
^there  must  be  no  unnecessaiy  delay,  nothing  which  the  law 
calls  laches/  Section  230.  *  *  *  ^The  terms  "forth- 
with" *  *  *  and  "as  soon  as  possible,"  are  not  to  be 
taken  literally,  but  mean  with  due  diligence,  or  without  un- 
necessary procrastination  or  delay,  under  all  the  circumstances 
of  the  case."^^* 

FoKM  AND  Contents. 

§  172.  A  substantial  compliance  with  the  requirements  of  a 
policy  as  to  the  form  and  contents  of  the  notice  and  proofs  ot 
loss  is  sufiacient,  unless  other  and  further  information  is  de- 
manded. 

General  Rule.  ' 

No  particular  form  or  kind  of  notice  or  proof  can  be  in- 
sisted upon  by  the  insurer  unless  according  to  the  stipulations 
of  the  policy.  The  form  of  the  notice  is  usually  immaterial 
if  it  states  the  facts  required  to  be  made  known.  If  knowl- 
edge of  the  fire  or  accident  or  death  be  in  fact  communicated 
to  the  insurer,  the  courts  will  not  be  particular  as  to  the  form 
in  which  it  is  done  nor  by  whom  or  how  notice  is  given.  A 
verbal  notice  is  sufficient  if  no  other  be  stipulated  for.  Neither 
notice  nor  proofs  need  contain  more  than  is  specifically  re- 
quired. ^^^     But  if  the  policy  be  clear  and  explicit  in  its 

j;3  Provident  Life  Ins.  &  Inv.  Co.  v.  Baum,  29  Ind.  236. 

i-'Killips  V.  Putnam  Fire  Ins.  Co.,  28  Wis.  f72;  Erwin  v.  Spring- 
field F.  &  M.  Ins.  Co.,  24  Mo.  App.  145 ;  State  Ins.  Co.  v.  Maackens,  3S 
N.  J.  Law,  564;  Roumage  v.  Mechanics'  Fire  Ins.  Co.,  13  N.  J.  Law, 
110;  Walker  v.  Metropolitan  Ins.  Co.,  56  Me.  371;  Good  v.  Georgia 
Home  Ins.  Co.,  92  Va.  392,  23  S.  E.  744;  Georgia  Home  Ins.  Co.  v. 
Goode,  95  Va.  751,  30  S.  E.  366;    McFarland  v.  United  States    Mut. 


I  172  FOKM   AND   CONTENTS. 


491 


requirements  either  as  to  foi-m,  or  contents,  or  nature  of  notice 
or  proof,  full  and  complete  compliance  with  all  the  conditions 
is  necessary  unless  waived  by  the  insurer. ^^*^     Thus,  under  a 

Ace.  Ass'n,  124  Mo.  204,  27  S.  W.  436;  Rix  v.  Mutual  Ins.  Co.,  20 
N.  H.  198;  Buffalo  L.,  T.  &  S.  Deposit  Co.  v.  Knights  Templar  &  M. 
Mut.  Aid  Ass'n,  126  N.  Y.  450;  Braker  v.  Connecticut  Ind.  Ass'n,  27 
App.  Div.  234,  50  N.  Y.  Supp.  547;  Walsh  v.  Washington  Marine  Ins. 
Co.,  32  N.  Y.  427;  O'Reilly  v.  Guardian  Mut.  Life  Ins.  Co.,  60  N.  Y. 
169;  Miller. V.  Hartford  Fire  Ins.  Co.,  70  Iowa,  704,  29  N.  W,  412; 
Kahn  v.  Traders'  Ins.  Co.,  4  Wyo.  419,  34  Pac.  1059;  Northwestern 
Ins.  Co.  V.  Atkins,  3  Bush  (Ky.),  333;  Hibernia  Mut.  Fire  Ins.  Co. 
V.  Meyer,  39  N.  J.  Law,  482. 

In  Norton  v.  Rensselaer  &  S.  Ins.  Co.,  7  Cow.  (N.  Y.)  645,  1  Ben- 
nett, Fire  Ins.  Cas.  204,  the  court  said:  "Undoubtedly,  these  [the 
notice  and  certificate]  must  be  furnished,  according  to  the  policy,  a 
certain  number  or  days  before  an  action  can  be  brought;  but  it  is 
another  question  what  they  should  contain.  The  clause  requiring 
proof  of  loss  in  marine  policies  has  been  construed  with  consider- 
able liberality.  The  court  have  looked  to  circumstances  and  re- 
quired no  more  information  of  the  party  than  what  appeared  to  be 
within  his  control.  In  Lawrence  v.  Ocean  Ins.  Co.,  11  Johns.  (N.  Y.) 
260,  Thompson,  J.,  in  delivering  the  opinion  of  the  court,  says  the 
clause  'requires  only  reasonable  information  to  be  given  to  the  un- 
derwriters; so  that  they  can  be  enabled  to  form  some  estimate  of 
their  rights  and  duties  before  they  are  obliged  to  pay.  This  clause 
has  always  been  liberally  expounded,  and  is  construed  to  require 
only^the  best  evidence  of  the  fact  which  the  party  possesses  at  the 
time.'  *  *  *  The  clause  itself  in  the  policy  before  us  expressly 
contemplates  the  latitude  arising  from  circumstances." 

In  Martin  v.  Manufacturers'  Ace.  Ind.  Co.,  151  N.  Y.  95,  th6  policy 
loquired  immediate  notice  to  be  given,  containing  specific  particu- 
lars, and  provided  that  failure  to  give  such  immediate  notice  shall 
invalidate  all  claims.  The  court  held  that  the  forfeiture  clause  ap- 
plied only  to  the  time,  and  not  to  the  form  of  notice,  and  said:  "It 
would  be  a  very  harsh  and  unreasonable  construction  to  apply  this 
[forfeiture]  clause  to  every  imperfection  in  a  notice  which,  although 
promptly  given,  omitted  to  state  some  particular.  *  *  *  The  com- 
pany could  have  demanded  further  particulars,  but  having  omitted 
to  do  so,  it  waived  any  objection  to  the  form  or  contents  of  the  no- 
tice." 

""Welsh  V.  Des  Moines  Ins.  Co.,  71  Iowa,  337,  32  N.  W.  369;  Brock 
V.  Des  Moines  Ins.  Co.,  96  Iowa,  39,  64  N.  W.  685;   Heusingveld  v. 


492  NOTICE   AND   PEOOFS   OF   LOSS.  §  172 

policy  providing  that  in  case  of  loss  insured  should  state 
under  oath  that  the  property  was  contained  in  the  building  or 
premises  described  in  the  policy,  the  neglect  to  make  such 
statement  has  been  held  to  defeat  a  recovery.  ^^^  When  no 
question  of  waiver  is  involved,  the  sufficiency  of  proofs  must 
be  determined  as  a  matter  of  law  by  the  court.  ^^^  All  the 
insurer  can  ask  for  in  proofs  is  definite,  unequivocal  informa- 
tion, and  a  compliance  vsdth  the  conditions  designed  to  pro- 
tect it  from  fraud  and  imposition.  The  form  in  which  they 
are  made  cannot  be  regarded  as  important. -^^^  Proofs  need 
contain  only  what  is  specifically  required  by  the  terms  of  the 
policy.  A  statement  of  any  other  facts  is  surplusage  and  a 
misrecital  concerning  the  same  is  immaterial. -^^^     They  are 

St.  Paul  P.  &  M.  Ins.  Co.,  96  Iowa,  224,  64  N.  W.  769;  Langan  v. 
Royal  Ins.  Co.,  162  Pa.  St.  357;  Jones  v.  Mechanics'  Fire  Ins.  Co.,  36 
N.  J.  Law,  29;  Nixon  v.  Queen  Ins.  Co.,  23  Can.  Sup.  Ct.  26;  Shaw- 
nut  Sugar  Refining  Co.  v.  Peoples'  Mut.  Fire  Ins.  Co.,  12  Gray 
(Mass.),  535;  Simons  v.  Iowa  State  T.  M.  Ass'n,  102  Iowa,  267,  71 
N.  W.  254;  O'Reilly  v.  Guardian  Mut.  Life  Ins.  Co.,  60  N.  Y.  173; 
Heywood  v.  Maine  Mut.  Ace.  Ass'n,  85  Me.  289;  Daniels  v.  Equitable 
Fire  Ins.  Co.,  50  Conn.  551;  Fink  v.  Lancashire  Ins.  Co.,  60  Mo.  App. 
G73;  Hartford  Fire  Ins.  Co.  v.  Smith,  3  Colo.  422;  Summerfleld  v. 
Phoenix  Assur.  Co.,  65  Fed.  292;  Connell  v.  Milwaukee  Mut.  Fire  Ins. 
Co  ,  18  Wis.  387;  Wellcome  v.  Peoples'  Equitable  Mut.  Fire  Ins.  Co., 
2  Gray  (Mass.),  481;  Stephenson  v.  Bankers'  Life  Ass'n,  108  Iowa, 
637,  79  N.  W.  461, 

"^  Harris  v.  Royal  Canadian  Ins.  Co.,  53  Iowa,  236. 

"=  Gauche  v.  London  &  L.  Ins.  Co.,  10  Fed.  347. 

"'  Erwin  v.  Springfield  F.  &  M.  Ins.  Co.,  24  Mo.  App.  145.  In  this 
■cas6)  it  was  held  that  a  condition  which  provides  for  a  statement  as 
to  other  insurance,  if  any,  and  the  giving  of  the  written  portions  of 
the  policy,  does  not  require  an  affirmative  averment  that  there  was 
no  other  insurance,  for  such  would  be  the  presumption.  See,  also, 
Hinckley  v.  Germania  Fire  Ins.  Co.,  140  Mass.  38;  Clement  v.  Brit- 
ish American  Assur.  Co.,  141  Mass.  298;  Taylor  v.  Aetna  Ins.  Co., 
120  Mass.  254;  Fowle  v.  Springfield  F.  &  M.  Ins.  Co.,  122  Mass.  191; 
Smith  V.  Commonwealth  Ins.  Co.,  49  Wis.  322;  Charter  Oak  Life  Ins. 
€o.  V.  Rodel,  95  U.  S.  232. 

"*  Walker  v.  Metropolitan  Ins.  Co.,  56  Me.  371;  Rix  v.  Mutual  Ins. 


§  172  FORM    AND   CONTENTS.  493 

sufficient  if  tliey  sliow  on  tlieir  face  an  honest  effort  on  the 
part  of  the  insured  to  comply  with  the  requirements  of  the 
policy.^^^  Where  the  insured  furnishes  two  accounts  of  loss 
and  two  certificates  of  a  magistrate,  these  are  to  be  construed 
together  in  determining  what  proofs  of  loss  are  served. ^^^ 

The  affidavit,  whether  of  an  insane  man  or  not,  is  sufficient 
as  to  the  information  which  it  conveys  of  the  time  and  nature 
of  the  amount  of  the  loss  covered  by  the  policy.^^^  A  verbal 
notice  of  loss  given  by  the  insured  to  the  local  agent  of  the 
insurer,  and  by  the  latter  at  the  request  of  the  former  com- 
municated in  writing  to  the  company,  is  a  sufficient  compli- 
ance with  the  terms  of  the  policy  requiring  notice  to  be  given 
to  the  insurer  in  writing  at  its  home  office,  without  specifying 
the  form  or  contents  of  the  notice,  where  the  insurer  makes  no  - 
objection  on  account  of  the  form  of  the  notice  thus  given  and 
makes  no  demand  for  other  and  further  proof. ^^^ 

Co.,  20  N.  H.  198;  Walsh  v.  Washington  Marine  Ins.  Co.,  32  N.  Y. 
427;  O'Reilly  v.  Guardian  Mut.  Life  Ins.  Co.,  60  N.  Y.  169;  Miller  v. 
Hartford  Fire  Ins.  Co.,  70  Iowa,  704,  29  N.  W.  412, 

"^  Home  Fire  Ins.  Co.  v.  Hammang,  44  Neb.  566,  62  N.  W,  883;  Wy- 
n-'an  v.  Peoples'  Equity  Ins.  Co.,  1  Allen  (Mass.),  301;  Harkins  v, 
Quincy  Mut.  Fire  Ins.  Co.,  16  Gray  (Mass.),  591;  Boyle  v.  Hamburg- 
Bremen  Fire  Ins.  Co.,  169  Pa.  St.  349. 

•=«  Brown  v.  Hartford  Fire  Ins.  Co.,  52  Hun  (N.  Y.),  260;  Parks  v. 
Anchor  Mut.  Fire  Ins.  Co.,  106  Iowa,  402,  76  N.  W.  743. 

"^  Germania  Fire  Ins.  Co.  v.  Boykin,  12  Wall.  (U.  S.)  433,  20  L.  Ed. 
442. 

"*Phenix  Ins.  Co.  v.  Rad  Bila  Hora  Lodge,  41  Neb.  21,  59  N.  W. 
752;  Coffman  v.  Niagara  Fire  Ins.  Co.,  57  Mo.  App.  647;  Roumage 
V.  Mechanics'  Fire  Ins.  Co.,  13  N.  J.  Law,  110,  1  Bennett,  Fire  Ins. 
Cas.  389;  Kahn  v.  Traders'  Ins.  Co.,  4  Wyo.  419,  34  Pac.  1059;  O'Con- 
nor V.  Hartford  Fire  Ins.  Co.,  31  Wis.  160;  Hibernia  Mut.  Fire  Ins. 
Co.  V.  Meyer,  39  N.  J.  Law,  482;  Travellers'  Ins.  Co.  v.  Edwards,  122 
U.  S.  466,  7  Sup.  Ct.  1252;  Edwards  v.  Travelers'  Life  Ins.  Co.,  20 
Fed.  661;  Watertown  Fire  Ins.  Co.  v.  Grover  &  B.  Sewing  Machine 
Co.,  41  Mich.  131,  1  N.  W.  961. 

In  Kahn  v.  Traders'  Ins.  Co.,  supra,  the  court  said:   "There  is  no 


494:  NOTICE    AND   PROOFS   OF   LOSS.  §  172 

The  provisions  of  a  policy  requiring  the  insured  to  state 
in  liis  proofs  of  loss  liis  interest  and  title,  mean  his  interest 
and  title  at  the  time  of  the  loss.  A  statement  in  proofs  that 
the  oriffin  and  cause  of  the  fire  are  unknown  to  the  insured 
is  sufficient,  (unless  the  assured  was  the  incendiaiy)  ^^^  and 
it  need  not  state  that  the  loss  did  not  occur  by  design,  in- 
vasion, public  enemy,  etc.^^"  But  a  provision  that  the  in- 
surance shall  not  be  payable  until  the  insured  shall  have  de- 
livered to  the  company  a  particular  account  in  writing  under 
oath  stating  the  nature  and  value  of  his  interest,  makes  the 
rendition  of  an  account  truly  stating  those  matters  and  facts 
imperative. ^^^  The^  failure  of  an  insured  to  state  in  his 
proofs  of  loss  the  name  of  the  occupant  of  the  building  at 
the  time  of  the  fire,  as  required  by  the  policy,  is  not  fatal  to 
his  right  to  recover,  where  the  loss  w^as  afterwards  investigated 
by  the  company  and  no  prejudice  to  the  latter  shown.^^^ 

A  requirement  that  the  insured  shall  in  case  of  fire  separate 
the  damaged  and  undamaged  personal  property  and  make  a 
complete  inventory  thereof,  does  not  compel  the  making  of 
an  inventory  of  property  which  is  totally  destroyed. ^^^ 

If  the  insured  has  no  definite  knowledge  or  information 

force  in  the  objection  that  the  company  did  not  have  sufficient  no- 
lice  of  the  loss.  They  had  such  notice  as  induced  them  to  send  their 
general  agent  to  the  place  to  investigate  the  loss.  Any  notice  that 
produces  such  a  result  is  sufficient  without  reference  to  its  form  or 
particulars.  There  is  no  question  that  notice  was  promptly  given  to 
rhe  local  agents;  and  that,  under  the  circumstances,  must  suffice." 

'^'  Jones  V.  Howard  Ins.  Co.,  117  N.  Y.  103. 

^^'Catlin  v.  Springfield  Fire  Ins.  Co.,  1  Sumn,  434,  Fed.  Cas.  No. 
2,522,  1  Bennett,  Fire  Ins.  Cas.  436. 

'"Wellcome  v.  Peoples'  Equitable  Mut.  Fire  Ins.  Co.,  2  Gray 
(Mass.),  481. 

i<=  Commercial  Union  Assur.  Co.  v.  Meyer,  9  Tex.  Civ.  App.  7,  29 
S.  W.  93. 

'^  Johnston  v.  Farmers'  Fire  Ins.  Co.,  106  Mich.  96,  64  N.  W.  5. 


§  172  FORM   AND   CONTENTS.  495 

as  to  the  origin  or  circumstances  of  tlie  fire,  tlie  provisions 
of  a  policy  requiring  the  insured  to  state  in  his  proofs  of  loss 
such  knowledge  or  information  as  he  can  obtain  concerning 
the  origin  and  circumstances  of  the  fire  are  sufficiently  com- 
plied ^^ith  by  a  statement  that  the  building  was  totally  de- 
stroyed; that  the  fire  occurred  at  a  specified  time  and  did 
not  originate  by  any  act  or  procurement  on  the  part  of  the 
insured,  or  in  consequence  of  his  fraud;  and  that  the  in- 
sured had  not  done  or  consented  to  the  doing  of  anything 
violative  of  the  provisions  of  the  policy  or  which  would 
render  it  void.^^^  And  the  provisions  of  an  accident  in- 
surance policy  requiring  immediate  notice  of  injury  or  death 
of  the  insured  to  be  given  in  writing  is  complied  vdth.  by  a 
letter,  advising  the  company  of  the  death  of  the  insured,  and 
requesting  it  to  notify  the  writer  if  further  proofs  were  re- 
quired. ^^^ 

A  written  notice  to  an  insurance  company  of  a  loss  under 
its  policy,  accompanied  by  an  affidavit  stating  that  the  origin 
of  the  fire  is  unknown  to  the  insured,  and  that  the  loss  is 
total,  entire,  and  complete,  satisfies  the  provisions  in  the 
policy  requiring  "satisfactory  proofs"  of  loss,  as  well  as  the 
requirement  of  Iowa  Code,  §  1742,  that  notice  in  writing 
must  be  given  to  the  company  of  the  loss,  accompanied  by  an 
affidavit  stating  how  the  loss  occurred,  so  far  as  kno\^^l,  and 

"^  McNally  v.  Phoenix  Ins.  Co.,  137  N.  Y.  389. 

1"  McFarland  v.  United  States  Mut.  Ace.  Ass'n,  124  Mo.  204,  27  S.  W. 
436.  In  this  case  the  court  said:  "Notice  of  an  accidental  injury  is 
required  to  give  the  full  name,  occupation,  and  address  of  the  mem- 
ber, with  full  particulars  of  the  accident  and  Injury,  but,  in  the  case 
of  death,  immediate  notice  thereof  'in  like  manner'  only  is  required. 
The  words  in  'like  manner'  refer,  evidently,  to  the  method  of  giv- 
ing the  notice,  and  not  to  the  information  required  to  be  given 
thereby.  It  was  only  necessary  to  give  such  notice  as  would  advise 
the  asociation  that  death  had  occurred  from  accidental  injury." 


496  NOTICE    AND   PKOOFS    OF   LOSS.  §  172"' 

tlie  extent  of  tlie  loss.^'*^     And  the  notice  and  affidavit  may 
be  furnished  separately  witliin  the  prescribed  time.^'*'^ 

The  phrase  "proof  of  death"  of  the  insured  does  not  mean, 
proof  as  to  the  cause  of  the  death,  nor  does  it  contemplate 
the  furnishing  of  a  physician's  certificate.^^^  The  condi- 
tions of  a  policy  requiring  a  statement  in  proofs  of  loss  as 
to  other  insurance  on  the  property  destroyed  do  not  neces- 
sitate the  statement  that  there  was  no  other  insurance;  a 
provision  requiring  a  certificate  from  a  magistrate  not  next 
of  kin  to  the  insured  does  not  require  a  statement  in  the 
proofs  to  that  effect,  but  such  must  be  the  fact.  But  a 
provision  requiring  a  statement  as  to  the  ownership  of  the 
property  and  the  interest  of  the  insured  therein  must  be  spe- 
cifically comj^lied  with,  unless  waived  by  the  insurer. -^^^ 

Copies  of  Instruments. 

A  pro^^sion  of  a  policy  that  in  case  of  loss  the  insured 
shall  furnish  a  statement  of  other  insurance  and  copies  of  all 
policies  upon  the  property  does  not  require  the  insured  to 
furnish  a  coj)y  of  the  policy  sued  on,  nor  does  it  require  a 
literally  exact  copy  of  other  policies,  but  is  complied  with  by 
furnishing  copies  which  are  substantially  correct.  And  an 
erroneous  statement  in  the  copy,  if  not  prejudicial  to  the 
insurer,  is  immaterial,  nor  is  a  copy  of  the  application  for 
insurance  necessary.  ^^*^ 

A  requirement  in  an  insurance  policy,  that  proofs  of  loss 

1"  Parks  V.  Anchor  Mut.  Fire  Ins.  Co.,  106  Iowa,  402,  76  N.  W.  743. 

"'  Russell  V.  Fidelity  Fire  Ins.  Co.,  84  Iowa,  93,  50  N.  W.  546. 

"'  Buffalo  L.  T.  &  S.  Deposit  Co.  v.  Knights  Templar  &  M.  Mut.  Aid 
Ass'n,  126  N.  Y.  450;  "Western  C.  T.  Ass'n  v.  Smith,  56  U.  S.  App.  393, 
85  Fed.  401.  See  Simons  v.  Iowa  State  T.  M.  Ass'n,  102  Iowa,  267,. 
71  N.  W.  254. 

^^  Erwin  v.  Springfield  F.  &  M.  Ins.  Co.,  24  Mo.  App.  145. 

^"'  Miller  v.  Hartford  Fire  Ins.  Co.,  70  Iowa,  704,  29  N.  W.  411. 


§  172  FORM   AND   CONTENTS.  497 

furnished  thereunder  shall  contain  a  copy  of  the  description 
and  schedules  in  other  policies  on  the  property  insured,  is 
sufficiently  complied  with  by  giving  a  list  of  all  such  policies 
containing  the  names  of  the  companies  which  respectively 
issued  them,  their  respective  amounts,  and  dates  of  expira- 
tion, and  offering  to  furnish  copies  of  all  the  written  parts  of 
such  policies  on  demand.  ^^^ 

Several  Insurers. 

The  provision  in  a  policy  requiring  the  insured  to  furnish 
a  full  and  detailed  statement  of  the  loss  and  the  amount 
claimed  does  not  require  that  the  insured  shall  attempt  to 
compute  or  state  the  share  of  loss  to  be  borne  by  each  insurer 
where  there  are  several  insurers  who  are  liable.  ^^^ 

Two  Fires  and  One  Policy. 

When  goods  in  two  separate  buildings  are  covered  by  one 
policy  and  made  distinct  subjects  of  insurance,  the  proofs 
of  loss  in  case  of  fire  should  state  the  damage  to  the  goods 
in  each  building  separately. -^^^ 

Satisfactory  Proof. 

Where  the  statute  states  what  proofs  of  loss  must  contain, 
and  a  policy  in  terms  requires  "satisfactory  proof,"  these 
words  must  refer  to  and  be  held  to  mean  what  the  statute 
requires.^^^  The  term  "satisfactory  proof,"  used  as  descrip- 
tive of  the  nature  of  the  proof  to  be  furnished,  means  such 
proof  as  establishes  the  fact  of  the  loss  and  the  right  of  the 

»»i  Scottish  U.  &  N.  Ins.  Co.  v.  Keene,  85  Md.  264,  37  Atl.  33.    See,, 
also,  Towne   v.   Springfield   F.  &  M.  Ins.   Co.,  145   Mass.  582;    West 
Branch  Lumberman's  Exchange  v.  American  Cent.  Ins.  Co.,  183  Pa. 
St.  366. 

"'  Fuller  V.  Detroit  F.  &  M.  Ins.  Co.,  36  Fed.  469,  1  L.  R.  A.  801. 

"'  Towne  v.  Springfield  F.  &  M.  Ins.  Co.,  145  Mass.  582. 

'"  Parks  V.  Anchor  Mut  Fire  Ins.  Co.,  106  Iowa,  402,  76  N.  W.  743. 

KERR,  INS.— 32 


498  NOTICE   AND   PROOFS  ^0F   LOSS.  §  1T2 

claimant  to  recover.  The  insurer  cannot  demand  more  than 
is  reasonable  and  just;^^^  and  if  not  satisfied  it  should  call  for 
and  demand  other  and  further  proofs. ^^® 

A  life  insurance  company  whose  policy  provides  for  the 
payment  of  indemnity  within  ninety  days  after  the  receipt 
of  satisfactory  proofs  of  the  death  of  the  insured  cannot,  after 
the  insured's  death,  impose  additional  requirements  in  re- 
spect to  the  proofs  of  loss,  as,  for  instance,  the  requirement 
that  the  claimant  shall  make  affidavit  stating  whether  he 
makes  the  claim  as  beneficiary  named  in  the  policy,  or  as 
assignee.  ^^^ 

A  condition  of  a  policy  that  proofs  "satisfactory  to  the 
directors"  of  the  insurer  shall  be  furnished  together  with 
such  other  information  as  the  "directors  may  think  neces- 
sary to  establish  the  claim"  only  necessitates  the  furnishing 
of  reasonably  full  and  accurate  proofs,  and  the  directors  can 
not  arbitrarily  demand  any  proof  they  may  desire.  ^^® 

Partictilar  Account  —  Inventory  as  Part  of  Proofs. 

The  insured  must,  when  required  by  the  policy,  furnish 
du];-)licate  or  certified  copies  of  bills  of  articles  contained  in 
his  statement  of  loss,  and  a  failure  so  to  do  prevents  recovery 

^^  Walsh  V.  Washington  Marine  Ins.  Co.,  32  N.  Y.  427;  Buffalo  L. 
T.  &  S.  Deposit  Co.  v.  Knights  Templar  &  M.  Mut.  Aid  Ass'n,  126 
N.  Y.  450;  Flynn  v.  Massachusetts  Ben.  Ass'n,  152  Mass.  288;  Taylor 
V.  Aetna  Life  Ins.  Co.,  13  Gray  (Mass.),  434. 

is'Fowle  V.  Springfield  F.  &  M.  Ins.  Co.,  122  Mass.  191. 

«■  Braker  v.  Connecticut  Ind.  Ass'n,  27  App.  Div.  234,  50  N.  Y. 
Supp.  547. 

i'»  Braunstein  v.  Accidental  Death  Ins.  Co.,  1  Best  &  S.  782;  Taylor 
V.  Aetna  Life  Ins.  Co.,  13  Gray  (Mass.),  438  (due  proof).  But  "due 
notice  of  an  accident"  means  a  notice  both  of  the  accident  and  the 
cause  of  it.  Simons  v.  Iowa  State  T.  M.  Ass'n,  102  Iowa,  267,  71 
N.  W.  254.  But  see  Buffalo  L.  T.  &  S.  Deposit  Co.  v.  Knights  Templar 
&  M.  Mut.  Aid  Ass'n,  126  N.  Y.  450;  Western  C.  T.  Ass'n  v.  Smith, 
56  U.  S.  App.  393,  85  Fed.  401. 


§  172  FORM   AND    CONTENTS.  499 

on  the  policy  unless  it  be  shown  that  the  insured  has  made 
proper  efforts  to  obtain  them  and  was  unable  to  obtain  the 
duplicate  bills  required  by  the  insurer. ^^^ 

Failure  to  furnish  plans  and  specifications  of  a  building 
destroyed  by  fire  will  not  prevent  recovery  for  insurance, 
where  the  statutes  make  all  the  insurers  liable  for  the  face 
of  the  policy  less  the  depreciation  in  the  building  between 
the  time  of  issuing  the  policy  and  the  fire,  as  to  which  the 
burden  of  proof  is  on  the  insurer. '^^ 

The  term  "joarticular  account"  does  not  mean  anything 
more  than  a  statement  of  the  aggregate  value  of  the  property. 
A  provision  of  a  policy  requiring  the  insured  to  furnish  "as 
particular  an  account  of  the  loss  as  the  nature  of  the  case 
will  admit  of"  is  sufficiently  complied  with  by  a  correct 
statement  of  the  amount  of  loss,  where  all  the  papers  which 
could  alone  furnish  the  information  and  accurate  details  were 
totally  destroyed  by  fire.^®^  A  reasonable  compliance  with 
the  terms  of  a  policy  requiring  a  description  of  the  property 
destroyed  is  all  that  is  necessary,  and  where  the  policy  pro- 
vides for  the  furnishing  of  a  complete  inventoiy  of  the  prop- 
erty damaged  and  the  quantity  and  cost  of  each  article  and 
the  amount  claimed  thereon,  an  inventory  of  the  entire  stock 

"•Langan  v.  Royal  Ins.  Co.,  162  Pa.  St.  357;  Beatty  v.  Lycoming 
Co.  Mut.  Ins.  Co.,  66  Pa.  St.  9;  German  Ins.  Co.  v.  Pearlstone,  18 
Tex.  Civ,  App.  706,  45  S.  W.  S32;  Ward  v.  National  Fire  Ins.  Co., 
iO  Wash.  361;  Jones  v.  Mechanics'  Fire  Ins.  Co.,  36  N.  J.  Law,  29; 
O'Brien  v.  Commercial  Fire  Ins.  Co.,  63  N.  Y.  108;  Farmers'  Fire 
Ins.  Co.  v.  Mispelhorn,  50  Md.  180,  53  Md.  473,  9  Ins.  Law  J.  411. 

160  Meyer  v.  Insurance  Co.  of  North  America,  73  Mo.  App.  166; 
Phoenix  Ins.  Co.  v.  Levy,  12  Tex.  Civ.  App.  45,  33  S.  W.  992. 

'•^  Norton  v.  Rensselaer  &  S.  Ins.  Co.,  7  Cow.  (N.  Y.)  645,  1  Ben- 
nett, Fire  Ins.  Cas.  204;  Miller  v.  Hartford  Fire  Ins.  Co.,  70  Iowa, 
704;  Harkins  v.  Quincy  Mut.  Fire  Ins.  Co.,  16  Gray  (Mass.),  591; 
Erwin  v.  Springfield  F.  &  M.  Ins.  Co.,  24  Mo.  App.  145.  See  post, 
"Books  of  Account,  Vouchers,"  etc. 


500  NOTICE   AND    PKOOFS    OF   LOSS.  §  1^^ 

of  goods  insured,  wliicli  groups  some  of  the  articles  collec- 
tively, is  sufficient. ^^^ 

Examples  of  Insufficient  Proofs. 

If  the  insured  must  within  fourteen  days  after  a  loss  fur- 
nish "as  particular  account  of  the  property  destroyed  as  the 
nature  and  circumstances  will  admit  of,"  it  is  not  enough  to 
furnish  an  affidavit  and  a  gross  estimate  of  the  loss  and  a 
statement  of  the  general  character  of  the  property  and  a 
further  statement  that  the  invoice  book  of  the  insured  had 
been  burned  and  the  insured  had  no  adequate  means  of  esti- 
mating the  exact  amount  of  the  loss,  where  it  was  possible  to 
have  made  a  reasonably  correct  list  and  description  of  the 
goods  furnished.  Under  such  a  policy  an  itemized  account 
and  statement  of  the  goods  destroyed  is  contemplated.  ^^^'  If 
the  insured  is  required  to  furnish  proof  including  a  state- 
ment of  his  interest  in  the  property  and  fails  to  insert  such  a 
statement  in  his  proof  of  loss,  he  cannot  maintain  an  action 
unless  the  omission  is  waived  by  the  officers  of  the  com- 
pany. ^^^ 

^"  Boyle  V.  Hamburg-Bremen  Fire  Ins.  Co.,  169  Pa.  St.  349;  Aetna 
Ins.  Co.  V.  Peoples'  Bank  of  Greenville  (C.  C.  A.),  62  Fed.  222;  Cat- 
lin  V.  Springfield  Fire  Ins.  Co.,  1  Sum.  434,  Fed.  Cas. 'No.  2.522,  1 
Bennett,  Fire  Ins.  Cas.  436;  Towne  v.  Springfield  F.  &  M.  Ins.  Co., 
145  Mass.  582;  Smith  v.  Commonwealth  Ins.  Co.,  49  Wis.  322;  Peet  v. 
Dakota  F.  &  M.  Ins.  Co.,  1  S.  D.  462,  47  N.  W.  532. 

'^  Nixon  V.  Queen  Ins.  Co.,  23  Can.  Sup.  Ct.  26.  See,  also,  Daniels 
V.  Equitable  Fire  Ins.  Co.,  50  Conn.  551;  Peoples'  Fire  Ins.  Co.  v. 
Pulver,  127  111.  246;  Fink  v.  Lancashire  Ins.  Co.,  60  Mo.  App.  673; 
Beatty  v.  Lycoming  Co.  Mut.  Ins.  Co.,  66  Pa.  St.  9;  Summerfield  v. 
Phoenix  Assur.  Co.,  65  Fed.  292;  Edgerly  v.  Farmers'  Ins.  Co.,  43 
Iowa,  587;  Williams  v.  Queen's  Ins.  Co.,  39  Fed.  167;  Gauche  v. 
London  &  L.  Ins.  Co.,  4  Woods,  102,  10  Fed.  347;  Aetna  Ins.  Co.  v. 
Peoples'  Bank  of  Greenville  (C.  C.  A.)',  6^  Fed.  224. 

'■''*  Shawmut  Sugar  Refining  Co.  v.  Peoples'  Mut.  Fire  Ins.  Co.,  1? 
Gray  (Mass.),  535;  Wellcome  v.  Peoples'  Equitable  Mut.  Fire  Ins. 
Co.,  2  Gray  (Mass.),  481. 


§  172  FORM   AND   CONTENTS.  601 

Upon  a  claim  made  by  Mrs.  II.  F.  Welsh  imder  a  fire  and 
lightning  policy  for  loss  of  a  cow  claimed  to  have  been  killed 
by  lightning,  a  certificate  of  a  veterinary  surgeon  to  the  fact 
of  the  cow  being  killed  by  lightning,  naming  Geo.  H.  Welsh 
as  the  OAvner,  is  not  sufficient  proof  of  loss  under  Laws  Iowa 
1880,  c.  211,  §  3,  requiring  an  affidavit  stating  the  facts.^^^ 

A  letter  by  a  member  of  an  accident  association  stating  that 
he  had  badly  sprained  his  right  foot  from  favoring  his  left 
foot  which  had  been  previously  injured,  does  not  constitute 
sufficient  notice  of  an  accident  to  the  right  foot  in  stepping 
from  a  street  car,  under  a  policy  requiring  "due  notice  of  the 
accident"  to  be  given  within  thirty  days  from  the  happening 
of  the  accident.  The  court  held  that  the  accident  of  which 
notice  must  be  given  is  not  the  injury  alone,  but  the  cause  of 
it  as  well.^*^^  Proofs  of  loss  which  do  not  state  how  the  fire 
originated,  or  the  actual  cash  value  of  the  property,  except 
by  inference,  are  insufficient  under  McClain's  Iowa  Code, 
(section  1Y34),  inquiring  that  the  proofs  shall  set  forth  the 
facts  as  to  how  the  loss  occurred  and  the  extent  thereof.  ^^'^ 
Nor  is  the  estimate  given  by  carpenters  as  to  the  probable 
cost  of  the  destroyed  building  a  sufllicient  compliance. ^^^ 

"■  Welsh  V.  Des  Moines  Ins.  Co.,  71  Iowa,  337,  32  N.  W.  369.  In 
this  case  the  court  said  in  substance:  The  policy  did  not  prescribe 
any  specific  mode  of  proof  of  loss.  The  Iowa  statute  requires  it  to 
be  by  "affidavit  stating  the  facts  as  to  how  the  loss  occurred,  so  far 
as  they  were  within  the  assured's  knowledge,  and  the  extent  of  the 
loss."  In  this  case  what  is  claimed  to  be  proof  of  loss  is  not  an  affi- 
davit. It  is  a  mere  certificate  of  a  veterinary  surgeon  that  a  cow 
was  struck  by  lightning,  and  killed.  It  does  not  give  the  extent  of 
the  loss,  nor  name  the  plaintiff  as  the  owner  of  the  cow,  but  fixes 
the  ownership  in  another.    It  was  held  insufficient. 

"'  Simons  v.  Iowa  State  T.  M.  Ass'n,  102  Iowa,  267,  71  N.  W.  254. 

'"  Brock  V.  Des  Moines  Ins.  Co.,  96  Iowa,  39,  64  N.  W.  685. 

'«"  Heusinkveld  v.  St.  Paul  F.  &  M.  Ins.  Co.,  96  Iowa,  224,  64  N.  W. 
769. 


502  notice  and  pkoofs  of  loss.  §  173 

Certificates  of  Magistrate,  Notary  Public,  etc. 
§  173.  Provisions  requiring  the  insured  to  furnish  with  the 
proofs,  or  "  when  required,"  the  certificates  of  some  designated 
official  or  individual,  are  valid  and  binding  unless  prohibited 
by  statute. 

The  great  preponderance  of  judicial  opinion  is  in  favor  of 
the  rule  that  conditions  in  policies  requiring  the  insured  to 
serve  either  with  and  as  a  part  of  his  proofs  or  within  a  given 
time  thereafter  or  "if  required,"  the  certificate  of  some  desig- 
nated magistrate,  notary  public,  physician,  or  other  party, 
to  the  effect  that  the  fire,  loss,  death,  or  accident  for  which 
claim  is  to  be  made  happened  under  given  circumstances,  are 
material  and  valid ;  and  if  the  furnishing  of  them  is  made  a 
condition  precedent  to  a  right  of  recovery  by  insured,  full 
compliance  on  his  part  is  necessary  unless  waived  by  the 
insurer.  When  the  stipulation  is  absolute,  the  rights  of  the 
parties  are  governed  by  what  has  been  said  as  to  proofs  and 
their  contents  ;^^^  but  the  provisions  of  a  policy  compelling 
the  insured  to  furnish  a  certificate  "if  required"  are  not 
operative  until  the  certificate  is  formally  required  by  the 
insurer. ^■^^  The  certificate  of  the  physician  attending  the 
insured  prior  to  his  death  is  not  a  necessary  part  of  the  proofs 
of  loss  unless  made  so  either  by  separate  provision  of  the  pol- 

""Turley  v.  North  American  Fire  Ins.  Co.,  25  Wend.  (N.  Y.)  374, 
2  Bennett,  Fire  Ins.  Cas.  50;  Columbia  Ins.  Co.  v.  Lawrence,  10  Pet. 
(U.  S.)  507,  2  Pet.  25;  Welsh  v.  Des  Moines  Ins.  Co.,  71  Iowa,  337; 
German-American  Ins.  Co.  v.  Etherton,  25  Neb.  505,  41  N.  W.  406; 
Williams  v.  Queen's  Ins.  Co.,  39  Fed.  167;  Protection  Ins.  Co.  v, 
Pherson,  5  Ind.  417;  Leadbetter  v.  Aetna  Ins.  Co.,  13  Me.  265;  Van 
Poucke  V.  Netherland  St.  V.  de  P.  Soc,  63  Mich.  378,  29  N.  W. 
803;  Fink  v.  Lancashire  Ins.  Co.,  60  Mo.  App.  673;  Summerfleld  v. 
PhcBnix  Assur.  Co.,  65  Fed.  292;  Daniels  v.  Equitable  Fire  Ins.  Co., 
50  Conn.  551.  As  to  time  of  furnishing,  see  Badger  v.  Glens  Falls 
Ins.  Co.,  49  Wis.  389. 

""McNally  v.  Phoenix  Ins.  Co.,  137  N.  Y.  389;  Jones  v.  Howard  Ins. 
Co.,  117  N.  Y.  103,  ^nd  cases  infra. 


§  173  CEKTIFICATES   OF   MAGISTRATE,  ETO.  503 

icy  or  hj  custom  and  usage  to  that  effect  knoTm  to  the  as- 
sured. •^'^•^ 

Under  the  provisions  of  a  standard  fire  insurance  policy 
providing  that  the  insured  shall,  if  required,  furnish  a  cer- 
tificate of  the  disinterested  magistrate  or  notary  living  nearest 
to  the  place  of  the  fire,  stating  that  he  has  examined  the  cir- 
cumstances and  believes  the  insured  has  honestly  sustained 
a  loss  to  the  amount  certified  to,  and  that  no  action  on  the 
policy  for  the  recovery  of  any  claim  can  be  sustained  until 
after  full  compliance  by  insured  with  all  of  the  requirements 
of  the  policy,  the  furnishing  by  the  insured  of  a  certificate  in 
the  manner  and  form  aforesaid,  if  required  so  to  do  by  the 
insurer,  is  a  condition  precedent  to  the  right  of  the  insured  to 
recover,  and  his  inability  to  furnish  such  certificate  because 
of  the  arbitrary  refusal  of  the  magistrate  or  notary  public 
for  any  cause  whatever  to  give  such  certificate,  does  not  ex- 
cuse the  failure  to  furnish  it,  unless  such  failure  is  caused  by 
the  insurer.  ^'^^  If  such  certificate  be  furnished  voluntarily 
by  the  insured,  it  is  mere  surplusage  and  of  no  effect  except 
that  statements  contained  therein  might  afterwards  be  used 
as  evidence  against  him.^'''^ 

It  has  been  held  that  the  requirement  of  a  policy  that  the 
insured  shall  furnish  a  certificate  by  the  nearest  notaiy 
public  or  justice  of  the  peace  not  interested  in  any  way,  as  to 
the  honesty  of  the  loss,  is  excused  where  the  nearest  officer 

'"  Buffalo  L.,  T.  &  S.  Deposit  Co.  v.  Knights  Templar  &  M.  Mut. 
Aid  Ass'n,  126  N.  Y.  450;  Taylor  v.  Aetna  Life  Ins.  Co.,  13  Gray 
(Mass.),  438. 

"'Lane  v.  St.  Paul  F.  &  M.  Ins.  Co.,  50  Minn.  227;  Roumage  v.  Me- 
chanics' Fire  Ins.  Co.,  13  N.  J.  Law,  110;  Williams  v.  Queen's  Ins. 
Co.,  39  Fed.  167;  Aetna  Ins.  Co.  v.  Peoples'  Bank  of  Greenville  (C. 
C.  A.),  62  Fed.  222;  Lehigh  v.  Springfield  F.  &  M.  Ins.  Co.,  37  Mo. 
App.  542;  Johnson  v.  Phoenix  Ins.  Co.,  112  Mass.  49;  Kelly  v.  Suu 
Fire  Office,  141  Pa.  St.  10,  disapproving  earlier  decisions. 

"'  Merchants'  Ins.  Co.  v.  Gibbs,  56  N.  J.  Law,  679,  29  Atl.  485. 


504  NOTICE   AND   PROOFS    OF   LOSS.  §  173 

lias  been  retained  as  attorney  bv  tlie  insurer,  and  the  Insured 
after  an  attempt  in  good  faith  was  unable  to  find  any  other 
notary  or  justice  in  the  to^Ti  who  would  act.^'^'* 

Contra  —  Such  Provisions  Held  Invalid. 

But  in  New  York  it  has  been  held  that  t\e  refusal  of  an 
attending  physician  to  certify  to  the  proofs  of  loss  on  the 
ground  that  his  bill  had  not  been  paid  was  good  excuse  for 
failure  to  furnish  the  certificate.  The  court  said:  "The 
claimants  under  a  policy  of  insurance  are  not  required  to 
perform  impossible  conditions.  They  are  bound  to  use  dili- 
gent efforts  to  comply  with  the  stipulated  conditions,  but  if 
j^revented  from  doing  so  without  fault  or  negligence  on  their 
l^art,  they  are  not  thereby  precluded  from  recovering  in  a 
contested  case."-^'^^  And  the  Kentucky  court  of  appeals  has 
held  invalid  a  condition  requiring  a  certificate  of  the  near- 
est magistrate  or  notary  public  that  he  has  examined  the 
circumstances  and  believes  that  the  insured  has  honestly  sus- 
tained the  loss  to  the  amount  certified,  upon  the  ground  that 
there  was  no  law  under  which  such  ofiicer  could  be  required 
to  certify  at  all.^'^^  A  provision  requiring  the  insured  to 
have  his  proofs  certified  to  by  an  agent  or  oflScer  of  the  insurer 
is  unreasonable  and  vold.^'^''^  But  it  seems  that  a  by-law  of  a 
mutual  benefit  insurance  society  which  invests  a  committee 
with  authority  to  determine  whether  a  member,  claiming  to  be 
sick,  is  entitled  to  benefits  provided  for  sick  and  disabled 

"*  De  Land  v.  Aetna  Ins.  Co.,  68  Mo.  App.  277. 

'"O'Neill  V.  Massachusetts  Benefit  Ass'n,  63  Hun  (N.  Y,),  292; 
Aetna  Ins.  Co.  v.  Miers,  5  Sneed  (Tenn.),  139. 

""Hoke  V.  Richie,  100  Ky.  66,  37  S.  W.  266,  38  S.  W.  132;  Home 
Fire  Ins.  Co.  v.  Hammang,  44  Neb.  566,  62  N.  W.  883. 

"'Young  V.  Grand  Council,  A.  O.  of  A.,  63  Minn.  506;  Campbell  v. 
American  Popular  Life  Ins.  Co.,  1  MacArthur,  D.  C.  471. 


§  173  CERTIFICATES    OF   MAGISTRATE,  ETC.  505 

members,  is  valid  and  reasonable,  and  tbe  action  of  tbe  com- 
mittee on  the  question  is  final.  ^'^^ 

Statutory  Regulation. 

In  some  states  the  apparent  hardship  resulting  occasionally 
from  the  existence  and  enforcement  of  such  provisions  has 
moved  the  legislatures  to  declare  them  invalid. ^'''^ 

Under  the  Civil  Code  of  California,  (section  2637),  pro- 
viding that  it  shall  be  sufficient  to  furnish  reasonable  evidence 
that  the  refusal  of  tlie  nearest  notary  or  magistrate  to  sub- 
scribe to  the  notice  of  loss  was  not  induced  by  any  just 
disbelief  in  the  facts  necessary  to  be  certified,  if  the  notary 
nearest  to  the  scene  of  the  fire  refuses  to  furnish  the  cer- 
tificate because  of  the  fact  that  he  is  in  the  employ  of  the 
insurer,  the  insured  is  not  required  to  furnish  absolute  proof 
of  such  employment,  nor  need  he  inform  the  insurer  in  his 
proofs,  nor  at  the  time  of  furnishing  them,  of  the  reason  for 
obtaining  the  certificate  of  another  notary. ^^® 

*'  If  Required  "  —  What  is  a  Demand.] 

Where  a  policy  does  not  call  for  a  certificate  unless  "if 
required"  and  an  insufiicient  certificate  has  been  voluntarily 
furnished  by  the  insured  with  his  proofs,  an  objection  made 
by  the  insurer  to  the  proofs  because  the  certificate  of  the 
nearest  notary  has  not  been  furnished  as  provided  by  the 

"«Van  Poucke  v.  Netherland  St.  V.  de  P.  Soc,  63  Mich.  378,  29 
N.  W.  863;  Raymond  v.  Farmers'  Mut.  Fire  Ins.  Co.,  114  Mich.  380, 
72  N.  W.  255;  Campbell  v.  American  Popular  Life  Ins.  Co.,  1  Mac- 
Arthur,  D.  C.  471. 

""Laws  Wis.  1891,  c.  19.5,  §  1;  Laws  Wis.  1893,  c.  124;  Gen.  Laws 
Minn.  1895,  c.  175,  §  25;  Civil  Code  Cal.  §  2637;  Gen,  St.  Conn. 
§  2839;  2  Rev.  St.  Ind.  1888,  §  3770;  Rev.  St.  Me.  1883,  §  21,  p.  446; 
Rev.  Laws  Vt.  1880,  §  3626;  Shannon  v.  Hastings  Mut.  Ins.  Co.,  2 
Ont.  App.  81;  Aurora  Fire  Ins.  Co.  v.  Johnson.  46  Ind.  315;  Bailey 
V.  Hope  Ins.  Co.,  56  Me.  474;  Rev.  Codes  N.  Dak.  §  4530. 

^''"Noore  v.  Transatlantic  Fire  Ins.  Co.,  88  Cal.  152. 


506  NOTICE    AND    PROOFS    OF    LOSS.  §  173 

policy  is  not  a  requirement  of  siicli  certificate  ;-'^-'  but  when 
the  proofs  given  bj  the  insured  contained  a  certificate  not 
made  by  the  proper  officer,  and  the  company  replied  that  the 
proofs  were  incomplete  and  insufficient  because  they  did  not 
meet  the  requirements  of  the  policy  in  respect  to  the  magis- 
trate or  notary,  and  said  "for  the  above  reasons  we  decline  to 
accept  the  proofs  you  have  offered  as  sufficient  under  the  re- 
quirements of  the  policy,"  it  has  been  held  that  the  condition 
became  operative,  and  that  the  insured  must  furnish  a  new 
and  proper  certificate  before  he  can  recover.^^^ 

When  Demand  Must  be  Made. 

The  insurer  should  seasonably  avail  itself  of  the  right  to 
demand  ar  certificate  if  it  is  not  satisfied  with  the  mere  pro- 
duction of  the  preliminary  proofs.  The  mere  delay  of  thirty- 
seven  days  after  receipt  of  proofs  and  before  demanding  a 
certificate  is  no  Avaiver  of  the  right  to  demand  it  where  the 
policy  was  not  payable  until  sixty  days  after  proof  of  loss  and 
plaintiff  does  not  claim  that  the  delay  prevented  him  from 
obtaining  the  certificate  so  that  he  could  begin  suit  at  the  end 
of  the  sixty  days  or  that  it  in  any  way  prejudiced  him.^^^  But 
a  delay  of  five  weeks  has  been  held  sufficient  ground  for  find- 

'"^  Jones  V.  Howard  Ins.  Co.,  117  N.  Y.  103;  Burnett  v.  American 
Cent.  Ins.  Co.,  68  Mo.  App.  343. 

"=  Williams  v.  Queen's  Ins.  Co.,  39  Fed.  167.  And  see  Aetna  Ins. 
Co.  V.  Peoples'  Bank  of  Greenville  (C.  C.  A.),  62  Fed.  224;  Paltro- 
vitch  V.  Phoenix  Ins.  Co.,  143  N.  Y.  73,  25  L.  R.  A.  198;  Merchants' 
Ins.  Co.  V.  Gibbs,  56  N.  J.  Law,  679,  29  Atl.  485. 

Notice  to  the  insured  to  comply  strictly  with  the  terms  of  the 
policy  is  not  notice  to  furnish  a  certificate  of  a  magistrate  or  notary 
public,  which  need  be  furnished  only  if  required.  Moyer  v.  Sun  Ins. 
Office,  176  Pa.  St.  579. 

^*^  Williams  v.  Queen's  Ins.  Co.,  39  Fed.  168. 


I  173  CERTIFICATES   OF   MAGISTRATE,  ETC.  o07 

ing  a  waiver.'^^     Mere  delay  in  demanding  a  certificate -will 
not  extend  the  time  fixed  by  the  policy  for  bringing  suit.^'''' 

Effect  of  Insurer  Demanding  Certificate. 

A  demand  by  an  insurer  for  a  certificate  of  a  magistrate 
or  notary  is  a  waiver  of  defects  in  the  proofs  already  fur- 
nished by  the  insured  and  of  the  objection  that  the  proofs 
were  not  furnished  in  proper  time.  It  can  not  be  construed 
as  a  demand  for  further  or  amended  proofs,  and  does  not 
extend  the  time  for  bringing  suit,  when,  under  the  policy  in 
question,  liability  accrues  sixty  days  after  proofs  have  been 
furnished  and  suit  must  be  brought  within  twelve  months  after 
the  fire.^^^  Nor  will  delay  in  furnishing  the  certificate  ex- 
tend that  time.^^"^ 

Nearest  Magistrate  or  Notary. 

Under  a  provision  that  the  insured  "shall,  if  required,  pro- 
duce a  certificate  of  a  magistrate  or  notary  public  nearest 
to  the  place  of  the  fire,"  the  certificate  of  the  nearest  officer 
of  the  classes  named — whether  magistrate  or  notary — is  neces- 
sary. The  certificate  of  the  nearest  magistrate  is  insufficient 
where  there  is  a  nearer  notary. ^^^ 

"^Keeney  v.  Home  Ins.  Co.,  71  N.  Y.  396.  For  rule  when  certifi- 
cate must  be  furnished  without  demand,  see  Daniels  v.  Equitable 
Fire  Ins.  Co.,  50  Conn.  551;  Fink  v.  Lancashire  Ins.  Co.,  60  Mo.  App. 
673;  Summerfield  v.  Phoenix  Assur.  Co.,  65  Fed,  292.  On -waiver  by 
insurer  of  its  right  to  demand  a  certificate,  see  Daniels  v.  Equitable 
Fire  Ins.  Co.,  supra;  Williams  v.  Queen's  Ins.  Co.,  39  Fed.  168,  and 
post,  "Waiver." 

"=>  Merchants'  Ins.  Co.  v.  Gibbs,  56  N.  J.  Law,  679.  See,  also,  Mc- 
Nally  V.  Phoenix  Ins.  Co.,  137  N.  Y.  389. 

"^  Merchants'  Ins.  Co.  v.  Gibbs,  56  N.  J.  Law,  679,  29  Atl.  485. 

"■  McNally  v.  Phoenix  Ins.  Co.,  137  N.  Y.  389. 

"« Williams  v.  Queen's  Ins.  Co.,  39  Fed.  168.  And  see  Ben  Frank- 
lin Fire  Ins.  Co.  v.  Flynn,  98  Pa,  St.  628;  Lounsbury  v.  Protection 
Ins.  Co.,  8  Conn.  459. 


508  NOTICE   AND   PKOOFS   OF    LOSS.  §  1^3 

A  notaiy  public  is  not  a  magistrate  within  the  meaning  of 
the  condition  of  a  policy  requiring  the  certificate  of  the 
nearest  magistrate.  ^^^  In  determining  the  contiguity  of  a 
magistrate  or  notary  to  the  place  of  fire,  the  place^of  his  busi- 
ness and  not  his  residence  will  be  regarded,  and  no  nice  cal- 
culations of  distance  will  be  gone  into  to  ascertain  the  nearest 
person  who  might  give  the  certificate.  Where  there  are  sev- 
eral such  ofiicers  in  the  immediate  neighborhood,  the  certifi- 
cate of  any  one  of  them  will  be  a  sufficient  compliance  with  the 
conditions  of  the  policy,  and  a  distance  of  a  few  yards  more  or 
less  will  not  be  regarded  as  a  matter  of  any  importance.  The 
provision  is  liberally  construed.  Good  faith  on  the  part  of 
the  insured,  an  honest  effort  and  intention  to  comply,  and 
the  proximity  of  the  magistrate  to  the  place  of  the  fire  are  all 
that  can  be  required. ^^"^ 

It  was  recently  held  in  New  York  that  tlie  provision  of  a 
policy  that  proofs  of  loss  shall  be  accompanied  by  the  cer- 
tificate of  the  magistrate  or  notary  public  nearest  the  place 
of  the  fire,  is  sufficiently  complied  with  by  obtaining  a  certifi- 
cate of  a  notary  residing  four  blocks  from  the  place  of  the 
:fire,  who  keeps  his  office  two  or  three  blocks  in  the  other  di- 
rection and  passes  the  scene  of  the  fire  several  times  daily 
in  going  to  and  from  his  office  and  his  home ;  although  there 
were  notaries  living  nearer  the  place  of  the  fire  but  having  no 
notarial  seal  at  their  residences,  where  the  insured  acts  in  good 

''*»  Cayou  V.  Dwelling  House  Ins.  Co.,  68  Wis.  510,  32  N.  W.  540. 

'^  Smith  V.  Home  Ins.  Co.,  47  Hun  (N.  Y.),  39;  Agricultural  Ins. 
Co.  V.  Bemiller,  70  Md.  401;  Williams  v.  Niagara  Fire  Ins.  Co.,  50 
Iowa,  561;  Turley  v.  North  American  Fire  Ins.  Co.,  25  Wend,  (N.  Y.) 
374,  2  Bennett,  Fire  Ins.  Cas.  50;  American  Cent.  Ins.  Co,  v.  Roth- 
child,  82  111.  166;  Peoria  M.  &  F.  Ins.  Co.  v.  Whitehill,  25  111.  466; 
German  American  Ins.  Co.  v.  Etherton,  25  Neb.  505,  41  N.  W.  406. 
Biit  see  Protection  Ins.  Co.  v.  Pherson,  5  Ind.  417;  Leadbetter  v. 
Etna  Ins.  Co.,  13  Me.  265. 


§  173  CERTIFICATES    OF   MAGISTKATE,  ETC.  50& 

faith  and  is  informed  and  believes  that  the  magistrate  whose 
certificate  be  procured  is  in  fact  the  nearest  magistrate,  and 
the  proofs  of  loss  thus  certified  are  furnished  to  the  insurer 
which  retains  them  for  twenty-three  days  ^xdthout  objection 
and  then  demands  a  new  certificate  without  furnishing  any 
information  as  to  whom  it  considers  to  be  or  who  is  the  proper 
notary  or  magistrate  to  sign  the  certificate.  ■^'^^ 

Disinterested  —  Not  Concerned  in  Loss. 

The  words  "disinterested"  or  "not  concerned  in  the  loss" 
when  used  as  descriptive  of  the  magistrate  or  officer  who  must 
certify  to  the  proofs,  mean  one  of  the  enumerated  classes  who 
is  not  concerned  in  the  loss  by  reason  of  having  an  interest 
in  the  property  insured  or  in  the  policy  or  its  proceeds  as 
security  for  an  obligation  or  otherwise — one  who  will  neither 
make  or  lose  directly  or  indirectly  by  the  determination  of  the 
rights  and  obligations  in  respect  to  the  loss.  It  does  not  dis- 
qualify a  mere  general  creditor  of  the  insurer. ^^^  An  agent 
or  employe  of  the  insurer  is  disqualified. ^^^  A  magistrate 
who  owned  a  house  (next  to  the  plaintiff's)  which  was  de- 
stroyed by  the  same  fire  which  burned  a  building  of  the  plain- 
tiff against  whom  the  magistrate  had  entered  a  complaint  for 
setting  the  fire  is  "concerned  in  the  loss"  because  a  certificate 
made  by  him  to  the  effect  that  the  fire  was  honest  would  be 
conclusive  against  him  in  his  0"wn  right  to  recovery.  ^^* 

^"  Paltrovitch  v.  Phoenix  Ins.  Co.,  143  N.  Y.  73,  25  L.  R.  A.  198. 

^'"Dolliver  v.  St.  Joseph  F.  &  M.  Ins.  Co.,  131  Mass.  39;  Smith  v. 
Home  Ins.  Co.,  47  Hun  (N.  Y.),  39.  But  see  Aetna  Ins.  Co.  v.  Miers, 
5  Sneed  (Tenn.),  139. 

"^Noone  v.  Transatlantic  Fire  Ins.  Co.,  88  Cal.  152;  Young  v. 
Grand  Council,  A.  0.  of  A.,  63  Minn.  506;  De  Land  v.  Aetna  Ins.  Co., 
68  Mo.  App.  277;  Campbell  v.  American  Popular  Life  Ins.  Co.,  1  Mac- 
Arthur,  D.  C.  471. 

'"Wright  V.  Hartford  Fire  Ins.  Co.,  36  Wis.  522;  Ganong  v.  Aetna 
Ins.  Co.,  6  Allen  (N.  B.),  75. 


510  NOTICE    AND    PROOFS    OF   LOSS.  §  173 

A  statement  by  a  magistrate  in  his  certificate  that  he  is 
not  concerned  in  the  loss,  is  prima  facie  evidence  of  that 
fact.i^^ 

Not  Related  to  Insured. 

A  notary  who  has  married  the  first  cousin  of  the  insured  is 
"related"  to  him  so  as  to  be  disqualified  to  give  a  certificate  to 
accompany  the  proof  of  loss,  within  the  meaning  of  a  policy 
requiring  a  certificate  from  one  "not  related  to  the  in- 
sured."i^6 

Physician's  Certificate. 

An  "attending  physician"  is  the  family  physician  of  the  in- 
sured if  he  have  one.  Thus,  where  a  retired  physician,  being 
a  friend  and  neighbor  of  the  deceased,  was  called  in  before 
the  arrival  of  the  regular  family  physician  who  took  charge 
of  the  case,  it  has  been  held  that  the  certificate  of  the  latter 
only  is  required.  ^^'''  Under  the  provision  of  a  policy  requir- 
ing the  sworn  certificate  of  the  attending  physician,  the  in- 
sured is  not  bound  to  furnish  a  certificate  from  a  physician 
who  had  not  attended  or  treated  him  for  some  years  before  his 
death. ^^^  The  certificate  of  a  physician  who,  in  a  foreign 
city,  attended  a  member  of  a  benefit  association,  together  with 
the  certificate  of  the  mayor  of  such  city,  and  the  evidence  of 
the  plaintiff  that  he  saw  them  both  sign  the  certificates,  is  a 
sufiicient  compliance  with  the  by-laws  of  the  association  re- 
quiring a  medical  certificate  signed  or  authenticated  by  the 
legal  authorities  of  the  place  where  the  member  was  sick.^^^ 

"'Cornell  v.  Le  Roy,  9  Wend.  (N.  Y.)  163. 

''°  Peoples'  Bank  of  Greenville  v.  Aetna  Ins.  Co.  (C.  C.  A.),  74  Fed. 
507. 

"'  Gibson  v.  American  Mut.  Life  Ins.  Co.,  37  N.  Y.  580. 

i9»  Fiynn  V.  Massachusetts  Ben.  Ass'n,  152  Mass.  288. 

•»»  Mutual  A.  &  I.  Soc.  v.  Monti,  59  N.  J.  Law,  341,  36  Atl.  666.  And 
see  Welsh  v.  Des    Moines  Ins.  Co.,  71    Iowa,  337;     Dreier  v.  Conti- 


§  173  CERTIFICATES    OF   MAGISTRATE,  ETO.  611 

When  Certificate  Must  be  Furnished. 

As  we  have  already  seen,  a  requirement  of  a  policy  that  tlie 
certificate  of  some  designated  party  be  furnished  with  the 
proofs  as  a  condition  precedent  to  recovery,  must  be  strictly 
complied  with  unless  compliance  be  prevented  or  waived  by 
the  insurer  ;^'^°  but  Avhen  a  certificate  need  only  be  furnished 
^'if  required,"  the  failure  of  the  insured  to  attach  a  certificate 
to  his  proofs  of  loss  is  immaterial  unless  one  is  demanded  by 
the  insurer.  ^^^  When  the  policy  stipulates  that  the  insured 
shall  furnish  proofs  of  loss  and  the  certificate  if  required  so 
to  do,  the  provisions  are  severable,  as  those  relating  to  notice 
and  proofs ;  and  the  acceptance  of  proofs  of  loss  as  compli- 
ance with  one  condition,  cannot  be  construed  as  amounting 
to  a  waiver  of  compliance  with  the  other. ^^^  Under  such 
a  condition  the  company  may  call  for  the  certificate  or  not  as 
it  deems  necessaiy.  It  can  call  for  it  at  any  time  before 
payment  unless  waived,  and  when  called  for  the  insured 
may  comply  with  the  demand  in  a  reasonable  time  and  before 
the  commencement  of  the  action.     The  certificate  is  some- 

nental  Life  Ins.  Co.,  24  Fed.  670;  Spitz  v.  Mutual  Life  Ass'n,  54 
N.  Y.  St.  Rep.  818,  25  N.  Y.  Supp.  469;  Redmond  v.  Industrial  Ben. 
Ass'n,  78  Hun  (N.  Y.),  104;  Clemans  v.  Supreme  Assembly,  R.  S.  of 
G.  F.,  131  N.  Y.  485;  Day  v.  Mutual  Ben.  Life  Ins.  Co.,  1  MacArthur, 
D.  C.  598;  Connecticut  Mut.  Life  Ins.  Co.  v.  Siegel,  9  Bush  (Ky.), 
450. 

^°°Fink  V.  Lancashire  Ins.  Co.,  60  Mo.  App.  673;  Daniels  v.  Equi- 
table Fire  Ins.  Co.,  50  Conn.  551;  Summerfield  v.  Phoenix  Assur.  Co., 
65  Fed.  292. 

'"^McNally  v.  Phoenix  Ins.  Co.,  137  N.  Y.  389;  Merchants'  Ins.  Co. 
V.  Gibbs,  56  N.  J.  Law,  679. 

=="'  Lane  v.  St.  Paul  F.  &  M.  Ins.  Co.,  50  Minn.  227.  See  ante,  "No- 
tice and  Proofs  of  Loss."  For  waiver  of  certificate,  see  post, 
"Waiver,"  and  Turley  v.  North  American  Fire  Ins.  Co.,  25  Wend. 
(N.  Y.)  374;  Daniels  v.  Equitable  Fire  Ins.  Co.,  50  Conn.  551;  Keeney 
V.  Home  Ins.  Co.,  71  N.  Y.  396;  Williams  v.  Queen's  Ins.  Co.,  39  Fed. 
168. 


512  NOTICE   AND    PROOFS    OF   LOSS.  §  173 

thing  tlie  company  may  require;  but  is  not  an  absolute  re- 
quirement of  the  policy  to  be  complied  with  before  the  sixty 
days  begin  to  run.  In  a  New  York  case  the  policy  became 
payable  in  event  of  fire  sixty  days  after  full  compliance  by  the 
insured  with  all  the  conditions.  Proofs  had  been  duly  fur- 
nished and  a  certificate  had  been  demanded.  The  insured 
applied  to  a  magistrate  of  the  town  to  make  a  certificate.  He 
declined.  Then  he  applied  to  another  magistrate  who  was 
an  attorney;  he,  after  keeping  the  papers  three  months,  in- 
formed the  insurer  that  he  was  unable  to  make  the  certificate 
as  he  had  been  retained  as  counsel  for  the  defendant.  Plain- 
tiff then  applied  to  a  third  magistrate.  At  that  time,  how- 
ever, there  had  been  some  negotiations  in  regard  to  a  settle- 
ment, and  a  promise  had  been  made  to  settle  and  pay  plaintiff's 
claim  if  he  would  bring  his  figures  "down  to  hard  pan,"  and 
in  consequence  of  this  the  statement  as  to  value  was  reduced. 
Soon  thereafter  the  certificate  was  furnished.  Under  these 
circumstances  it  was  held  that  the  delay  in  furnishing  the 
certificate  did  not,  as  a  matter  of  law,  defeat  plaintiff's  cause 
of  action ;  but  it  presented  a  question  of  fact  for  a  jury  whether 
or  not  the  conduct  of  plaintiff  with  respect  to  the  certificate 
was  diligent  and  reasonable."^"^ 

Contents  of  Certificate. 

Clauses  in  policies  governing  or  regulating  the  contents  of 
certificates  are  construed  with  the  same  liberality  as  similar 
clauses  concerning  notice  and  proof  of  loss.  A  certificate 
need  not  be  in  the  precise  words  specified  in  the  policy.  If 
it  be  so  drawn  as  to  evidently  mean  the  same  thing  it  is 
enough.  Accordingly,  when  a  condition  required  that  the 
magistrate  should  state  in  his  certificate  that  he  was  acquainted 

=<"McNally  v.  Phoenix  Ins.  Co.,  137  N.  Y.  389;  Summerfield  v. 
Phoenix  Assur.  Co.,  65  Fed.  292,  cases  ante. 


I  173  CERTIFICATES    OF   MAGISTRATE,  ETC.  513 

with  the  character  and  circumstances  of  the  person  insured, 
and  that  having  investigated  the  circumstances  in  relation  to 
the  loss,  he  knew  or  verily  believed  that  the  insured  had  sus- 
tained loss  to  the  amount  mentioned  in  the  certificate,  it  was 
held  that  a  certificate  of  a  magistrate  that  he  resided  within 
two  miles  of  the  place  where  the  fire  occurred,  and  was  ac- 
quainted with  the  assured,  and  that  the  assured  had  sustained 
loss  to  the  amount  of  the  value  of  the  building  mentioned  in 
the  account  of  loss  of  the  insured,  was  a  sufiicient  compliance 
with  the  conditions  mentioned.^^* 

The  requirement  of  a  policy  of  insurance,  that  the  proofs  of 
loss  "shall  be  signed  and  sworn  to  by  the  insured,"  means  that 
the  oath  or  a  certificate  thereof  shall  be  in  writing,  and  a  cer- 
tificate of  the  officer  which  does  not  state  that  the  affiant  made 
oath  before  him  is  fatally  defective.  ^"^^  And  a  condition  that 
the  magistrate  must  certify  that  the  notice  of  loss  was  sworn 
to  before  him  and  that  he  believed  it  to  be  true,  is  complied 
with  by  a  magistrate's  certificate  stating  that  it  was  sworn  to 
before  him,  and  that  he  believed  the  insured  had  really  by  mis- 
fortune, and  without  fraud  or  evil  practice,  sustained  by  th"e 
fire  damage  to  the  amount  stated  in  the  affidavit. ^"^  A  pro- 
vision requiring  a  certificate  from  a  magistrate  not  next  of 
kin  to  the  insured,  does  not  require  a  statement  in  the  proofs 
to  that  effect,  but  such  must  be  the  fact ;  and  if  the  magistrate 
be  disqualified  the  burden  is  upon  the  insurer  to  establish  that 
fact. 2°^     Bu.t  it  has  been  held  that  when  the  policy  requires 

"o*  Aetna  Fire  Ins.  Co.  v.  Tyler,  16  Wend.  (N.  Y.)  385;  Turley  v. 
North  American  Fire  Ins.  Co.,  25  Wend.  (N.  Y.)  374;  Paltrovitch  v. 
Phoenix  Ins.  Co.,  143  N.  Y.  73,  25  L.  R.  A.  198. 

^''McManus  v.  Western  Assur.  Co.,  22  Misc.  Rep.  269,  48  N.  Y. 
Supp.  820. 

^•"Lockwood  V.  Middlesex  Mut.  Assur.  Co.,  47  Conn.  553. 

='"Erwin  v.  Springfield  F.  &  M.  Ins.  Co.,  24  Mo.  App.  145;  Cornell 
V.  Le    Roy,  9    Wend.   (N.  Y.)   163,    1    Bennett,  Fire    Ins.  Cas.  408; 

KERR,  INS.— 33 


514  NOTICE    AND    PROOFS    OF    LOSS.  §  1T4: 

that  there  he  furnished  with  the  proofs  of  loss  a  certificate  of 
the  nearest  notary  that  he  has  examined  the  circumstances  and 
helieves  that  the  insured  has  honestly  sustained  a  loss  to  the 
amount  certified,  the  certificate  is  insufficient  unless  it  states 
that  the  notary  is  the  one  living  nearest  to  the  place  of  fire 
and  that  he  examined  into  the  circumstances  of  the  case  and 
believes  that  the  insured  has  honestly  sustained  the  loss 
claimed. ^"^^  And  a  certificate  signed  by  a  person  disqualified 
by  the  policy  is  insufficient.  ^^^ 

Who  Must  Fukxish  Notice  and  Proof. 

§  174.  Notice  and  proof  must  be  given  by  the  party  desig- 
nated in  the  policy. 

Notice  and  proofs  must,  if  possible,  be  given  by  the  one 
upon  ■whom  the  policy  imposes  that  duty.^^°  The  court  will 
not,  for  the  purpose  of  enforcing  a  forfeiture  against  an  in- 
sured, supply  the  omission  of  a  provision  in  a  policy  to  specify 
by  whom  the  notice  shall  be  given.^^^     In  the  absence  of  any 

Lounsbury  v.  Protection  Ins.  Co.,  8  Conn.  459;  Noone  v.  Transat- 
lantic Fire  Ins.  Co.,  88  Cal.  152. 

^'Fink  V.  Lancashire  Ins.  Co.,  60  Mo.  App.  673;  Simmons  v.  "West 
Virginia  Ins.  Co.,  8  W.  Va.  474.  See,  also,  Summerfield  v.  Phoenix 
Assur.  Co.,  65  Fed.  292. 

'»*  Aetna  Ins.  Co.  v.  Peoples'  Bank  of  Greenville  (C.  C.  A.),  62  Fed. 
222;  Williams  v.  Queen's  Ins.  Co.,  39  Fed.  167;  Daniels  v.  Equitable 
Fire  Ins.  Co.,  50  Conn.  551.  See,  also,  Agricultural  Ins.  Co.  v.  Be- 
miller,  70  Md.  400;  Mann  v.  Western  Assur.  Co.,  17  Up.  Can.  Q.  B. 
190;  Birmingham  Fire  Ins.  Co.  v.  Pulver,  126  111.  329;  Flynn  v.  Mas- 
sachusetts Ben.  Ass'n,  152  Mass.  288. 

^"Newman  v.  Springfield  F.  &  M.  Ins.  Co.,  17  Minn.  123  (Gil.  98)  ; 
Mcgraw  v.  Germania  Fire  Ins.  Co.,  54  Mich.  145,  19  N.  W.  931;  Aetna 
Ins.  Co.  V.  Peoples'  Bank  of  Greenville  (C.  C.  A.),  62  Fed.  222;  Dan- 
iels V.  Equitable  Fire  Ins.  Co.,  50  Conn.  551;  Stephenson  v.  Bankers' 
Life  Ass'n,  108  Iowa,  637,  79  N.  W.  459. 

-"  Prendergast  v.  Dwelling  House  Ins.  Co.,  67  Mo.  App.  426.  This 
policy  provided  that  "*  *  *  should  give  immediate  notice  in  writ- 
ing of  loss,  and  should  within  sixty  days  render    *    *    *    a  verified 


§  174  WHO    MUST    FURNISH    NOTICE    AND    PKOOF.  515 

provision  in  the  policy  fixing  the  parties  by  whom  and  to 
whom  the  notice  shall  be  given,  a  notice  of  loss  given  by  the 
local  agent  to  his  company  and  acted  upon  by  the  latter  is  suf- 
ficient, and,  generally  speaking,  any  notice  given  by  any  per- 
son and  upon  which  the  insurer  acts,  is  sufficient.^^- 

The  provisions  of  a  policy  requiring  notice  to  be  given 
in  writing  to  the  home  office  are  complied  with  when  notice  is 
given  to  the  insurer  by  its  local  agent  based  upon  information 
secured  by  him  from  the  insured.^^^  Substantial  compliance 
with  the  provisions  of  a  policy  is  enough. ^^"^  But  the  state- 
ment and  proofs  of  loss  concerning  the  property  destroyed 
must  bo  made  and  sworn  to  by  the  insured  personally,  when  so 
required  by  the  policy. ^^^  Thus,  where  a  policy  contained  a 
provision  requiring  "all  persons  insured  by  this  company  to 
deliver  a  particular  account  of  loss  or  damage  signed  by  their 
ovna.  hands  and  containing,"  etc.,  it  was  held  that  notice  given 
for  and  on  behalf  of  the  insured  by  a  third  party  who  was  in- 
terested in  the  policy,  but  was  not  an  agent  of  the  insured,  was 
insufficient.^^^ 

Proofs  of  loss  furnished  by  one  not  legally  entitled  to  fur- 
statement,  etc;"  and  the  court  held  that  this  did  not  impose  on  any- 
one the  duty  of  furnishing  proofs. 

''"Phoenix  Ins.  Co.  v.  Perry,  131  Ind.  572,  30  N.  E.  637;  Partridge 
V.  Milwaukee  Mechanics'  Ins.  Co.,  13  App.  Div.  519,  43  N.  Y.  Supp. 
632;  Brink  v.  Hanover  Fire  Ins.  Co.,  70  N.  Y.  593;  Travellers'  Ins. 
Co.  V.  Edwards,  122  U.  S.  457;  Omaha  Fire  Ins.  Co.  v.  Dierks,  43  Neb. 
473,  61  N.  W.  740;  Peele  v.  Provident  Fund  Soc,  147  Ind.  543. 

""American  Ace.  Ins.  Co.  v.  Norment,  91  Tenn.  1,  18  S.  W.  395; 
Bennett  v.  Maryland  Fire  Ins.  Co.,  14  Blatchf.  422,  Fed.  Cas.  No. 
3,221. 

"^Karelsen  v.  Sun  Fire  Office,  122  N.  Y.  545;  West  Rockingham 
Mut.  Fire  Ins.  Co.  v.  Sheets,  26  Grat.  (Va.)   854. 

""Spaulding  v.  Vermont  Mut.  Fire  Ins.  Co.,  53  Vt.  156;  State  Ins. 
Co.  v.  Maackens,  38  N.  J.  Law,  564. 

*^*Ayres  v.  Hartford  Fire  Ins.  Co.,  17  Iowa,  179;  Spaulding  v.  Ver- 
mont Mut.  Fire  Ins.  Co.,  53  Vt.  156. 


516  KOTICE   AND   PEOOTS    OF   LOSS.  §  I'J''^ 

nisli  tliem  may  be  adopted  by  one  wbo  has  legal  riglit  to 
furnish  proofs  of  loss  with  the  consent  of  the  insurer.  Thus, 
where  an  administrator,  with  the  implied  assent  of  an  acci- 
dent indemnity  association,  adopts  and  relies  upon  the  act  of  a 
third  person  who  has  filed  with  the  association  proof  of  a  claim 
growing  out  of  the  accidental  killing  of  such  administrator's 
intestate  who  was  a  member  of  defendant,  the  association  can- 
not defeat  recovery  under  the  policy  upon  the  ground  that  it 
was  incumbent  upon  the  administrator  to  file  the  proofs  him- 
self, and  that  he  could  not,  with  the  implied  consent  of  de- 
fendant, adopt  as  his  own  proofs  filed  and  served  by  such 
third  person. ^^''^ 

Proofs  of  death  furnished  to  an  insurer  by  an  aunt  of  the 
deceased  and  retained  without  objection,  are  available  to  the 
mother  in  an  action  brought  by  her  upon  the  policy  which  is 
payable  to  any  relative  by  blood  of  the  insured,  and  requires 
that  the  proofs  shall  contain  answers  to  each  question  pro- 
pounded to  the  claimant  jn  blanks  furnished  by  the  in- 
surer. ^-^^ 

In  case  of  loss  or  damage  by  fire  after  the  death  of  the 
original  insured  and  before  the  appointment  of  a  legal  repre- 
sentative, those  interested  in  the  estate  and  in  securing  in- 
demnity under  a  policy  of  insurance  must  make  proper  and 
reasonable  efforts  to  see  that  the  covenants  and  conditions  of 
the  policy  concerning  notice  and  proof  of  loss  are  complied 
with,  and  within  a  reasonable  time  must  use  such  agencies  as 
the  law  provides  to  secure  that  result.^^^     Proofs  of  loss  are 

=^^  Wilson  V.  Northwestern  Mut.  Ace.  Ass'n,  53  Minn.  470;  Loeb  v. 
American  Cent.  Ins.  Co.,  99  Mo.  50. 

="' Kelly  V.  Metropolitan  Life  Ins.  Co.,  15  App.  Div.  220,  44  N.  Y. 
Supp.  179;  Graham  v.  Phoenix  Ins.  Co.,  17  Hun  (N.  Y.),  156. 

^'^  Matthews  v.  American  Cent.  Ins.  Co.,  154  N.  Y.  449,  39  L.  R.  A. 
433;  Farmers'  Mut.  Ins.  Co.  v.  Graybill,  74  Pa.  St.  17. 


§  174  WHO    MUST    FURNISH    NOTICE    AND    PROOF.  517 

properly  furnished  by  the  trustee,  successor  to  the  trustee 
and  agent  to  whom  the  policy  was  payable  in  case  of  loss.^^^ 

One  for  whose  indemnity  a  policy  of  insurance  was  issued 
under  such  circumstances  as  to  entitle  him  to  enforce  the  same 
if  the  conditions  are  complied  with,  is  the  proper  person  to 
make  proofs  of  loss,  although  the  policy  was  issued  to  another 
person.^^^  And  proofs  of  loss  required  by  a  policy  of  insur- 
ance may  be  made  by  the  agent  of  the  insured,  where  the 
latter  is  not  in  a  position  to  make  them  in  person,  and  the 
objection  that  proofs  of  loss  were  made  by  an  agent  of  the 
insured,  rather  than  by  the  insured,  is  waived  where  the  com- 
pany bases  its  refusal  to  pay  the  loss  on  the  ground  that  the 
person  named  as  the  insured  was  dead  Avhen  the  policy  was 
issued. ^^^  The  agent  must  have  either  express  or  implied 
power  to  act;  a  self -constituted  agency  is  insufficient.  ^^^ 

When  a  husband,  who  owns  insured  property,  is  perma- 
nently absent  and  ignorant  of  a  loss,  and  the  surroundings,  cir- 
cumstances, and  the  kind  and  value  of  the  property  destroyed, 
and  has  told  his  wife  to  care  for  the  property  until  he  re- 
turned, she  may  make  proofs  of  loss,  even  though  the  policy 
requires  the  assured  to  give  notice  and  proof  of  loss  and  verify 
the  same  by  his  oath.^^'* 

Where  a  fire  insurance  policy  is  issued  to  a  husband  on  a 

220  wolcott  V.  Sprague,  55  Fed.  545. 

"1  Milwaukee  Mechanics'  Ins.  Co.  v.  Brown,  3  Kan.  App.  225,  44 
Pac.  35. 

^  Lumbermen's  Mut.  Ins.  Co.  v.  Bell,  166  111.  400,  45  N.  E.  130. 

"'Ayres  v.  Hartford    Fire    Ins.  Co.,  17    Iowa,  176;     Spaulding  v. 
Vermont  Mut.  Fire  Ins.  Co.,  53  Vt.  156;  State  Ins.  Co.  v.  Maackens, . 
38  N.  J.  Law,  564;  Wuesthoff  v.  Germania  Life  Ins.  Co.,  107  N.  Y. 
580;   Cannon  v.  Northwestern  Mut.  Life  Ins.  Co.,  29  Hun    (N.  Y.), 
470;  Sheanon  v.  Pacific  Mut.  Life  Ins.  Co.,  83  Wis.  507,  53  N.  W.  878. 

'"O'Conner  v.  Hartford  Fire  Ins.  Co.,  31  Wis.  160;  Roberts  v. 
Northwestern  Nat.  Ins.  Co.,  90  Wis.  210.  Compare  Spaulding  v.  Ver- 
mont Mut.  Fire  Ins.  Co.,  53  Vt.  156. 


518  NOTICE   AND   PROOFS   OF   LOSS.  §  175 

building-  wliicli  is  his  homestead,  and  before  any  loss  oecurs 
he  abandons  his  wife,  she,  and  one  to  whom  the  loss  was  by 
the  terms  of  the  policy  made  payable,  may  make  proofs  of 
loss,  although  the  policy  provides  that  if  it  is  payable  in  case 
of  loss  to  a  third  party  or  held  as  collateral  security,  proofs 
of  loss  shall  be  made  by  the  party  originally  insured. ^^^ 
Proofs  may  be  furnished  by  a  guardian  of  infants  whose 
property  was  insured  and  destroyed  ;^^^  and  when  the  insured 
is  dead,  by  his  heirs  and  legal  representatives. ^^'^ 

Same  —  Mortgagee. 

§  175.  A  mortgagee  entitled  to  the  benefits  of  the  insurance 
may  sometimes  furnish  the  notice  and  proof. 

A  mortgagee  of  insured  property  to  whom  the  loss  is  pay- 
able as  his  interest  may  appear,  may  furnish  proofs  of  loss  if 
the  insured  neglects  and  refuses  so  to  do.^^^  The  New  York 
standard  policy  declares  in  substance  that  no  act  or  neglect  of 
a  mortgagor  shall  defeat  the  insurance  as  to  the  interest  of 
the  mortgagee.  This  does  not  relieve  the  mortgagee  to  whom 
the  loss  is  payable  to  the  extent  of  his  interest,  from  fur- 
nishing proofs  of  loss  if  the  mortgagor  neglects  or  refuses  so 

="'  Warren  v.  Springfield  F.  &  M.  Ins.  Co.,  13  Tex.  Civ.  App.  466,  35 
S.  W.  810. 

"« Monaghan  v.  Agricultural  Fire  Ins.  Co.,  53  Mich.  238,  18  N.  W. 
801;  O'Brien  v.  Phoenix  Ins.  Co.,  76  N.  Y.  459;  Wuesthoff  v.  Ger- 
mania  Life  Ins.  Co.,  107  N.  Y.  580. 

^-'  Farmers'  Mut.  Ins.  Co.  v.  Graybill,  74  Pa.  St.  17,  5  Bennett,  Fire 
Ins.  Cas.  527;  Wilson  v.  Northwestern  Mut.  Ace.  Ass'n,  53  Minn.  470. 

"'Moorf?  V.  Hanover  Fire  Ins.  Co.,  71  Hun  (N.  Y.),  199;  Nlcker- 
son  V.  Nickerson,  80  Me.  100;  Watertown  Fire  Ins.  Co.  v.  Grover  & 
B.  Sewing  Machine  Co.,  41  Mich.  131;  Hibernia  Mut.  Fire  Ins.  Co. 
V.  Meyer,  39  N.  J.  Law,  482;  Armstrong  v.  Agricultural  Ins.  Co.,  56 
Hun  (N.  Y.),  399.  See  State  Ins.  Co.  v.  Maackens,  38  N.  J.  Law, 
564;  Ayres  v.  Hartford  Fire  Ins.  Co.,  17  Iowa,  79. 


§  176  PARTNERSHIP.  619 

to  do.^^^  Proofs  furaislied  by  the  mortgagor  will  inure  to 
the  benefit  of  the  mortgagee.  ^^^  It  has  been  held  that  a  mort- 
gagee to  whom  a  policy  is  payable  as  his  interest  may  appear 
is  the  insured,  within  the  meaning  of  a  condition  of  a  policy 
requiring  the  insured  to  furnish  preliminary  proofs  of  loss.^^^ 

Same  —  Partnership. 

§  176.  They  may  be  furnished  by  any  member  of  an  insured 
firm. 

Where  the  insured  is  a  partnership,  the  proofs  of  loss  signed 
and  sworn  to  by  one  of  the  partners  sufficiently  complies  with 
the  provisions  of  a  policy  that  proofs  of  loss  should  be  signed 
and  sworn  to  by  the  insured,  unless  the  company  promptly 
makes  specific  objection  thereto  on  that  ground. -^^  And  where 
the  insurer  has  waived  the  forfeiture  resulting  from  the  con- 
veyance of  one  partner  to  another,  the  purchasing  partner 
may  make  proofs  of  loss  without  setting  forth  therein  the 
assignment  to  himself  of  the  interest  of  his  co-partner. ^^'^ 
The  mere  addition  of  the  word  "treasurer"  to  the  signature 
of  a  partner  verifying  the  proofs  of  loss  will  not  affect  their 
validity  unless  this  was  done  with  fraudulent  intent,  or  unless 
the  insurer  has  been  misled  to  his  damage  thereby. ^^* 

='='»  Southern  Home  B.  &  L.  Ass'n  v.  Home  Ins.  Co.,  94  Ga.  167,  27 
L.  R.  A.  844.  But  seo  contra.  Dwelling  House  Ins.  Co.  v.  Kansas 
Loan  &  Trust  Co.,  5  Kan.  App.  137,  48  Pac.  891,  26  Ins.  Law  J*  603. 

"» Watertown  Fire  Ins.  Co.  v.  Grover  &  B.  Sewing  Machine  Co.,  41 
Mich.  131.    But  see  State  Ins.  Co.  v.  Maackens,  38  N.  J.  Law,  564. 

"*  Armstrong  v.  Agricultural  Ins.  Co.,  56  Hun,  399,  130  N.  Y.  560; 
Moore  v.  Hanover  Fire  Ins.  Co.,  71  Hun  (N.  Y.),  199;  Nickerson  y. 
Nickerson,  80  Me.  100. 

-"Myers  v.  Council  Bluffs  Ins.  Co.,  72  Iowa,  176,  33  N.  W.  453; 
Marthinson  v.  North  British  &  M.  Ins.  Co.,  64  Mich.  372. 

■^^  Keeler  v.  Niagara  Fire  Ins.  Co.,  16  Wis.  550. 

"^  Karelsen  v.  Sun  Fire  Office.  122  N.  Y.  545. 


520 


NOTICE    AND    PROOFS    OF   LOSS.  §§  177,  178 


Same  —  Assignee. 

§  177.  Andby  one  whose  rights  as  assignee  of  the  policy  have 
been  recognized  by  the  insurer. 

A  pureliaser  of  insured  premises  to  wliom  is  assigned  a 
policy  payable  to  a  specified  mortgagee  as  Ms  interest  may 
appear,  is  tlie  proper  person  to  make  proofs  of  loss,  although, 
he  has  executed  a  deed  to  the  premises  which  is  void  because 
the  grantee  is  not  named  therein.^^*^  Notice  of  loss  given  by 
one  to  whom  the  policy  has  been  assigned  with  the  consent  of 
the  insurer,  is  a  compliance  with  a  condition  that  all  persons 
insured  shall  forthwith  give  notice,  etc.^^^ 

Mutual  Societies. 

The  provisions  of  the  by-laws  of  mutual  insurance  com- 
panies concerning  the  giving  of  proofs  of  loss  are  so  mani- 
fold and  diverse  that  nearly  every  case  is  a  law  unto  itself.  ^^'^ 

Same  —  Creditoes. 

§  178.  A  creditor  of  the  insured  may  furnish  proofs  if  the  in- 
sured neglects  to  do  so. 

Though  the  insured  does  not,  upon  the  happening  o~f  a  loss, 
take  the  necessary  steps  to  perfect  his  right  of  action  against 
the  insurer,  his  claim  may  nevertheless  be  a  valuable  asset 


"'  Westchester  Fire  Ins.  Co.  v.  Jennings,  70  111.  App.  539. 

="  Cornell  v.  Le  Roy,  9  Wend.  (N.  Y.)  163,  1  Bennett,  Fire  Ins.  Cas. 
408;  Keeler  v.  Niagara  Fire  Ins.  Co.,  16  Wis.  550;  Manhattan  Ins. 
Co.  V.  Stein,  5  Bush  (Ky.),  652;  Watertown  Fire  Ins.  Co.  v.  Grover 
&  B.  Sewing  Machine  Co.,  41  Mich.  131;  Cannon  v.  Northwestern 
Mut.  Life  Ins.  Co.,  29  Hun  (N.  Y.),  470;  Smith  y.  Haverhill  Mut. 
Fire  Ins.  Co.,  1  Allen  (Mass.),  297. 

"'Supreme  Council,  C.  B.  L.,  v.  Boyle,  10  Ind.  App.  301;  Anderson 
V.  Supreme  Council,  O.  of  C.  F.,  135  N.  Y.  107;  Young  v.  Grand 
Council,  A.  0.  of  A.,  63  Minn.  506;  Albert  v.  Order  of  Chosen  Friends, 
34  Fed.  721;  Lorscher  v.  Supreme  Lodge,  K.  of  H.,  72  Mich.  316,  40 
N.  W.  545. 


§  178  CREDITORS. 


621 


subject  to  attacliinent  or  ganiisliment  by  bis  creditors;  and 
if  be  fails  to  furnisb  notice  or  proofs  as  required  by  tbe 
policy,  an  attacliing  or  garnisbing  creditor  may  in  some  cases 
supply  tbe  omission.  Mucb  depends  upon  tbe  requirement 
of  tbe  policy  and  tbe  interpretation  of  tbe  statute  under  wbi(5b 
a  creditor  is  proceeding.  In  Texas  it  bas  been  beld  tbat  wbere 
a  policy  contains  a  stipulation  tbat  proofs  of  loss  must  be 
made  before  tbe  insurer  can  be  beld  bound  to  pay,  no  suit 
-can  be  maintained  under  tbe  policy  until  tbe  required  proofs 
are  furaisbed ;  yet  in  sucb  cases  a  writ  of  garnisbment  may 
issue  at  tbe  instance  of  a  creditor  of  tbe  insured,  tbe  same 
being  not,  strictly  speaking,  a  suit,  but  process  autborized  by 
■statute  to  discover  wbetber  some  debt  or  obligation  exists, 
thougb  not  yet  matured ;  and  tbereafter  tbe  attacbing  creditor 
may  make  tbe  preliminary  proofs  and  enforce  wbatever  claims 
may  exist  in  favor  of  tbe  debtor  and  against  tbe  insurer.^^^ 
But  in  Maine,  tbe  rule  is  tbat  wbere  tbe  policy  requires  notice 
and  proofs  of  loss  to  be  given  before  tbe  claim  matures,  tbe 
claim  is  contingent  until  sucb  notice  is  given  and  sucb  proofs 
are  furnisbed,  and  tbe  insurer  cannot  be  cbarged  as  trustee 
of  tbe  insured  in  a  suit  begun  after  tbe  loss  but  before  notice 
and  proofs  are  served.^^a  ^^  insurer  may  waive  tbe  fur- 
nisbing  of  proofs  of  loss  in  favor  of  a  garnisbing  creditor 
of  tbe  insured  witbout  tbe  insured  taking  any  part  in  tbe 
waiver  or  baving  any  knowledge  tbereof .^^^^  A  federal  court 
bas  beld  tbat  a  waiver  of  proofs  in  favor  of  a  insured  debtor 
inures  to  tbe  benefit  of  a  garnisbing  creditor,  and  tbat  if  at  tbe 

=^  Phoenix  Ins.  Co.  v.  Willis,  70  Tex.  12;  Northwestern  Ins.  Co.  v.. 
Atkins,  3  Bush  (Ky.),  333. 

""Davis  V.  Davis,  49  Me.  282.  The  Maine  statute  read:  "No  per- 
son shall  he  adjudged  trustee  unless,  at  the  time  of  the  service  of  the 
writ  upon  him,  it  [the  money]  is  due  absolutely  and  not  upon  any 
contingency. 

"'»  Ritter  v.  Boston  Underwriters'  Ins.  Co.,  28  Mo.  App.  140. 


522  KOTICE   AND   PftOOFS    OF   LOSS.  §  IT^ 

time  process  of  garnlslmient  was  served  upon  tlie  insurer  it 
had  waived  the  furnishing  of  proofs  of  loss,  then  the  garnish- 
ment action  could  be  maintained,  otherwise  it  could  not  be 
maintained.  ^^^^ 

To  Wnoir  Given". 

§  179.  Notice  and  proofs  must  be  served  on  the  insurer  at  its 
offlee,  or  upon  some  managing  or  general  agent.  Service  on  a 
local  agent  is  insufficient. 

Notice  and  proofs  are  served  upon  the  insurer  only  when 
they  are  delivered  to  it  at  its  home  office,  or  to  some  general 
or  managing  agent,  or  to  some  agent  or  officer  expressly  or 
impliedly  authorized  to  receive  them.  Service  according  to 
the  terms  of  the  policy  is  always  sufficient;  likewise  service 
upon  any  agent  of  limited  powers  provided  they  are  forwarded 
to  the  insurer  before  the  expiration  of  the  time  fixed  for  their 
service.  Any  service,  however  imperfect,  which  the  insurer 
acquiesces  in  and  acts  upon,  is  sufficient.^'**' 

The  provisions  of  a  policy  requiring  notice  of  loss  to  be 
given  to  the  secretary  of  the  insurer  in  writing,  is  complied 
with  by  giving  notice  to  the  company  itself.^'*^  Notice  given 
to  a  director  of  an  insurance  company  is  not  compliance  with 
a  provision  requiring  it  to  be  given  to  the  "secretary  or  some 
authorized  officer."  ^"^^     If  the  policy  requires  notice  to  be 

23Bb  Lovejoy  v,  Hartford  Fire  Ins.  Co.,  11  Fed.  63.  See,  also,  Girard 
F.  &  M.  Ins.  Co.  V.  Field,  45  Pa.  St.  129.  Compare  Martz  v.  Detroit 
F.  &  M.  Ins.  Co.,  28  Mich.  201. 

=*»  Minneapolis,  St.  Paul  &  S.  S.  M.  Ry.  Co.  v.  Home  Ins.  Co.,  64 
Minn.  69;  Travellers'  Ins.  Co.  v.  Edwards,  122  U.  S.  457;  Rokes  v. 
Amazon  Ins.  Co.,  51  Md.  512,  and  cases  infra;  German  Ins.  Co.  v. 
Ward,  90  111.  550;  Badger  v.  Phoenix  Ins.  Co.,  49  Wis.  396. 

'^^  Lewis  V.  Burlington  Ins.  Co.,  80  Iowa,  259,  45  N.  W.  749; 
Scheiderer  v.  Travelers'  Ins.  Co.,  58  Wis.  13,  16  N.  W.  47;  Herron  v. 
Peoria  M.  &  F.  Ins.  Co.,  28  111.  235;  Excelsior  Mut.  Aid  Ass'n  v.  Rid- 
dle, 91  Ind.  85. 

=*=  Inland  Insurance  &  Deposit  Co.  v.  Stauffer,  33  Pa.  St.  397. 


§  179  TO    WHOM    GIVEN.  523 

given  to  the  secretary  of  the  company,  notice  given  to  another 
agent  is  insufficient. ^^^  A  provision  for  notice  to  be  sent 
"to  the  company  at  Hartford,"  and  proofs  "to  be  furnished," 
does  not  require  that  the  proofs  shall  be  sent  to  liartford.^^* 
Service  made  upon  an  adjusting  agent  who  has  had  charge 
of  the  loss,  is  good  if  he  forwards  them  to  the  company  and  no 
other  or  further  proofs  are  demanded. ^^^  Service  upon  any 
agent  who  for^vards  them  to  his  principal  is  good.^^^^ 

Proofs  of  loss  under  a  Lloyd's  policy  are  properly  served 
at  the  office  of  the  association  on  persons  openly  allowed  to 
hold  themselves  out  as  its  authorized  attorneys  in  fact,  not- 
withstanding great  irregularity  in  their  appointment.  ^^*^  Ser- 
vice on  its  general  agent  is  seiwice  on  the  insurer.^^^ 

Under  the  provisions  of  an  application  for  insurance  that 
any  claim  under  the  policy  must  be  made  at  the  company's 
home  office  or  (at  the  option  of  the  company)  at  the  general 
agency  through  which  the  policy  was  issued,  notice  given 

"'Rokes  V.  Amazon  Ins.  Co.,  51  Md.  512;  Connell  v.  Milwaukee 
Mut.  Fire  Ins. 'Co.,  18  Wis.  407. 

"^  Scheiderer  v.  Travelers'  Ins.  Co.,  58  Wis.  13. 

==«  Brock  V.  Des  Moines  Ins.  Co.,  lOG  Iowa,  30,  75  N.  W.  683. 

=«''  Argall  V.  Old  North  State  Ins.  Co.,  84  N.  C.  355;  Milwaukee  Me- 
chanics' Ins.  Co.  V.  Winfield,  6  Kan.  App.  527,  51  Pac.  567;  Willis  v. 
Germania  Fire  Ins.  Co.,  79  N.  C.  285;  Loeb  v.  American  Cent.  Ins. 
Co.,  99  Mo.  50;  Watertown  Fire  Ins.  Co.  v.  Grover  &  B.  Sewing  Ma- 
chine Co.,  41  Mich.  131,  1  N.  W.  961;  Brink  v.  Hanover  Fire  Ins.  Co., 
70  N.  Y.  593;  Hibernia  Mut.  Fire  Ins.  Co.  v.  Meyer,  39  N.  J.  Law, 
482;  Travellers'  Ins.  Co.  v.  Edwards,  122  U.  S.  457. 

""  Ralli  v.  White,  21  Misc.  Rep.  285,  47  N.  Y.  Supp.  197. 

■■•'■"  Insurance  Co.  of  North  America  v.  McLimans,  28  Neb.  653,  44 
N.  W.  991;  North  British  &  Mercantile  Ins.  Co.  v.  Crutchfield,  108 
Ind,  518;  Brink  v.  Hanover  Fire  Ins.  Co.,  70  N.  Y.  593. 

Where  the  policy  stipulates  that  proofs  shall  be  given  to  ths  com- 
pany at  its  office  or  to  an  agent  in  the  state,  proof  made  to  a  general 
adjuster  of  a  foreign  company  who  is  engaged  in  adjusting  that  par- 
ticular loss  is  sufficient  without  also  making  it  to  the  home  office. 
Merchants'  &  Mechanics'  Ins.  Co.  v.  Vining,  67  Ga.  661. 


52  i  NOTICE    AND   PROOFS    OF   LOSS.  §  1T9 

to  any  general  agent  of  the  insurer  is  sufficient.^^^  A  require- 
ment that  "notice  shall  be  given  to  the  secretary  of  the 
company  within  twenty  days  after  loss  or  damage,"  is  not 
complied  with  by  giving  verbal  notice  to  the  local  agent  within 
that  time,  and  after  the  expiration  of  the  twenty-  days  giving 
written  notice  to  the  secretary.^^^  Both  reason  and  the  weight 
of  authority  deny  the  validity  of  service  of  either  notice  or 
]>roofs  of  loss  upon  a  merely  local  agent,  when  the  policy  re- 
quires service  to  be  made  upon  the  insurer. ^^*^ 

In  1883,  Pennsylvania  passed  a  law  to  the  effect  that  notice 
und  proofs  of  loss  may  be  given  to  an  insurer  at  its  general 
office  or  to  the  agent  who  countersigns  the  policy.  Prior  to 
that  time  sendee  on  local  agents  was  held  not  good  in  that 

"'  Pennington  v.  Pacific  Mut.  Life  Ins.  Co.,  85  Iowa,  468,  52  N.  W. 
482. 

"'  Connell  v.  Milwaukee  Mut.  Fire  Ins.  Co.,  18  Wis.  407. 

^"' Ermentront  v.  Girard  F.  &  M.  Ins.  Co.,  63  Minn.  311;  Lohnes  v. 
Insurance  Co.  of  North  America,  121  Mass.  439;  Smith  v.  Niagara 
Fire  Ins.  Co.,  60  Vt.  682;  Bush  v.  Westchester  Fire  Ins.  Co.,  63  N.  Y. 
531;  Edwards  v.  Lycoming  Co.  Mut.  Ins.  Co.,  75  Pa.  St.  378;  Enge- 
bretson  v.  Hekla  Fire  Ins.  Co.,  58  Wis.  301.  See  post,  "Who  Can 
Waive  Proofs."  See,  also,  on  this  question.  Insurance  Co.  of  North 
America  v.  McDowell,  50  111.  120;  Rokes  v.  Amazon  Ins.  Co.,  51  Md. 
512;  Excelsior  Mut.  Aid  Ass'n  v.  Riddle,  91  Ind.  84;  Young  v.  Trav- 
elers' Ins.  Co.,  80  Me.  244;  Hartford  Fire  Ins.  Co.  v.  Smith,  3  Colo. 
422;  Bennett  v.  Maryland  Fire  Ins.  Co.,  14  Blatchf.  422,  Fed.  Cas. 
No.  1,321;  North  British  Ins.  Co.  v.  Crutchfield,  108  Ind.  518;  Green- 
lee V.  Iowa  State  Ins.  Co.,  102  Iowa,  260;  Fisher  v.  Crescent  Ins.  Co., 

53  Fed.  544;  McCullough  v.  Phcenix  Ins.  Co.,  113  Mo.  607. 

But  an  insurance  company  cannot  take  advantage  of  the  failure 
of  insured  to  furnish  proofs  of  loss,  where  such  failure  was  due  to 
the  action  of  the  agent  of  the  company  who  issued  the  policy,  in  tak- 
ing advantage  of  the  ignorance  or  the  inability  of  the  assured  to 
read.  McGuire  v.  Hartford  Fire  Ins.  Co.,  7  App.  Div.  575,  40  N.  Y. 
Supp.  300,  even  though  the  policy  may  contain  express  restrictions 
en  the  agent's  powers,  O'Brien  v.  Ohio  Ins.  Co.,  52  Mich.  131;  Fire 
Ass'n  of  Philadelphia  v.  Jones  (Tex.  Civ.  App.),  40  S.  W.  44. 


§  180  MANNER   OF    SERVICE.  525 

state. ^^^  Where  a  policy  is  issued  by  two  companies  unrler  a 
joint  name,  providing  for  several  liability,  and  notice  of  los& 
to  each,  it  is  sufficient  to  furnish  the  notice  to  the  secretary 
of  the  joint  business. ^^^ 

Manner  of  Service. 

§  180.  Notice  or  proofs  of  loss  are  hot  served  upon  the  in- 
surer until  they  are  actually  received  by  it.  If  the  policy  re- 
quires service  upon  the  insurer  at  a  particular  place,  that  con- 
dition must  be  observed.  The  law  presumes  that  letters  prop- 
erly addressed,  stamped  and  mailed  will  reach  their  destination 
in  the  due  course  of  mail  service. 

One  of  the  purposes  of  the  stipulations  of  a  policy  concern- 
ing notice  and  proofs  is  to  provide  the  insurer  with  actual 
knowledge  of  the  designated  facts,  and  this  the  insured  usually 
obligates  himself  absolutely  to  do.  Thougli  unrestricted  in 
liis  choice  of  means  of  doing  it — save  as  particularly  specified 
in  the  policy  itself — the  risk  of  a  failure  is  wholly  his  and 
not  that  of  the  insurer.  Nothing  less  than  actual  reception 
by  the  insurer,  wdthin  the  time  limited,  of  the  prescribed  in- 
formation will  satisfy  the  ordinary  requirements  of  the  con- 
tract in  this  regard.  As  a  matter  of  evidence,  proof  that  a 
letter  properly  addressed  to  the  insurer  at  its  usual  place  of 
business,  with  postage  prepaid,  was  duly  mailed,  will  raise 
a  presumption  that  it  was  carried  by  due  course  of  mail  and 
was  delivered  and  received  in  the  usual  and  regular  time  of 
postal  communication  between  the  place  of  sending  and  the 
place  to  which  the  letter  was  addressed.  But  tliis  is  a  mere 
presumption  of  fact  liable  to  be  rebutted  or  overcome  by 
evidence  that  the  letter  was  never  in  fact  received.     And  if  the- 

"1  Welsh  V.  London  Assiir.  Corp.,  151  Pa.  St.  607;  Trask  v.  State  F. 
&  M.  Ins.  Co.,  29  Pa.  St.  198. 

-■^Minnock  v.  Eureka  F.  &  M.  Ins.  Co..  90  Mich.  236,  51  N.  W.  367; 
Bernero  v    South  British  &  Nat.  Ins.  Co.,  65  Cal.  386. 


526  NOTICE   AND   PKOOFS    OF   LOSS.  §  181 

evidence  be  conflicting  as  to  wliether  the  letter  was  received, 
or  as  to  the  date  of  its  receipt,  these  questions  must  he  deter- 
mined as  any  other  questions  of  fact.^^^  So  where  a  policy 
requires  that  the  proofs  of  loss  shall  be  given  to  the  insurer 
in  the  citv  of  its  residence  or  in  which  it  has  its  principal 
place  of  business,  the  mailing  to  the  insurer  of  proofs  which 
are  never  received  is  not  a  compliance  with  the  conditions. ^^"^ 
And  a  mistake  of  the  insured  in  misdirecting  proofs  of  loss 
mailed  by  him  to  the  company,  resulting  in  the  company  not 
receiving  the  proofs  until  after  the  expiration  of  the  period 
within  which  they  were  required  to  be  furnished,  is  fatal  to 
his  right  to  recover  on  the  policy.  ^^^ 

The  mailing  of  proofs  of  loss  within  sixty  days  has  been 
held  a  substantial  compliance  with  a  condition  of  a  policy 
that  the  insured  shall  "render  a  statement  to  the  company'' 
within  such  time.^^^  A  registered  letter  duly  sent  and  ten- 
dered to  the  addressee,  who  refuses  to  receive  it,  must  be  con- 
sidered to  have  reached  him.^^^ 

Peoofs  as  Evidence. 

§  181.  Statements  contained  in  proofs  of  loss  are  not  always 
conclusive  upon  the  claimant.  They  are  not  evidence  in  his 
favor.  They  may  be  used  by  the  insurer  as  evidence  in  the 
nature  of  admissions  against  the  claimant. 

2=' Pennypacker  v.  Capital  Ins.  Co.,  80  Iowa,  56,  45  N.  W.  408;  Dade 
V.  Aetna  Ins.  Co.,  54  Minn.  337;  British  &  American  Tel.  Co.  v.  Col- 
son,  L.  R.  6  Exch.  108;  Susquehanna  Mut.  Fire  Ins.  Co.  v.  Tunkhan- 
nock  Toy  Co.,  97  Pa.  St.  424;  Engebretson  v.  Hekla  Fire  Ins.  Co.,  58 
Wis.  301;  Hodgkins  v.  Montgomery  Co.  Mut.  Ins.  Co.,  34  Barb.  213, 
4J  N.  Y.  620;  Badger  v.  Glens  Falls  Ins.  Co.,  49  Wis.  389,  5  N.  W.  845. 

«"  Central  City  Ins.  Co.  v.  Gates,  86  Ala.  559. 

==  ■  Maddox  v.  Dwelling  House  Ins.  Co.,  56  Mo.  App.  343.  See  as  to 
computation  of  time,  Badger  v.  Glens  Falls  Ins.  Co.,  49  Wis.  389,  5 
N.  W.  845. 

""  Manufacturers'  &  M.  Mut.  Ins.  Co.  v.  Zeitinger,  168  111.  286,  48 
N.  E.  179. 

"'  American  Cent.  Ins.  Co.  v.  Simpson,  43  111.  App.  98. 


§  181  PROOFS  AS  EVIDENCE.  527 

Tlie  proofs  of  loss  stipulated  for  in  an  insurance  policy  arc 
no  part  of  the  contract  of  insurance,  nor  do  they  of  them- 
selves create  any  liability  in  favor  of  the  insured  nor  against 
the  insurer.  They  merely  serve  to  fix  the  time  or  circum- 
stances under  which  a  loss  shall  become  payable  and  when  an 
action  may  be  maintained  to  enforce  a  liability.  Proof  of 
their  service  merely  shows  an  actual  or  attempted  compliance 
with  the  requirements  of  the  policy.  ^^^  But  a  statement  in 
the  certificate  of  a  magistrate  that  he  is  not  interested  in  the 
loss  is  prima  facie  evidence  of  the  fact  of  his  disinterested- 
ness.^^^ Secondary  evidence  of  the  contents  of  proof  of  loss 
is  admissible,  when  the  defendant,  having  possession  of  the 
original,  fails  to  produce  it  after  notice  to  produce  is  prop- 
erly given. ^^"  Representations  made  in  proofs  of  loss  or 
death  as  to  the  manner  and  attending  circumstances  are  in- 
tended for  the  information  of  the  insurance  company,  which 
has  a  right  to  rely  upon  their  truth ;  and  the  party  making 
them  must  be  held  to  them,  until  it  is  shown  that  they  were 
made  under  misapprehension  of  the  facts  or  in  ignorance  of 
material  matters  subsequently  ascertained.  The  true  rule  upon 
this  subject  is  that  statements  contained  in  proofs  of  loss  con- 
cerning material  matters  are  binding  and  conclusive  upon  the 
party  who  makes  them,  until  by  pleading,  or  otherwise,  he 
gives  the  insurance  company  reasonable  notice  that  he  was 
mistaken  in  his  statements  and  that  he  will  endeavor  to  show 
that  the  death  or  loss  was  the  result  of  a  different  cause  or 
that  surroimding  circumstances  were  different  from  those 
stated  in  the  proofs.  After  the  insurance  company  has  had 
due  notice  of  these  facts  and  this  intention,  the  proofs  have 
the  probative  force  of  solemn  admissions  under  oath  against 

"'Rheims  v.  Standard  Fire  Ins.  Co.,  39  W.  Va.  672. 
"'Cornell  v.  Le  Roy,  9  Wend.  (N.  Y.)  163. 
=""  Union  Ins.  Co.  v.  Smith,  124  U.  S.  405. 


528  NOTICE    AND   PKOOFS    OF    LOSS.  §  181 

interest,  but  tliey  are  not  conclusive.  """^  Thus,  an  incorrect 
statement  of  facts  inadvertently  made  by  the  insured  in  his 
proofs  of  loss  may  be  corrected  and  explained  by  the  parol 
testimony  upon  the  trial  of  the  case,  where  the  same  explana- 
tion has  been  given  in  substance  by  the  insured  to  the  insurer 
prior  to  the  institution  of  the  suit.-*^^  And  v^here  a  policy  re- 
quires the  furnishing  of  proofs  of  death  of  the  insured,  but 
does  not  state  what  such  proofs  must  contain,  a  claimant  is  not 
bound  by  the  statements  made  in  his  proofs  as  to  the  cause 
and  manner  of  death.     Such  statements  are  evidence  in  the 

'"'  Travelers'  Ins.  Co.  v.  Melick  (C.  C.  A.),  65  Fed.  178;  Cochran  v. 
Mutual  Life  Ins.  Co.,  79  Fed.  46;  Insurance  Co.  v.  Newton,  22  Wall. 
(U.  S.)  32;  Keels  v.  Mutual  Reserve  Fund  Life  Ass'n,  29  Fed.  198; 
McMaster  v.  Insurance  Co.  of  North  America,  55  N.  Y.  222;  Parmelee 
v.  Hoffman  Fire  Ins.  Co.,  54  N.  Y.  193;  Campbell  v.  Charter  Oak  F. 
&  M.  Ins.  Co.,  10  Allen  (Mass.),  213;  Irving  v.  Excelsior  Fire  Ins. 
Co.,  1  Bosw.  (N.  Y.)  507. 

In  Campbell  v.  Charter  Oak  F.  &  M.  Ins.  Co.,  supra,  there  was  a 
misstatement  of  fact  in  the  proofs,  which  showed  the  policy  forfeited. 
Tbe  supreme  court  of  Massachusetts  said:  "A  true  statement  [of  the 
conditions]  was  called  for  by  the  *  *  *  policy.  It  was  a  condi- 
tion precedent  to  the  liability  to  be  called  upon  to  pay  the  loss.  If 
this  be  rejected  as  being  a  false  statement,  then  no  statement  has 
been  filed,  and  for  that  reason  the  plaintiff  cannot  recover.  If  al- 
lowed to  stand  as  a  part  of  the  statement,  the  policy  had  been 
avoided.  *  *  *  The  defendants  might  properly  rely  upon  the 
statement  of  the  insured  formally  made  under  the  provisionsin  the 
policy,  at  least  until  notice  of  such  mistake;  and  an  amendatory 
statement  ought  to  be  filed  before  instituting  an  action  upon  the 
policy.  *  *  *  -^g  ^Q  -QQi-  mean  to  say  that  the  party  may  not  correct 
mistakes  of  fact  in  his  original  statement,  but  such  corrections  are 
not  for  the  first  time  to  be  made  known  to  the  insurers  at  the  trial  of 
the  action  to  recover  for  the  loss  by  the  introduction  of  evidence 
showing  that  the  statements  filed  were  not  true  in  a  material  fact, 
v.'hich,  if  it  existed  as  stated,  was  fatal  to  the  right  of  the  insured  to 
recover."  West  v.  British  America  Assur.  Co.  (U.  S.  Cir.  Ct.),  25 
Ins.  Law  J.  689. 

^«' Hanover  Fire  Ins.  Co.  v.  Lewis,  28  Fla.  209,  10  So.  297;  Fisher 
V.  Fidelity  Mut.  Life  Ass'n,  188  Pa.  St.  1;  Waldock  v.  Springfield  F. 
&  M.  Ins.  Co.,  53  Wis.  129. 


§  181  PROOFS   AS  .EVIDENCE.  529 

nature  of  admissions  against  the  claimant,  but  when  made 
under  an  honest  misapprehension  of  the  facts  may  be  ex- 
plained, and  the  true  facts  may  be  shown.  When  no  evidence 
is  offered  to  contradict  the  statements  in  the  proofs,  they  are 
taken  as  conclusive  against  the  claimant.  They  are  not  evi- 
dence in  his  favor. 2^^  An  honest  mistake  of  the  insured  in 
stating  in  his  proofs  of  loss  that  the  fire  originated  from  the 
use  of  benzine,  does  not  prevent  him  upon  the  trial  from  pro- 
ducing evidence  of  the  actual  facts  and  explaining  the  mistake 
and  the  reasons  for  it.^*^^ 

Proofs  of  loss  stating  suicide  as  the  cause  of  death,  although 
admissible  to  show  the  fact  of  their  service,  are  not  conclusive 
against  the  plaintiff  in  an  action  on  a  life  insurance  policy. ^^^ 
One  may  show  that  the  loss  was  greater  or  less  than  stated  in 
the  proofs,  and  that  it  embraced  articles  not  included  therein, 
unless  by  his  acts,  conduct  or  declarations,  it  is  against  good 
conscience  that  he  should  be  permitted  to  show  the  truth,  or 
unless  otherwise  stipulated  in  the  policy.     In  order  to  pre- 

=''"  Beckett  v.  Northwestern  Masonic  Aid  Ass'n,  67  Minn.  298;  Na- 
tional Life  Ass'n  v.  Sturtevant,  78  Hun  (N.  Y.),  572;  Schmitt  v.  Na- 
tional Life  Ass'n,  84  Hun  (N.  Y.),  128;  Cole  v.  Manchester  Fire 
Assur.  Co.,  188  Pa.  St.  345;  Travelers'  Ins.  Co.  v.  Melick  (C.  C.  A.), 
65  Fed.  178;  Hanna  v.  Connecticut  Mut.  Life  Ins.  Co.,  150  N.  Y.  526; 
Hiles  V.  Hanover  Fire  Ins.  Co.,  65  Wis.  585. 

=«  White  V.  Royal  Ins.  Co.,  8  Misc.  Rep.  613,  29  N.  Y.  Supp.  323; 
Enos  V.  St.  Paul  F.  &  M.  Ins.  Co.,  4  S.  D.  639,  57  N.  W.  919;  Republic 
Fire  Ins.  Co.  v.  Weides,  14  Wall.  (U.  S.)  375;  Maher  v.  Hibernia  Ins. 
Co.,  67  N.  Y.  283;  Balestracci  v.  Firemens'  Ins.  Co.,  34  La.  Ann.  844; 
Farmers'  Mut.  Fire  Ins.  Co.  v.  Gargett,  42  Mich.  289;  Jersey  City 
Ins.  Co.  V.  Nichol,  35  N.  J.  Eq.  291;  Schuster  v.  Dutchess  County  Ins. 
Co.,  102  N.  Y.  260. 

=«'Leman  v.  Manhattan  Life  Ins.  Co.,  46  La.  Ann.  1189,  24  L.  R,  A. 
589;  Travelers'  Ins.  Co.  v.  Melick,  27  U.  S.  App.  547,  65  Fed.  178,  27 
L.  R.  A.  629;  John  Hancock  Mut.  Life  Ins.  Co.  v.  Dick,  117  Mich.  518. 
76  N.  W.  9,  44  L.  R.  A.  846.  (The  notes  given  by  the  editor  of  the 
Lawyers'  Reports  Annotated  to  this  last  case  are  very  full  and  com- 
plete.) 

KERR.  INS.— 34 


530  NOTICE    AND   PROOFS    OF    LOSS.  §  181 

elude  him,  tlie  opposite  party  must  have  done  some  act  or 
changed  his  situation  in  reliance  upon  the  statement  or  con- 
duct of  the  party  to  be  estopped.  ^^^  But  if  the  insured,  with 
intent  to  defraud  the  insurer,  overstates  the  amount  of  the  loss, 
he  will  be  bound  by  his  proofs,  and  under  many  policies  will 
forfeit  all  his  rights.  ^^''^ 

The  affidavits  of  the  attending  physicians  as  to  the  cause 
of  death  of  one  insured,  made  on  blanks  furnished  by  the 
insurer  and  forwarded  with  proofs  of  death,  do  not  conclude 
the  beneficiary  as  to  the  cause  of  death. ^^^  And  it  has  even 
been  held  that  the  statements  of  the  attending  physician  fur- 
nished with  proofs  of  death  according  to  the  terms  of  the 
policy,  are  not  evidence  in  favor  of  either  party  in  an  action 
upon  the  policy;  and  this  upon  the  ground  that  the  insured 
was  compelled  by  the  policy  to  furnish  a  certificate,  and  in 
complying  with  that  requirement  of  the  policy  he  did  not 
vouch  for  the  absolute  truth  of  the  opinions  or  ideas  of  the 
physician,  and  that  statements  made  by  the  physician  stoo<i 
upon  a  different  footing  from  the  statements  made  by  the 
claimant  himself.^^^  Statements  in  proofs  of  death  made  by 
the  physician  of  the  insured  as  to  previous  complaints  and 
ailments  of  the  insured  are  "privileged  communications" 
Avithin  the  statutory  definition  of  that  term,  and  are  not  admis- 
sible to  show  that  the  answers  made  by  the  insured  to  certain 

^«'  Schmidt  v.  City  &  Village  Fire  Ins.  Co.,  55  Mich.  432,  21  N.  W. 
877;  Corkery  v.  Security  Fire  Ins.  Co.,  99  Iowa,  382,  68  N.  W.  792; 
Town  V.  Springfield  F.  &  M.  Ins.  Co.,  145  Mass.  582;  Rafel  v.  Nash- 
ville M.  &  F.  Ins.  Co.,  7  La.  Ann.  244;  Crittenden  v.  Springfield  F.  & 
M.  Ins.  Co.,  85  Iowa,  652;  Aetna  Ins.  Co.  v.  Stevens,  48  111.  31;  Young 
V.  Travelers'  Ins.  Co.,  80  Me.  244. 

^"Sleeper  v.  N.  H.  F.  Ins.  Co.,  56  N.  H.  401;  Huchberger  v.  Home 
Fire  Ins.  Co.,  5  Biss.  106,  Fed.  Cas.  No.  6,821;  cases  cited  supra.  See 
also,  post,  §  182,  "False  Swearing." 

=•«  Bentz  V.  Northwestern  Aid  Ass'n,  40  Minn.  202,  2  L.  R.  A.  784. 

="»Helwig  v.  Mutual  Life  Ins.  Co.,  58  Hun  (N.  Y.).  366. 


§  182  FRAUD,  MISREPRESENTATIONS,  ETO.  531 

questions  in  his  application  for  the  insurance  were  false,  but 
they  are  competent  evidence  as  an  admission  by  plaintiff  of  the 
cause  of  death  of  the  insured ;  beyond  this,  they  do  not  bind 
him. 2^^  A  condition  in  a  policy  of  life  insurance  that  all  the 
contents  of  the  proof  of  death  furnished  to  the  company  shall 
be  evidence  of  the  facts  therein  stated  in  behalf  of  the 
company  but  not  against  it,  is  valid,  and  the  statements  of 
the  physician  made  in  proofs  furnished  under  such  a  policy 
are  evidence  against  the  party  furnishing  the  proofs,  and  are 
not  subject  to  the  objection  that  they  are  privileged  state- 
ments. ^^^ 

Fraud,  Misrepresen'tation's,  aistd  False  Savearing. 

§  182.  An  honest  misstatement  of  facts  in  proofs  of  loss  does 
not  prevent  a  recovery. 

False  and  fraudulent  statements  and  misrepresentations 
made  by  a  claimant  in  his  proofs  of  loss  will  defeat  recovery 
only  when  such  a  result  is  stipulated  for  in  the  policy. 

Whether  mistakes  were  made  honestly  or  with  fraudulent 
intent  is  to  be  determined  as  a  question  of  fact. 

Fraudulent  statements  and  overvaluation  do  not  usually 
affect  the  rights  of  a  claimant  under  a  valued  policy  covering 
only  realty;  even  though  the  policy  provides  for  forfeiture  for 
fraud  or  false  swearing. 

Generally. 

False  and  fraudulent  statements  or  representations  con- 
tained in  proofs  of  loss  furnished  in  accordance  with  the  con- 
ditions of  the  policy,  do  not  forfeit  the  rights  of  the  insured 

*"  Dreier  v.  Continental  Life  Ins.  Co.,  24  Fed.  670.  See,  also,  Red- 
mond V.  Industrial  Ben.  Ass'n,  78  Hun  (N.  Y.),  105;  Connecticut 
Mut  Life  Ins.  Co.  v.  Siegel,  9  Bush  (Ky.),  450;  Day  v.  Mutual  Ben. 
Life  Ins.  Co.,  1  MacArthur,  D.  C.  598;  Davey  v.  Aetna  Life  Ins.  Co., 
20  Fed.  482. 

*"  Proppe  V.  Metropolitan  Life  Ins.  Co.,  13  Misc.  Rep.  266,  34  N.  Y. 
Supp.  172;  Howard  v.  Metropolitan  Life  Ins.  Co.,  18  Misc.  Rep.  74, 
41  N.  Y.  Supp.  33. 


532  NOTICE   AND    PKOOFS   OF    LOSS.  §  182^ 

unless  the  policy  so  provides.  Perjur}^  or  fraud  of  a  claim- 
ant subsequent  to  tlie  making  of  the  contract  does  not  operate 
retrospectively  to  destroy  its  original  validity  unless  so  stipu- 
lated.^'^^  But  it  has  been  held,  that  where  the  insured  is  re- 
quired to  furnish  a  true  statement  of  and  concerning  his  loss 
as  a  condition  precedent  to  any  liability  on  the  part  of  the- 
insurer,  the  furnishing  of  such  a  statement  is  imperative,  and 
that  if  the  statement  furnished  be  rejected  as  false,  the  plain- 
tiff cannot  recover.^'^^  Many  policies  provide  that  any  fraud, 
or  attempt  at  fraud,  or  any  misrepresentations  in  proofs  of 
loss  or  in  examination  of  the  claimant  under  oath,  or  any 
false  swearing,  will  work  a  forfeiture  of  all  claims.  Of  this 
kind  of  policies  I  now  speak.  These  provisions  are  reasonable 
and  valid.  Their  effect  is  to  create  conditions  subsequent 
inuring  to  the  benefit  of  the  insurer,  upon  Avhom  it  devolves  to 
plead  the  existence  of  the  provisions  (if  they  do  not  already 
appear  from  the  pleadings  of  the  adversary)  and  to  prove  the 
facts  which  make  them  operative.  Whether  any  of  sucli 
provisions  have  been  violated  is  to  be  determined  as  a  question 
of  fact.  The  defense  of  false  swearing  or  fraud  is  not  estab- 
lished unless  it  appears  that  the  statement  made  was  false  and 
was  made  with  knowledge  that  it  was  false  and  with  intent 
thereby  to  defraud.  A  false  answer  as  to  any  material  matter, 
knowingly  and  wilfully  made,  with  intent  to  deceive  the  in- 
surer, would  be  fraudulent.  And  if  the  matter  were  material 
and  the  statement  false,  to  the  knowledge  of  the  party  making 
it,  and  were  wilfully  made,  the  Intention  to  deceive  the  in- 
surer will  be  conclusively  presumed.     Where  one  has  made  a 

"'Phoenix  Ins.  Co.  v.  Moog,  78  Ala.  284;  Bowen  v.  National  Life 
Aps'n,  63  Conn.  460. 

"'Campbell  v.  Charter  Oak  F.  &  M.  Ins.  Co.,  10  Allen  (Mass.J,  218. 
See  ante,  note  261.  Irving  v.  Excelsior  Fire  Ins.  Co.,  1  Bosw> 
(N.  Y.)  507.    See  ante,  "Proofs,  as  Evidence." 


§   182  FKAUD,  MISREPRESENTATIONS,  ETC.  533 

false  representation  or  statement  knowing  it  to  be  false,  tlie 
law  infers  that  lie  did  it  with  the  intention  to  deceive. ^'^'^  In 
the  absence  of  any  stipulation  to  the  contrary,  all  rights  of  a 
mortgagee  or  other  person  holding  a  beneficial  interest  in  the 
policy  are  governed  by  the  same  conditions  as  the  rights  of  the 
insured.  ^^^  There  can  be  no  recovery  on  a  policy  of  in- 
surance issued  to  several  persons  jointly,  where  one  of  them, 
in  violation  of  its  conditions,  made  false  statements  in  the 
proofs  of  loss  upon  which  the  right  of  recovery  is  based,  ^'^'^ 

Where  a  policy  provides  that  it  shall  be  void  in  case  of  the 
fraud  or  false  swearing  of  the  insured  touching  any  matter 
relating  to  the  insurance  or  the  subject  thereof,  whether  be- 
fore or  after  the  loss,  the  wilful  false  swearing  by  the  insured 
to  a  material  matter  on  his  examination  before  a  notary  pub- 
lic or  magistrate  after  a  loss,  forfeits  the  whole  amount  due 
and  not  merely  the  amount  due  on  a  particular  item  of  dam- 
age or  for  the  loss  of  a  particular  article  to  which  the  false 
statement  relates.  ^'''^     Fraud  which  does  not  come  within  the 

''"Claflin  V.  Commonwealth  Ins.  Co.,  110  U.  S.  81;  Lord  v.  God- 
dard,  13  How.  (U.  S.)  198;  Dohmen  Co.  v.  Niagara  Fire  Ins.  Co.,  96 
Wis.  38,  71  N.  W.  69;  Hammatt  v.  Emerson,  27  Me.  308-326;  Mack  v, 
Lancashire  Ins.  Co.,  2  McCrary,  211,  4  Fed.  59;  Worachek  v.  New 
Denmark  Mut.  Home  Fire  Ins.  Co.,  102  Wis.  88,  78  N.  W.  411;  Knop 
V.  National  Fire  Ins.  Co.,  107  Mich.  323,  65  N.  W.  229;  Mullin  v. 
Vermont  Mut.  Fire  Ins.  Co.,  58  Vt.  113;  Watertown  Fire  Ins.  Co.  v. 
Grehan,  74  Ga.  642;  Maher  v.  Hibernia  Ins.  Co.,  67  N,  Y.  283;  Merrill 
V.  Insurance  Co.  of  North  America,  23  Fed.  245;  Leach  v.  Republic 
Fire  Ins.  Co.,  58  N.  H.  245,  and  cases  infra.  See,  also,  "Examination 
under  Oath." 

"=  Lewis  V.  Council  Bluffs  Ins.  Co.,  63  Iowa,  193,  18  N.  W.  888. 

"» Monaghan  v.  Agricultural  Fire  Ins.  Co.,  53  Mich.  238,  18  N.  W. 
797. 

"'  Hamberg  v.  St.  Paul  F.  &  M.  Ins.  Co.,  68  Minn.  335,  71  N.  W.  388; 
Worachek  v.  New  Denmark  Mut.  Home  Fire  Ins.  Co.,  102  Wis.  88, 
78  N.  W.  411;  Moore  v.  Virginia  F.  &  M.  Ins.  Co.,  28  Grat.  (Va.)  508; 
Oshkosh  Packing  &  Provision  Co.  v.  Mercantile  Ins.  Co.,  31  Fed.  200. 


534:  NOTICE   AND   PEOOFS   OF   LOSS.  §  183 

conditions  of  tlie  policy  cannot  affect  tlie  insurer's  liability — 
as  an  attempt  to  bribe  its  inspector  and  builder.^'^^ 

A  policy  requiring  the  insured  to  state  in  his  proofs  of  loss 
all  other  insurance,  whether  valid  or  not,  covering  any  of  the 
property,  and  providing  that  it  shall  be  void  in  case  of  any 
fraud  or  false  swearing  by  the  insured,  is  not  avoided  by  the 
omission  from  the  proofs  of  loss  of  a  policy,  where  he  had  been 
informed  a  few  days  before  the  loss  by  the  company  issuing 
it  that  it  had  gone  into  liquidation  and  recalled  all  policies 
for  cancellation,  and  the  insured  at  once  procured  other  in- 
surance and  notified  the  other  company  of  such  fact,  although 
the  policies  had  not  in  fact  been  marked  cancelled. ^''^^ 

If  tlie  insured  knowingly  and  with  intent  to  defraud  makes 
a  false  and  exaggerated  statement  in  his  proofs  as  to  the  quan- 
tity and  value  of  the  property  destroyed  or  damaged,  he  for- 
feits his  rights  to  recover.  While  arithmetical  accuracy  is 
not  required,  the  truth,  the  whole  truth  and  nothing  but  the 
truth  mu5t  be  disclosed,  as  nearly  as  it  can  be  ascertained  by  a 

"'Daul  V.  Firemens'  Ins.  Co.,  35  La.  Ann.  98;  Bowen  v.  National 
Life  Ass'n,  63  Conn.  460.  A  false  statement  which  could  not  deceive 
the  insurer  to  its  injury  will  not  always  cause  a  forfeiture.  Shaw  v. 
Scottish  Commercial  Ins.  Co.,  1  Fed.  761;  Maher  v.  Hibernia  Ins. 
Co.,  67  N.  Y.  283;  Mullin  v.  Vermont  Mut.  Fire  Ins.  Co.,  58  Vt.  113; 
German  Ins.  Co.  v.  Luckett,  12  Tex.  Civ.  App.  139,  34  S.  W.  173; 
Faulkner  v.  Manchester  Fire  Assur.  Co.,  171  Mass.  349;  Hanscom  v. 
Home  Ins.  Co.,  90  Me.  333;  Phoenix  Ins.  Co.  v.  Padgitt  (Tex.  Civ. 
App.),  42  S.  W.  800;  Springfield  F.  &  M.  Ins.  Co.  v.  Winn,  27  Neb. 
649,  5  L.  R.  A.  841.  (In  the  Nebraska  case,  it  was  held  that  a  will- 
ful misrepresentation  by  insured  as  to  the  amount  of  his  loss,  pro- 
vided the  actual  amount  is  in  excess  of  the  face  of  the  policy,  will 
not  cause  a  forfeiture  under  a  provision  that  "all  fraud  or  attempts 
at  fraud  by  false  swearing  or  otherwise  shall  forfeit  all  claim  on 
this  company,  and  shall  be  a  complete  bar  to  any  recovery  for  loss 
under  this  policy."  This  is  contrary  to  the  general  trend  of  decis- 
ions.) But  see  Worachek  v.  New  Denmark  Mut.  Home  Fire  Ins.  Co., 
102  Wis.  88,  78  N.  W.  411;  Home  Ins.  Co.  v.  Winn,  42  Neb.  331,  60 
N.  W.  575. 

""  Gough  V.  Davis,  24  Misc.  Rep.  245,  52  N.  Y.  Supp.  947, 


§  182  FRAUD,  MISREPKESENTATIOXSj  ETC.  535 

reasonable  and  honest  effort.-^*'  If  there  be  a  discrepancy 
between  the  amount  of  damage  claimed  in  the  proofs  and  that 
proved  upon  the  trial,  it  is  for  a  jury  (in  a  juiy  trial)  under 
proper  instructions,  to  find  whether  the  misstatement  was  the 
result  of  accident,  mistake  or  fraudulent  intent.  ^^^  Under  a 
policy  which  provides  in  effect  that  any  over-valuation  of  prop- 
erty or  false  swearing  in  any  affidavit  relating  to  the  loss  shall 
forfeit  the  rights  of  the  insured  against  the  insurer,  the  policy 
is  avoided  by  the  claiming  in  the  verified  proofs  that  the  value 
of  the  property  destroyed  was  $1,000  when  the  value  as  testi- 
fied to  at  the  trial  was  only  $450  and  the  jury  found  the 
property  to  be  worth  less  than  $100.^*^  So  wdiere  the  amount 
claimed  w^as  more  than  double  the  value  fixed  by  appraisers 
and  the  jury.^^^  And  where  plaintiff  in  his  proofs  of  loss 
made  affidavit  that  the  value  of  the  property  at  the  time  of  its 
destruction  was  $1,000,  understanding  that  the  value  was 
much  less,  although  not  less  than  $600,  the  sum  for  which 

^8"  Sibley  v.  St.  Paul  F.  &  M.  Ins.  Co.,  9  Biss.  31,  Fed.  Cas.  No. 
12,830;  Putnam  v.  Commonwealth  Ins.  Co.,  18  Blatchf.  368,  4  Fed. 
7.53;  Dolloff  v.  Phoenix  Ins.  Co.,  82  Me.  266;  West  v,  British  America 
Assur.  Co.  (Cir.  Ct.  D.  Colo.),  25  Ins.  Law  J.  689;  Home  Ins.  Co.  v. 
Winn,  42  Neb.  331,  60  N.  W.  575;  Worachek  v.  New  Denmark  Mut. 
Home  Fire  Ins.  Co.,  102  Wis.  88,  78  N.  W.  411. 

'"Dolan  V.  Aetna  Ins.  Co.,  22  Hun  (N.  Y.),  396;  Schulter  v.  Mer- 
chants' Mut.  Ins.  Co.,  62  Mo.  236;  Tiefenthal  v.  Citizens'  Mut.  Fire 
Ins.  Co.,  53  Mich.  306,  and  cases  supra;  Oshkosh  Packing  &  Provis- 
ion Co.  V.  Mercantile  Ins.  Co.,  31  Fed.  200;  Furlong  v.  Agricultural 
Ins.  Co.,  28  Abb.  N.  C.  444,  18  N.  Y.  Supp.  844;  Obersteller  v.  Com- 
mercial Assur.  Co.,  96  Cal.  645,  31  Pac.  587;  Williams  v.  Phoenix  Fire 
Ins.  Co.,  61  Me.  67;  Wunderlich  v.  Palatine  Fire  Ins.  Co.,  104  Wis. 
382,  80  N.  W.  467. 

^-  Furlong  v.  Agricultural  Ins.  Co.,  28  Abb.  N.  C.  444,  18  N.  Y. 
Supp.  844;  Sternfeld  v.  Park  Fire  Ins.  Co.,  50  Hun  (N.  Y.),  262;  Wall 
V.  Howard  Ins.  Co.,  51  Me.  32. 

^'^  Gaston gu ay  v.  Sovereign  Fire  Ins.  Co.,  3  Russ.  &  G.  (Nova 
Scotia)  334;  Larocque  v.  Royal  Ins.  Co.,  23  Low.  Can.  Jur.  217;  Har 
ris  V.  Waterloo  Mut.  Fire  Ins.  Co.,  10  Ont.  718, 


536 


NOTICE    AND   PROOFS   OF   LOSS. 


182 


it  was  insured.^^'*  And  where  plaintiff  in  his  proofs  states 
that  a  burned  building  had  been  used  for  dwelling  house  pur- 
poses and  no  other,  when  in  fact  it  was  occupied  as  a  place 
for  selling  liquor  and  cigars,  recovery  cannot  be  had  even 
though  the  agent  of  the  insurer  knew  of  the  use  to  which  the 
building  was  put.^®^ 

An  innocent  mistake  or  misstatement  of  fact,  however 
material,  or  over-valuation,  will  not  avoid  a  policy  unless  the 
insurer  has  been  prejudiced. ^^^  An  untrue  statement  in 
proof  of  loss  as  to  the  claimant's  interest  is  immaterial  unless 
the  policy  requires  a  statement  of  such  interest.^^'^  The  fail- 
ure of  the  insured  to  refer  in  his  proofs  of  loss  or  otherwise 

"'*  Sleeper  v.  N.  H.  F.  Ins.  Co.,  56  N.  H.  401;  Mullin  v.  Vermont 
Mut.  Fire  Ins.  Co.,  58  Vt.  113;  Knop  v.  National  Fire  Ins.  Co.,  107 
Mich.  323,  65  N.  W.  229. 

In  Mullin  v.  Vtrmont  Mut.  Fire  Ins.  Co.,  supra,  the  insured,  in 
making  out  his  proofs,  relied  upon  information  given  by  others,  but 
stated  the  facts  as  of  his  own  knowledge.  The  statements  were  false. 
The  court  said:  "If  he  made  representations  assuming  to  know  the 
facts  when  he  had  no  knowledge,  and  such  statements  turned  out  to 
be  false,  it  was  a  fraud,  within  the  meaning  of  the  policy."  This 
law  was  approved  in  Knop  v.  National  Fire  Ins.  Co.,  supra.  But  see 
Phcenix  Ins.  Co.  v.  Swann  (Tex.  Civ.  App.),  41  S.  W.  519. 

="*' Hansen  v.  American  Ins.  Co.,  57  Iowa,  741;  Smith  v.  Queen  Ins. 
Co.,  1  Hann.  (N.  B.)  311. 

=^«  Commercial  Ins,  Co.  v.  Friedlander,  156  111.  595;  Parker  v. 
Amazon  Ins.  Co.,  34  Wis.  363;  Mosley  v.  Vermont  Mut.  Fire  Ins.  Co., 
55  Vt.  142;  Erb  v.  German  American  Ins.  Co.,  98  Iowa,  606,  40  L.  R. 
A.  845;  Waldeck  v.  Springfield  F.  &  M.  Ins.  Co.,  53  Wis.  129;  Carson 
v.  Jersey  City  Ins.  Co.,  43  N.  J.  Law,  300;  Titus  v.  Glens  Falls  In?. 
.Co.,  81  N.  Y.  410;  Behrens  v.  Germania  Fire  Ins.  Co.,  64  Iowa,  19; 
Smith  v.  Exchange  Fire  Ins.  Co.,  8  Jones  &  S.  492;  Oshkosh  Packing 
&  Provision  Co.  v.  Mercantile  Ins.  Co.,  31  Fed.  200;  Helbing  v.  Svea 
Ins.  Co.,  54  Cal.  156;  Fitzgerald  v.  Union  Ins.  Co.,  54  Cal.  599;  Gere 
V.  Council  Bluffs  Ins.  Co.,  67  Iowa,  272;  Pelican  Ins.  Co.  v.  Schwartz 
(Tex.),  19  S.  W.  374;  Israel  v.  Teutonia  Ins.  Co.,  28  La.  Ann.  689; 
Dogge  V.  Northwestern  Nat.  Ins.  Co.,  49  Wis.  501;  Parsons  v.  Citi- 
zens' Ins.  Co.,  43  Up.  Can.  Q.  B.  261;  Towne  v.  Springfield  F.  &  M. 
Ins..  Co.,  145  Mass.  582;  Hanscom  v.  Home  Ins.  Co.,  90  Me.  333. 

'"  Bowen  v.  National  Life  Ass'n,  63  Conn.  460. 


§  182  FKAUD,  MISEEPKESENTATIONS,  ETC.  537 

to  the  lien  of  his  lessor  for  rent  upon  the  building  insured 
does  not  avoid  the  policy  under  the  clause  that  it  should  be- 
come void  "by  fraud  or  attempt  at  fraud  in  the  procurement 
of  this  policy  or  in  the  proofs  of  loss  or  by  false  swearing  or 
by  any  other  means,"  even  though  the  policy  further  required 
the  insured  to  furnish  proofs  of  loss  stating  the  title  and  in- 
terest of  himself  and  ar  Dthers  in  the  property.  There  must 
be  more  than  a  mistake  of  fact  or  honest  misstatement  to 
amount  to  fraud  or  false  swearing. ^^^  A  statement  made  by 
the  insured  in  his  proofs  of  loss  that  the  amount  claimed  of 
the  insurer  was  $1,450,  the  whole  amount  of  the  loss,  without 
giving  information  of  an  assignment,  is  not  a  false  statement 
or  fraudulent  claim  where  the  insured  had  on  the  day  of  the 
loss  assigned  an  interest  in  the  policy  to  another.  Otherwise 
if  the  proofs  contained  a  statement  or  claim  that  the  whole 
amount  was  due  to  the  insured. ^^^ 

Under  Valued  Policies. 

The  f  aq,t  that  the  insured  knowingly  and  intentionally  stated 
in  his  proofs  of  loss  that  the  amount  of  the  loss  was  greater 
than  it  actually  was,  is  no  defense  to  an  action  on  a  valued 
policy  on  realty  alone — even  though  it  contain  a  provision 
that  all  claims  should  be  forfeited  by  "fraud  or  attempt  at 
fraud  by  false  swearing  or  otherwise."  But  where  the  same 
policy  covers  both  realty  and  personalty  and  the  amount  of 
damage  to  the  latter  is  in  dispute — any  fraudulent  over-valua- 
tion of  either  in  proofs  of  loss  may  be  considered  by  a  jury 

^"Dresser  v.  United  Firemen's  Ins.  Co.,  45  Hun  (N.  Y.),  298; 
Star  Union  Lumber  Co.  v.  Finney,  35  Neb.  214;  Huff  v.  Jewett,  20 
Misc.  Rep.  35,  44  N.  Y.  Supp.  311;  Faulkner  v.  Manchester  Fire 
Assur.  Co.,  171  Mass.  349;  Little  v.  Phoenix  Ins.  Co.,  123  Mass.  380; 
Andes  Ins.  Co.  v.  Fish,  71  111.  620;  Rohrbach  v.  Aetna  Ins.  Co.,  62 
N.  Y.  613;  Wash  v.  Fire  Ass'n  of  Philadelphia,  127  Mass.  383. 

="'  Lamb  v.  Council  Bluffs  Ins.  Co.,  70  Iowa,  238,  30  N.  W.  497. 


53S 


NOTICE    AND    PKOOFS    OF   LOSS. 


gm 


in  determining  whether  the  statements  made  concerning  per- 
sonalty were  fraudulent  or  not.^^^ 

Examination  Under  Oath. 

§  183.  The  insured  need  not  submit  to  an  examination  under 
oath  unless  he  has  bound  himself  to  do  so,  and  then  only  to  one 
examination,  at  a  convenient  place,  and  after  a  proper  demand 
has  been  made  upon  him. 

Under  a  stipulation  in  a  policy  that  the  assured  shall,  i£ 
required,  submit  himself  to  an  examination  under  oath,  mere 
informal  conversations  or  declarations  by  the  officers  of  the 
company  that  they  desired  to  have  such  an  examination  will 
not  impose  any  duty  upon  the  insured.     He  is  not  obliged  to 
tender  himself  voluntarily  for  examination.     A  demand  for 
such  examination  must  l^e  made  with  such  clearness  and  dis- 
tinctness that  the  insured  shall  be  fully  informed  that  the  in- 
surer means  to  insist  upon  it.^°^     Whether  the  conditions  of 
a  policy  requiring  an  examination  of  the  insured  and  his  book 
accounts  are  waived  by  delay  on  the  part  of  the  insurer  in  de- 
manding the  same  and  in  taking  part  in  an  adjustment  of  the 
loss  during  which  the  books  were  examined  and  the  amount 
of  the  damage  practically  agreed  upon  is  often  a  question  for 
a  jury  to  determine. ^''^     And  where  a  provision  requires  the 
insured  to  submit  to  an  examination  under  oath  by  any  person 
named  by  the  company,  the  latter  must  designate  someone 
authorized  by  law  to  administer  oaths,  before  whom  such 
examination  can  be  had,  and  fix  a  time  for  the  examination 
within  a  reasonable  date  after  it  has  notice  of  the  fire,  and  a 

'"'  Oshkosh  Packing  &  Provision  Co.  v.  Mercantile  Ins.  Co.,  31  Fed. 
200;  Cayon  v.  Dwelling  House  Ins.  Co.,  68  Wis.  510,  32  N.  W.  540; 
Seyk  V,  Millers'  Nat.  Ins.  Co.,  74  Wis.  67,  3  L.  R.  A.  523;  Bammessel 
V.  Brewers'  Fire  Ins.  Co.,  43  Wis.  463. 

="  State  Ins.  Co.  v.  Maackens,  38  N.  J.  Law,  565. 

=»=  Robertson  v.  New  Hampshire  Ins.  Co.  (Super.  Ct),  16  N.  Y. 
Supp.  842. 


§  183  EXAMINATION    UNDER   OATH.  539 

place  of  examination  reasonably  convenient  witliin  tlie  connty 
where  the  insured  resides,  before  such  provision  becomes  oper- 
ative. Where  the  insured  submits  to  one  examination  and 
that  is  concluded,  the  insurer  can  demand  no  more  unless  bj 
the  terms  of  the  policy. ^'^^ 

An  insurer  cannot  require  the  insured  to  leave  the  state 
where  he  resides  and  where  the  fire  occurs,  and  appear  at  its 
office  in  another  state,  there  to  be  examined  concerning  the 
loss.^^^ 

The  insured  has  a  right  to  the  presence  of  counsel  at  his 
examination,  and  the  denial  of  this  right  by  the  insurer  justi- 
fies the  insured  in  refusing  to  submit  to  an  examination.^®^ 
The  validity  of  any  condition  requiring  the  insured  to  submit 
to  a  secret  examination,  and  denying  him  the  right  to  the 
assistance  of  counsel,  is  doubtful. ^^^ 

Where  a  policy  requires  the  insured  to  submit  to  an  exam- 
ination under  oath  concerning  the  loss,  and  further  provides 
that  actual  or  attempted  fraud  or  false  swearing  shall  destroy 
all  rights  to  recover  on  the  policy,  a  false  answer  knowingly 
and  wilfully  made  by  the  insured  during  such  an  examination 
as  to  a  matter  of  fact  material  to  the  inquiry,  is  fraudulent^ 
and  the  intent  to  deceive  the  insurer  is  necessarily  implied; 
and  it  is  no  palliation  of  the  fraud  that  the  insured  did  not 
mean  thereby  to  prejudice  the  insurer,  but  meant  merely  to 
promote  his  own  personal  interests  in  other  matters.  Such 
false  statements  wilfully  made  during  such  an  examination 

"'Aetna  Ins.  Co.  v.  Simmons,  49  Neb.  811,  69  N.  W.  125;  Moore  v. 
Protection  Ins.  Co.,  29  Me.  97;  McKee  v.  Susquehanna  Mut.  Fire  Ins. 
Co.,  135  Pa.  St.  544,  19  Atl.  1067;  Woodfin  v.  Asheville  Mut.  Ins.  Co., 
6  Jones  (N.  C),  558;  Germania  Fire  Ins.  Co.  v.  Curran,  8  Kan.  9. 

='"  American  Cent.  Ins.  Co.  v.  Simpson,  43  111.  App.  98;  Fleisch  v. 
Insurance  Co.  of  North  America,  58  Mo.  App.  596,  23  Ins.  Law  J.  634. 

=»=*  Thomas  v.  Burlington  Ins.  Co.,  47  Mo.  App.  169;  American  Cent. 
Ins.  Co.  V.  Simpson,  43  111.  App.  98. 

'"^  McGraw  v.  German  Fire  Ins.  Co.,  54  Mich.  145,  19  N.  W.  927. 


O-IO  NOTICE    AND    PEOOFS    OF    LOSS.  §  183 

and  intended  to  conceal  tlie  tiiith  in  regard  to  the  pnrcliasc 
of  the  property  insured,  or  price  paid,  or  the  manner  of  pay- 
ment, constitute  an  attempted  fraud  by  false  swearing,  which 
is  a  breach  of  the  condition  and  a  bar  to  recoveiy  on  the 
policy. '^^ 

The  wilful  false  swearing  by  the  insured  to  a  material 
Taatter  under  such  provisions  forfeits  the  whole  amount  due, 
and  not  merely  the  amount  due  on  a  particular  item  of  dam- 
age, or  for  the  loss  of  a  particular  article,  to  which  the  false 
statement  relates. "^^  The  insured  is  bound  in  such  an  exam- 
ination to  answer  only  those  questions  which  have  a  material 
bearing  upon  the  insurance  and  the  loss,  and  his  refusal  to 
answer  questions  having  no  such  bearing  cannot  prejudice. ^^'^ 
He  is  not  bound  to  answer  questions  resjx?cting  the  amount 
for  which  he  had  made  a  settlement  with  other  insurance 
companies,  nor  on  a  demand  to  produce  certified  copies  of  in- 
voices of  goods  destroyed  need  he  produce  duplicates  where 
the  originals  are  destroyed  or  are  out  of  his  possession.^*^*' 

A  condition  that  the  insured,  "if  required,  shall  produce 
the  books  of  account  and  other  proper  vouchers  and  permit 
copies  of  invoices  to  be  taken  therefrom,"  does  not  require  him 
to  produce  any  books  or  papers  which  are  not  under  his 
personal  control.^"^  Where  a  policy  requires  the  insured  to 
submit  to  an  examination  under  oath  by  the  agent  of  the 
insurer  and  to  subscribe  to  the  same,  and  the  insured  does 
submit  to  an  examination  but  does  not  subscribe  to  the  same 
because  he  claims  it  to  be  incorrect,  and  no  further  demand 
for  his  subscription  is  made  by  the  insurer,  this  alone  will  not 
bar  an  action  on  the  policy,  but  the  burden  is  on  the  insured  to 

^•^  Claflin  V.  Commonwealth  Ins.  Co.,  110  U.  S.  81. 

»»=  Hamberg  v.  St.  Paul  F.  &  M.  Ins.  Co.,  68  Minn.  335. 

*^  Titus  V.  Glens  Falls  Ins.  Co.,  81  N.  Y.  411. 

»°« Republic  Fire  Ins.  Co.  v.  Weides,  14  Wall.  (U.  S.)  375. 

'"i  Sagers  v.  Hawkeye  Ins.  Co.,  94  Iowa,  519,  63  N.  W.  194, 


§  184         BOOKS  OF  ACCOUNT,  INVOICES,  ETC.  541 

show  that  he  "was  justified  in  not  signing.^"^  Any  objection 
which  the  insurer  might  make  because  of  the  failure  to  fur- 
nish or  of  delay  in  furnishing  notice  or  proofs  of  loss,  is 
waived  by  its  insistence  upon  the  right  to  examine  the  in- 
sured under  oath  concerning  the  loss.^*'^ 

The  insurer  waives  its  right  to  declare  a  policy  forfeited 
for  failure  of  the  insured  to  comply  with  an  "iron-safe"  clause 
therein  by  requiring  the  insured  to  submit  to  a  sworn  ex- 
amination under  a  stipulation  therefor  in  the  policy.^"^  But 
a  provision  in  a  policy  requiring  the  insured  to  exhibit  to 
the  company's  adjuster  all  that  remains  of  the  property  in- 
sured after  a  loss  occurs,  is  not  waived  by  an  examination  of 
the  secretary  and  treasurer  of  the  insured  after  furnishing 
of  proofs  of  loss,  where  the  policy  specifically  provides  that 
no  waiver  shall  arise  in  consequence  of  such  examination.^"^ 

Books  of  Account,  Invoices,  etc. 

§  184.  The  insured  must  keep  such  books  of  account  and  in* 
voices  as  are  prescribed  by  the  policy. 

After  a  loss  he  must  upon  proper  demand  produce  such  data 
as  is  required  by  the  policy  or  show  a  legal  excuse  for  his  fail- 
ure so  to  do. 

An  insurance  company  has  the  right  to  require  by  its  poli- 
cies that  one  whom  it  insures  and  who  is  carrying  on  a  mer- 
cantile business,  shall  take  inventories  of  stock  at  stated  inter- 
vals and  keep  books  of  account  showing  purchases  and  sales^ 
and  that  he  shall  keep  such  inventories  and  books  in  a  secure 
place,  ready  to  be  produced  in  case  of  damage  by  fire,  so  that 

='^  Scottish  U.  &  N.  Ins.  Co.  v.  Keene,  85  Md.  265.  See,  also, 
O'Brien  v.  Ohio  Ins.  Co.,  52  Mich.  131,  17  N.  W.  726. 

»°' Carpenter  v.  German  American  Ins.  Co.,  135  N.  Y.  298;  Badger 
V.  Glens  Falls  Ins.  Co.,  49  Wis.  389. 

'"^Georgia  Home  Ins.  Co.  v.  O'Neal,  14  Tex.  Civ.  App.  516,  38^ 
S.  W.  62. 

^'"Oshkosh  Match  Works  v.  Manchester  Fire  Assur,  Co.,  92  Wis. 
510,  66  N.  W.  525, 


542  NOTICE    AND    PROOFS    OF   LOSS.  §  184: 

the  amount  and  extent  of  the  loss  can  be  accurately  and 
readily  ascertained.  And  when  the  policy  requires  the  in- 
ply  with  such  requirement  if  requested  so  to  do  or  show  a 
loss,  if  requested,  under  penalty  of  forfeiture,  he  must  com- 
ply with  such  requirement  if  requested  so  to  do  or  show  a 
legal  excuse  for  non-compliance.  Otherwise  he  cannot  re- 
cover except  the  insurer  has  waived  or  is  estopped  to  insist 
upon  its  rights  in  that  particular.  The  fact  that  he  did  not 
keep  any  books  of  account  will  not  excuse  his  failure  to  com- 
ply with  these  conditions.*^^^ 

A  provision  that  he  shall,  after  loss,  as  often  as  required 
produce  for  examination  by  the  insurer  all  books  of  account, 
bills  and  invoices  or  certified  copies  thereof  if  the  originals 
are  lost,  at  such  reasonable  place  as  may  be  designated  by 
the  company  or  its  representatives,  and  shall  permit  extracts 
from  and  copies  thereof  to  be  made,  is  reasonable,  and  it  is  the 
duty  of  the  insured  to  comply  with  a  demand  made  pursuant 
thereto.  If  insured  is,  under  this  clause,  called  upon  to 
produce  duplicate  bills  of  articles  contained  in  his  statement 
of  loss,  and  is  unable  so  to  do,  the  burden  is  on  him  to  show 
that  he  made  reasonable  efforts  to  comply  and  was  unsuccess- 
f^j  307     r^-^Q  insured  can .  ordinarily  only  be  compelled  to 

""Niagara  Fire  Ins.  Co.  v.  Forehand,  169  111.  626.  See,  also,  ante, 
"Particular  Account;"  Norton  v.  Rensselaer  &  S.  Ins.  Co.,  7  Cow. 
(N.  Y.)  645,  1  Bennett,  Fire  Ins.  Cas.  204;  O'Brien  v.  Commercial 
Fire  Ins.  Co.,  63  N.  Y.  108--113;  Ward  v.  National  Fire  Ins.  Co.,  10 
Wash.  361.  As  to  nature  of  the  hooks  required,  see  Pelican  Ins.  Co. 
V.  Wilkerson,  53  Ark.  353,  13  S.  W.  1103;  Jones  v.  Mechanics'  Fire 
Ins.  Co.,  36  N.  J.  Law,  35;  Republic  Fire  Ins.  Co.  v.  Weides,  14  Wall. 
(U.  S.)  375. 

""Langan  v.  Royal  Ins.  Co.,  162  Pa.  St.  357;  Jones  v.  Mechanics' 
Fire  Ins.  Co.,  36  N.  J.  Law,  29;  Miller  v.  Hartford  Fire  Ins.  Co.,  70 
Iowa,  704;  Meyer  v.  Insurance  Co.  of  North  America,  73  Mo.  App. 
166. 

In  this  case  it  was  held  that,  under   a  valued  policy,  the   insured 


§  184:       BOOKS  OF  ACCOUNT,  INVOICES,  ETC.  543 

produce  the  books  and  papers  under  his  personal  control.""^ 
The  insurer  should  be  prompt  and  reasonable  in  its  de- 
mands.^^*^ 

The  fact  that  one  of  the  conditions  of  a  policy  provides  that 
proofs  of  loss  shall  be  sustained,  "if  required,  by  books  of 
account  and  other  vouchers,"  creates  no  implied  warranty  on 
the  part  of  the  assured  that  he  will  keep  books  of  account  and 
other  vouchers  and  be  ready  to  exliibit  them  when  called  on.^^'^ 
The  obligation  imposed  upon  the  insured  by  the  terms  of  the 
policy  to  make  a  tnie  inventory  of  the  goods  after  a  fire  has 
occurred  is  excused  if  the  goods  are  so  damaged  that  it  is  not 
reasonably  practical  to  make  such  an  inventory.^ ^^ 

The  production  of  books  and  inventories  covenanted  to  be 
kept  in  a  fireproof  safe  and  produced  in  case  of  loss,  is  excused 
if  they  are  dest.oyed  by  fire  while  in  a  safe  which,  though  not 
absolutely  fireproof,  is  composed  of  incombustible  materials 
and  fitted  to  protect  its  contents  in  the  ordinary  way  and  to 
the  usual  extent.-'*  ^^  The  proper  place  for  the  examination 
of  the  books  of  the  insured,  provided  for  in  a  policy  of  insur- 

could  not  be  compelled  to  furnish  plans  and  specifications  of  the 
building  destroyed.  To  the  same  effect  is  Phoenix  Ins.  Co.  v.  Levy, 
12  Tex.  Civ.  App.  45,  33  S.  W.  992;  but  see  Temple  v.  Niagara  Fire 
Ins.  Co.,  85  N.  W.  361. 

""Sagers  v.  Hawkeye  Ins.  Co.,  94  Iowa,  519,  63  N.  W.  194;  Repub- 
lic Fire  Ins.  Co.  v.  Weides,  14  Wall.  (,U.  S.)  375. 

^o' Aetna  Ins.  Co.  v.  Simmons,  49  Neb.  811,  69  N.  W.  125;  Moore  v. 
Protection  Ins.  Co.,  29  Me.  97;  McKee  v.  Susquehanna  Mut.  Fire  Ins. 
Co.,  135  Pa.  St.  544;  American  E.  L.  Ins.  Co.  v.  Barr.  16  C.  C.  A.  51, 
68  Fed.  873;  Union  Cent.  Life  Ins.  Co.  v.  Hollowell,  14  Ind.  App.  611, 
43  N.  E.  277. 

'"Wightman  v.  "Western  M.  &  F.  Ins.  Co.,  8  Rob.  (La.)  442,  2  Ben- 
nett, Fire  Ins.  Cas.  331. 

'"  Powers  Dry  Goods  Co.  v.  Imperial  Fire  Ins.  Co.,  48  Minn.  380,  51 
N.  W.  123;  German  Ins.  Co.  v.  Pearlstone,  18  Tex.  Civ.  App.  706,  45 
S.  W.  832. 

»"  Sneed  v.  British  America  Assur.  Co.,  73  Miss.  279,  18  So.  928. 


54J: 


NOTICE   AND    PROOFS   OF    LOSS. 


§184 


ance  upon  tlie  mercliandise  in  a  store,  is  the  place  of  its  loca- 
tion in  the  absence  of  any  stipulation  to  the  contrary.^  ^^  When 
the  insured  keeps  his  books  and  accounts  and  inventories  re- 
quired by  the  policy  and  after  a  loss  produces  them  to  the 
adjuster  of  the  company  and  thereafter  the  books  and  inven- 
tory are  lost  without  the  fault  or  negligence  of  the  insured, 
the  mere  failure  to  produce  them  subsequently  will  not  pre- 
clude a  recovery  on  the  policy.^  ^^  The  defense  that  the  in- 
sured did  not  on  demand  submit  his  books  and  accounts  for 
examination  as  required  by  the  policy  is  unavailing  where 
the  insurer  actually  had  the  books  of  the  insured  and  ample 
opportunity  to  examine  both  them  and  the  insured  and  made 
actual  use  thereof  in  collecting  a  claim  for  re-insurance  against 
another  company.^  ^^ 


^"  Fleisch  v.  Insurance  Co.  of  North  America,  58  Mo.  App.  596,  23 
Ins.  Law  J.  634. 

5"  Pelican  Ins.  Co.  v.  Wilkerson,  53  Ark.  353,  13  S.  W.  1103. 

'"  McKee  v.  Susquehanna  Mut.  Fire  Ins.  Co.,  135  Pa.  St.  544,  19  Atl. 
1067. 


CHAPTER  XIV. 

WAIVER  OF  NOTICE  AND  PROOFS  OF  LOSS. 

§  185.  General  Principles. 
186.  Waiver  of  Notice  not  Waiver  of  Proof. 

-  187.  Stipulations  of  Policy. 
188-190.  What  Agents  can  Waive. 
191-192.  Waiver  of  Delay. 
193-194.  Waiver  of  Insufficiency. 

195.  Amended  or  Additional  Proofs. 

196.  Proofs  not  Furnished  by  Proper  Person. 
197-198.  Silence  of  Insurer. 

199-200.  Denial  of  Liability. 

201.  After  Time  to  Furnish  Proofs  has  Expired. 

202.  In  Answer. 

203.  Negotiations  for  Settlement. 

204.  Proceedings  to  Ascertain  or  Adjust  Loss. 

205.  Furnishing  or  Refusal  to  Furnish  Blanks. 

General  Principles. 

§  185.  Stipulations  in  insurance  policies  as  to  the  time  and 
manner  of  serving  notice  or  proofs  of  loss  may  be  waived  by 
the  insurer  either  expressly  or  by  acts  or  conduct  from  which 
waiver  may  be  reasonably  inferred. 

The  stipulations  in  insurance  policies  regulating  the  time 
and  manner  of  furnishing  notice  and  proofs  of  loss,  as  well  as 
their  contents,  are  intended  for  the  benefit  of  the  insurer,  by 
whom  they  may  be  waived.  Provisions  that  only  certain  offi- 
cers of  the  insurance  company  shall  have  power  to  waive  speci- 
fied conditions  of  the  policy  are  valid ;  but  a  stipulation  that 
the  insurer  itself  cannot  waive  a  provision  at  all,  or  only  in  a 
particular  manner,  as  for  instance,  that  "no  officer,  agent  or 
representative  of  the  insurer  shall  be  held  to  have  waived  any 
KERR,  INS.— 35 


546  WAIVER   OF   NOTICE   AND   PROOFS    OF   LOSS.  §  185 

of  the  conditions  of  a  policy  unless  such  waiver  shall  be  in 
writing  and  endorsed  hereon/'  is  ineffectual  to  limit  the  legal 
capacity  of  the  company  to  af  ter^'ards  bind  itself  contrary  to 
the  conditions  of  the  policy  by  an  agent  acting  within  the  scope 
of  his  authority,  and  the  one  who  has  power  to  waive  a  provi- 
sion can  always  waive  compliance  with  that  part  of  the  same 
provision  which  relates  to  the  manner  of  waiver.^ 

A  waiver  may  be  express,  as  where  the  insurer  explicitly 
foregoes  the  furnishing  of  proofs ;  or  implied,  that  is,  by  any 
acts  or  statements  on  the  part  of  the  insurer  or  its  duly  author- 
ized agents  which  might  fairly  and  reasonably  induce  the  in- 
sured to  conclude  that  the  furnishing  of  notice  or  proofs  is 
dispensed  with  or  excused,  and  which  influence  him  to  rely 
thereon  in  good  faith  and  to  act  accordingly.^ 

A  waiver  of  a  stipulation  in  an  agreement  must,  to  be 
effectual,  not  only  be  made  intentionally,  but  also  with  know- 
ledge of  the  circumstances.  This  is  the  rule  where  there  is 
a  direct  and  precise  agreement  to  waive  a  stipulation.  A 
fortiori  is  this  the  rule  when  there  is  no  agreement  either 
verbal  or  in  waiting  to  waive  the  stipulation,  but  where  it  is 
sought  to  deduce  a  waiver  from  the  conduct  of  the  party. 
Thus  where  a  written  agi'eement  exists  and  one  of  the  parties 
sets  up  an  arrangement  of  a  different  nature,  alleging  conduct 
on  the  other  side  amounting  to  a  substitution  of  this  arrange- 
ment for  the  written  agreement,  he  must  show  clearly  not 
merely  his  own  understanding,  but  that  the  other  party  had 
the  same  understanding,  and  each  is  conclusively  presumed 

^Lamberton  v.  Connecticut  Mut.  Fire  Ins.  Co.,  39  Minn.  129; 
Knickerbocker  Life  Ins.  Co.  v.  Norton,  96  U.  S.  234.  See  notes  on 
"Agency,"  §§  252  et  seq. 

==  Peninsular  Land  T.  &  M.  Co.  v.  Franklin  Ins.  Co.,  35  W.  Va.  666; 
Green  v.  Des  Moines  Fire  Ins.  Co.,  84  Iowa,  135,  50  N.  W.  558;  Hans- 
com  V.  Home  Ins.  Co.,  90  Me.  333;  Inland  Ins.  &  Deposit  Co.  v.  Stauf- 
fer,  33  Fa.  St.  397. 


§  185  GENERAL    PRINCIPLES.  647 

to  have  intended  and  anticipated  tlie  ordinary  and  natural 
consequence  of  his  o-v\ti  acts.  If  therefore  after  a  loss  has 
occun-ed,  and  after  both  insurer  and  insured  knew  of  the 
loss,  and  before  the  time  to  furnish  notice  or  proofs,  or  to 
amend  those  already  furuxshed  has  expired,  the  conduct  of 
the  insurer  has  been  such  as  to  induce  the  insured,  acting  as 
a  reasonably  careful  and  prudent  man,  to  believe  that  so 
much  of  the  contract  as  provides  for  a  forfeiture  if  the  proofs 
or  notice  be  not  furnished  in  time,  form,  or  manner,  as  re- 
quired by  the  policy,  would  be  dispensed  with  and  not  insisted 
upon  or  enforced,  the  insurer  ought  not  in  common  justice  to 
be  allowed,  and  will  not  be  allowed,  to  allege  such  forfeiture 
against  one  who  has  so  believed  as  a  result  of  such  conduct, 
and  who  so  believing  and  acting  on  such  belief,  has  neglected 
to  do  what  he  othei"wdse  would  have  done  to  comply  with  the 
provisions  of  the  policy.^ 

But  this  rule  only  applies  to  acts  of  the  insurer  done  while 
yet  there  is  time  for  the  insured  to  comply  with  the  provisions  • 
of  the  policy.     A  waiver  in  this  sense  is  in  the  nature  of  an 
estoppel.     The  company  must  by  some  agent  having  real  or 

=  Kenton  Ins.  Co.  v.  Wigginton,  89  Ky.  330,  7  L.  R.  A.  82;  Arm- 
strong V.  Agricultural  Ins.  Co.,  130  N.  Y.  566;  Hartford  Life  An- 
nuity Ins.  Co.  V.  Unsell,  144  U.  S.  439;  Globe  Mut.  Life  Ins.  Co.  v. 
Wolff,  95  U.  S.  326;  Bennecke  v.  Connecticut  Mut.  Life  Ins.  Co.,  105 
U.  S.  355;  Helvetia  Swiss  Fire  Ins.  Co.  v.  EdwardJ'.  Allis  Co.,  11 
Colo.  App.  264,  53  Pac.  242. 

A  waiver  is  an  intentional  relinquishment  of  a  known  right.  Thus, 
where  an  insurer's  special  agent  sent  to  adjust  a  loss  declared  that 
the  claim  would  not  be  paid  because  the  plaintiff  burned  the  prop- 
erty, but  the  referee  found  as  a  fact  that  the  agent  did  not  intend  to 
waive  the  furnishing  of  proofs,  and  that  the  plaintiff  did  not  under-' 
stand  that  proofs  were  waived,  and  was  not  deceived  or  misled,  the 
court  held  that  there  was  no  waiver.  Findeisen  v.  Metropole  Fire 
Ins.  Co.,  57  Vt.  520;  Eastern  R.  Co.  v.  Relief  Fire  Ins.  Co.,  105  Mass. 
579;  Brewer  v.  Chelsea  Mut.  Ins.  Co.,  14  Gray  (Mass.),  209;  Blake  v. 
Exchange  Mut.  Ins.  Co.,  12  Gray  (Mass.),  265;  Underbill  v,  Agawam 
Mut.  Fire  Ins.  Co.,  6  Cush.  (Mass.)  440. 


548  WAIVER   OF   NOTICE    AND    PROOFS    OF    LOSS.  §  ISS' 

apparent  authority,  have  done  or  said  something  that  induced 
the  insured  to  do  or  forhear  from  doing  something  whereby 
he  was  prejudiced.  When  there  is  a  failure  to  perform,, 
which  is  due  wholly  to  the  fault  of  the  insured,  and  if  the 
policy  declares  that  such  failure  shall  forfeit  all  rights  of  the 
insured,  the  policy  is  ipso  jure  dead,  and  can  only  be  revived 
by  a  new  consideration  or  an  express  waiver  made  by  the- 
insurer  subsequent  to  the  forfeiture.  If,  under  such  a  policy, 
notice  or  proofs  are  not  served  within  the  prescribed  time  and 
the  insurer  has  done  nothing  to  induce  the  omission,  the  in- 
sured will  have  lost  all  his  rights;  and  if  proofs  are  there-, 
after  sent,  the  insurer  is  not  bound  to  recognize  them  nor 
to  call  attention  to  any  defects,  nor  is  it  then  bound  to  specify 
its  defenses,  nor  does  it  waive  those  not  specified.^ 

There  is,  however,  this  exception  to  the  rule  last  mentioned 
viz. : — if  after  knowledge  of  any  default  for  which  it  might 
terminate  the  contract,  or  if  after  all  right  to  recover  on  the 
contract  has  to  the  knowledge  of  the  insurer  become  barred 
by  the  very  terms  of  the  contract  itself  because  of  the  failure 
of  the  insured  to  perform  some  condition  precedent  to  his 
right  of  recovery,  the  insurer  does  any  acts  or  enters  into  any 
negotiations  with  the  insured,  which  recognize  the  continuing 

*Weidert  v.  State  Ins.  Co.,  19  Or.  261;  Killips  v.  Putnam  Fire  Ins. 
Co.,  28  Wis.  472;  Carlson  v.  Supreme  Council,  A.  L.  H.,  115  Cal.  466, 
35  L.  R.  A.  643;  Ermentrout  v.  Girard  F.  &  M.  Ins.  Co.,  63  Minn.  305; 
Engebretson  v.  Hekla  Fire  Ins.  Co.,  58  Wis.  301;  Edwards  v.  Balti- 
more Fire  Ins.  Co.,  3  Gill  (Md.),  176,  2  Bennett,  Fire  Ins.  Cas.  405; 
Smith  V.  Haverhill  Mut.  Fire  Ins.  Co.,  1  Allen  (Mass.),  297;  Insur- 
ance Co.  of  North  America  v.  Brim,  111  Ind.  281;  Trask  v.  State  F. 
&  M.  Ins.  Co.,  29  Pa.  St.  198;  Blossom  v.  Lycoming  Fire  Ins.  Co.,  64 
N.  Y.  166;  Smith  v.  State  Ins.  Co.,  64  Iowa,  716,  21  N.  W.  145;  Bolan 
V.  Fire  Ass'n  of  Philadelphia,  58  Mo.  App.  225;  Cohn  v.  Orient  Ins. 
Co.,  62  Mo.  App.  271;  Albers  v.  Phoenix  Ins.  Co.,  68  Mo.  App.  543; 
Harrison  v.  German  American  Fire  Ins.  Co.,  67  Fed.  577;  Armstrong 
V.  Agricultural  Ins.  Co.,  130  N.  Y.  566;  More  v.  New  York  Bowerjr 
Fire  Ins.  Co.,  130  N.  Y.  537,  29  N.  E.  757. 


§  185  GENERAL    PRINCirLES.  549 

validity  of  its  obligation,  or  treats  it  as  still  in  force  and 
effect,  the  default  or  forfeiture  is  waived.  Thus  where  the 
insurer  with  full  knowledge  of  the  existence  of  facts  consti- 
tuting a  forfeiture  of  the  rights  of  the  insured,  receives  and 
retains  without  objection  .lU  insufficient  notice  or  proof  of 
loss  which  was  not  serA^ed  within  the  prescribed  time,  and 
thereafter  calls  for  further  information  and  furnishes  blank 
proofs  for  giving  the  same  in  connection  with  its  demand,  or 
requires  and  induces  the  insured  to  do  some  act  or  incur  some 
trouble  or  expense  inconsistent  with  the  claim  that  the  policy 
has  become  inoperative,  it  will  be  held  to  have  waived,  and 
will  be  estopped  to  assert,  the  defense  that  the  notice  or  proofs 
were  not  in  proper  form  and  ser\^ed  in  due  time.^ 

These  rules  are  applicable  to  statutory  or  standard  policies 
as  well  as  to  the  others.^ 

Forfeiture  is  not  favored  either  in  law  or  equity,  and  the 
provision  for  it  in  a  contract  will  be  strictly  construed,  and 
courts  will  find  a  waiver  of  it  upon  slight  evidence  when  the 
justice  and  equity  of  the  claim  is,  under  the  contract^  in  favor 
of  the  insured.^ 

"Trippe  v.  Provident  Fund  Soc,  140  N.  Y.  23,  22  L.  R.  A.  432;  Ar- 
gall  V.  Old  North  State  Ins.  Co.,  84  N.  C.  355;  Hanscom  v.  Home  Ins. 
Co.,  90  Me.  333;  Welsh  v.  London  Assur.  Corp.,  151  Pa.  St.  607;  Loeb 
V.  American  Cent.  Ins.  Co.,  99  Mo.  50;  Covenant  Mut.  Life  Ass'n  v. 
Eaughman,  73  111.  App.  544;  Crenshaw  v.  Pacific  Mut.  Life  Ins.  Co., 
71  Mo.  App.  42;  Standard  L.  &  A.  Ins.  Co.  v.  Davis,  59  Kan.  521,  53 
I'ac.  856,  27  Ins.  Law  J.  898;  Bennett  v.  Agricultural  Ins.  Co.,  15 
Abb.  New  Cas.  (N.  Y.)  234;  Thierolf  v.  Universal  Fire  Ins.  Co.,  110 
Pa.  St.  37;  Helvetia  Swiss  Fire  Ins.  Co.  v.  Edward  P.  Allis  Co.,  11 
Colo.  App.  264,  53  Pac.  242. 

"Harris  v.  Phoenix  Ins.  Co.,  85  Iowa,  238,  52  N.  W.  128;  Hicks  v. 
British  America  Assur.  Co.,  13  App.  Div.  (N.  Y.)  444,  162  N.  Y.  284, 
48  L.  R.  A.  424. 

'Bonenfant  v.  American  Fire  Ins.  Co.,  76  Mich.  653;  German  Fire 
Ins.  Co.  V.  Carrow,  21  111.  App.  631;  Thompson  v.  Phenix  Ins.  Co., 
136  U.  S    287;  Turner  v.  Fidelity  &  Casualty  Co.,  112  Mich.  425,  38 


650  WAivEK  OF  noticp:  and  pkoofs  of  loss.  §  1S5 

The  acts  relied  on  to  constitute  a  waiver  of  proofs  of  loss 
on  the  part  of  an  insurer  must  he  the  acts  of  some  one  sho\\Ti 
to  have  had  authority  to  bind  it;  and  such  as  to  properly 
induce  the  insured  to  believe  that  proofs  were  not  desired  and 
if  furnished  would  be  unavailing.  Whether  or  not  the  agent 
had  power  and  authority  to  make  the  waiver,  and  Avhether 
there  was  in  fact  a  waiver,  are  usually  questions  of  fact;** 
but  if  there  be  no  conflict  in  the  evidence  and  the  inferences 
are  certain  it  becomes  a  question  of  law.^ 

Illusi  rat  ions. 
Waiver. 

Waiver  of  proofs  of  loss  may  be  made  by  parol  i"""  and  at  any 
time,  by  consent  of  both  parties.  Proofs  are  unnecessary 
where  the  company  has  expressly  waived  them  or  has  pro- 
ceeded with  the  hearing  of  the  claims  as  provided  by  the  con- 
tract without  them. ^2  The  statement  of  an  adjuster  author- 
ized to  adjust  and  settle  a  loss  that  the  insured  need  not  make 
out  any  proofs  of  loss  is  a  waiver  of  proofs. ^^     So  is  a  letter 

L.  R.  A.  529;  Thierolf  v.  Universal  Fire  Ins.  Co.,  110  Pa.  St.  37;  Mar- 
tin V.  Manufacturers'  Ace.  Ind.  Co.,  151  N.  Y.  95-106. 

"East  Texas  Fire  Ins.  Co.  v.  Coffee,  61  Tex.  287;  Knickerbocker 
Life  Ins.  Co.  v.  Norton,  96  U.  S.  234;  Argall  v.  Old  North  State  Ins. 
Co.,  84  K  C.  355;  Barre  v.  Council  Bluffs  Ins.  Co.,  76  Iowa,  609;  Ger- 
man Ins.  Co.  V.  Davis,  40  Neb.  700,  59  N.  W.  698;  Farmers'  Mut.  Fire 
Ins.  Co.  V.  Moyer,  97  Pa.  St.  441;  Enterprise  Ins.  Co.  v.  Parisot,  35 
Ohio  St.  35;  Lowry  v.  Lancashire  Ins.  Co.,  32  Hun  {N.  Y.),  329; 
Daniels  v.  Equitable  Fire  Ins.  Co.,  50  Conn.  551;  Blossom  v.  Lycom- 
ing Fire  Ins.  Co.,  64  N.  Y.  162;  Gristock  v.  Royal  Ins.  Co.,  87  Mich. 
428. 

"Dwelling  House  Ins.  Co.  v.  Dowdall,  159  111.  179;  Gauche  v.  Lon- 
don &  L.  Ins.  Co.,  10  Fed.  347. 

1"  Citizens'  Ins.  Co.  v.  Bland  (Ky.),  39  S.  W.  825. 

"  Baumgartel  v.  Providence  Wash.  Ins.  Co.,  61  Hun,  118,  15  N.  Y. 
Supp.  573. 

'=  Fillmore  v.  Great  Camp  K.  of  M.,  109  Mich.  13,  66  N.  W.  675. 

"  Kahn  v.  Traders'  Ins.  Co.,  4  Wyo.  419. 


§  185  GENERAL   PRINCIPLES.  551 

from  tlie  insurer  to  the  insured  stating  that  an  adjuster  would 
call  and  settle  a  loss,  followed  bj  an  investigation  of  the  loss 
by  such  adjuster  and  his  promise  to  settle.^^  Notice  and 
proof  are  waived  where  the  general  agent  of  the  insurer,  be- 
fore the  time  for  furnishing  proofs  has  expired,  informs  the 
insured  that  the  company's  adjuster  would  attend  to  the  loss, 
if  the  adjuster  afterwards  visits  the  premises  and  investigates 
the  loss  without  demanding  any  notice  or  proof  of  loss;^^ 
and  by  the  insurer  sending  an  agent  to  investigate  and  adjust 
the  loss  and  retaining  the  adjustment  without  objection  ;^^ 
and  by  the  insurer  taking  possession  of  the  damaged  property 
and  books  of  account  of  the  insured  and  investigating  the  ex- 
tent of  the  loss;^^  and  by  the  insurer  negotiating  with  the  in- 
sured concerning  an  adjustment  of  the  loss,  and  demanding 
a  submission  to  arbitration  free  from  amy  of  the  provisions 
or  conditions  prescribed  by  the  policy  ;^^  and  where  the  in- 
surer, after  being  notified  of  a  loss,  takes  possession  of,  and 
retains  the  insured  property  for  nineteen  days,  and  offers  to 
settle  for  the  amount  of  an  award,  and  denies  liability  on  other 
grounds  ;^^  and  where  the  secretary  of  the  insurer  leads  the 

"Fulton  V.  Phoenix  Ins.  Co.,  51  Mo.  App.  460;  Landrum  v.  Ameri- 
can Cent.  Ins.  Co.,  68  Mo.  App.  339;  Roberts  v.  Northwestern  Nat. 
Ins.  Co.,  90  Wis.  210,  62  N.  W.  1048;  Lake  v.  Farmers'  Ins.  Co.,  110 
Iowa,  473,  81  N.  W.  711. 

"Harris  v.  Phoenix  Ins.  Co.,  85  Iowa,  238,  52  N.  W.  128;  Gristock 
V.  Royal  Ins.  Co.,  87  Mich.  428,  49  N.  W.  634,  84  Mich.  161,  47  N.  W. 
549. 

^'  Fritz  V.  Lebanon  Mut.  Ins.  Co.,  154  Pa.  St.  384,  26  Atl.  7. 

"  St.  Paul  F.  &  M.  Ins.  Co.  v.  Gotthelf,  35  Neb.  351,  53  N.  W.  137. 

"Connecticut  Fire  Ins.  Co.  v.  Hamilton  (C.  C.  A.),  59  Fed.  258; 
Hamilton  v.  Phoenix  Ins.  Co.  (C.  C.  A.),  61  Fed.  379. 

"Caledonian  Ins.  Co.  v.  Traub,  80  Md.  214;  Western  Assur.  Co.  v. 
McCarty,  18  Ind.  App.  449,  48  N.  E.  265,  27  Ins.  Law  J.  187;  Helvetia 
Swiss  Fire  Ins.  Co.  v.  Edward  P.  Allis  Co.,  11  Colo.  App.  264,  53  Pao. 
242;  Weber  v.  Germania  Fire  -Ins.  Co.,  16  App.  Div.  596,  44  N.  Y. 
Supp.  976;  Murphy  v.  North  British  &  M.  Ins.  Co.,  70  Mo.  App.  78; 
Hartford  Fire  Ins.  Co.  v.  Keating,  86  Md.  130,  38  Atl.  29. 


552 


WAIVER   OF   NOTICE    AND    PKOOFS   OF   LOSS. 


§185 


insured  to  believe  that  he  need  do  nothing  more,  and  promises 
an  early  pajTuent  of  the  loss.^*'  Proofs  of  loss  are  waived  by 
the  adjuster  of  the  insurer  taking  a  written  sworn  statement 
of  the  insured  and  requiring  him  to  furnish  duplicate  bills 
of  goods,  and  telling  him  that  nothing  more  is  required,  and 
offering  a  partial  settlement  ;^^  and  by  any  act  of  the  insurer 
or  its  agents  which  interferes  with  full  compliance  on  the 
part  of  the  insured. ^^ 

The  insolvency  of  a  credit  insurance  company  which  makes 
an  assignment  nine  days  after  the  expiration  of  the  year  for 
which  the  policy  was  issued,  is  such  a  breach  of  the  contract 
that  the  insured  is  relieved  from  the  requirement  of  formal 
proofs  of  loss  which  he  would  otherwise  have  to  make.^^  An 
insurer  may  waive  the  furnishing  of  proofs  of  loss  in  favor 
of  a  garnishing  creditor  of  the  insured,  without  the  insured 
taking  any  part  in  the  waiver  or  having  any  knowledge 
thereof.^* 

No  Waiver. 

Proofs  of  loss  are  not  waived  by  the  insurer's  adjuster  vis- 
iting the  premises  and  making  a  partial  appraisal  of  the  prop- 
erty destroyed,  if  the  company  thereafter  insists  upon  the 
furnishing  of  proofs  and  an  appraisement  according  to  the 


''"  George  Dee  &  Sons  Co.  v.  Key  City  Fire  Ins.  Co.,  104  Iowa,  167, 
73  N.  W.  594;  Brock  v.  Des  Moines  Ins.  Co.,  106  Iowa,  30,  75  N.  W. 
683;  Hitchcock  v.  State  Ins.  Co.,  10  S.  D.  271,  72  N.  W.  898;  Perry  v. 
Dwelling  House  Ins.  Co.,  67  N.  H.  291,  33  Atl.  731. 

=' Wright  V.  London  Fire  Ins.  Ass'n,  12  Mont.  474,  19  L.  R.  A,  211: 
Gushing  v.  Williamsburg  City  Fire  Ins.  Co.,  4  Wash.  538. 

="  American  Cent.  Ins.  Co.  v.  Heaverin  (Ky.),  35  S.  W.  922,  25  Ins. 
Law  J.  711;  Young  v.  Grand  Council,  0.  A.,  63  Minn.  506,  65  N.  W. 
933;  George  Dee  &  Sons  Co.  v.  Key  City  Fire  Ins.  Co.,  104  Iowa,  167, 
73  N.  W.  594;  Perry  v.  Dwelling-House  Ins.  Co.,  67  N.  H.  291,  33  Atl. 
731. 

"  Smith  V.  National  Credit  Ins.  Co.,  65  Minn.  283,  33  L.  R.  A.  511. 

"  Ritter  v.  Boston  Underwriters'  Ins,  Co.,  28  Mo.  App.  140. 


§  185  -  GENERAL   PRINCIPLES.  553 

terms  of  the  policy,  T\-liicli  requires  tlie  appraisement  to  be  in 
writing  and  attached  to  the  proofs  j^^  nor  by  the  refusal  of 
an  adjuster  to  settle  a  loss  and  his  denial  of  liability  because  of 
a  change  in  the  use  of  the  bu'.ding  contrary-  to  the  conditions 
of  the  policy,  if  the  insurer  thereafter,  and  within  the  time 
when  proofs  can  be  furnished,  demands  proofs  of  the  insured 
and  furnishes  blanks  therefor  ;2®  nor  by  the  promise  of  an 
adjuster  to  settle  the  loss  if  the  insured  would  get  bills  and 
invoices  of  the  goods  destroyed,  where  the  company  immedi- 
ately thereafter,  and  while  yet  there  is  time  to  furnish  them, 
insists  upon  further  proofs  ;^'^  nor  by  a  general  agent  of  an 
insurer  stating,  in  reply  to  a  notice  claiming  loss  on  the 
policy,  that  the  notice  had  been  received  and  the  claim  would 
have  prompt  attention  ;^^  nor  by  the  promise  of  the  insurer 
to  call  the  attention  of  its  adjuster  to  a  loss  f-^  nor  by  the  col- 
lection by  an  insurer,  after  a  loss,  of  a  note  given  for  part  of 
the  premium- on  a  policy  covering  the  loss"^*^  nor  by  the  fur- 
nishing to  the  insured  at  his  request  a  copy  of  the  policy  after 
the  time  for  making  proofs  has  expired  ;-^^  nor  by  the  failure 
pf  the  insurer  to  demand  proofs  of  loss  or  to  voluntarily  fur- 
nish blanks  therefor.^ ^ 

An  omission  to  give  notice  and  make  proofs  of  loss  in 
compliance  with  the  requirements  of  the*  policy  of  a  mutual 
insurance  company  is  not  waived  by  a  statement  of  the  presi- 

"  Scottish  U.  &  N.  Ins.  Co.  v.  Clancy,  83  Tex.  113.  18  S.  W.  439. 

="  Hahn  v.  Guardian  Assiir.  Co.,  23  Or.  576,  32  Pac.  683. 

''Allen  V.  Milwaukee  Mechanics'  Ins."  Co.,  106  Mich.  204,  64 
N.  W.  15. 

'"^  German  Ins.  Co.  v.  Davis,  40  Neb.  700,  59  N.  W.  698;  Kirkman  v. 
Farmers'  Ins.  Co.,  90  Iowa,  457,  57  N.  W.  952;  Welsh  v.  Des  Moines 
Ins.  Co.,  71  Iowa,  337,  32  N.  W.  369,  77  Iowa,  376,  42  N.  W.  324, 

^'^  Burlington  Ins.  Co.  v.  Kennerly,  60  Ark.  532. 

'"  Shimp  V.  Cedar  Rapids  Ins.  Co.,  26  111.  App.  254. 

"'  Kirkman  v.  Farmers'  Ins.  Co..  90  Iowa,  457,  57  N.  W.  952. 

'' Continental  Ins.  Co.  v.  Dorman,  125  Ind.  189. 


554  WAIVER    OF    NOTICE    AND    TEOOFS    OF    LOSS.  §  185 

dent  of  tlie  company  made  seventeen  months  after  the  loss 
that  the  company  would  he  disposed  to  do  what  was  right,  that 
they  knew  at  the  time  of  the  fire  that  it  was  their  loss  and  were 
surprised  that  they  were  not  notified;  nor  by  a  subsequent 
direction  from  the  officers  of  the  company  to  one  of  the  as- 
signees in  insolvency  of  the  insured,  in  reply  to  a  verbal  claim 
of  Ibss  made  by  him,  to  have  a  statement  of  the  loss  sent  to 
them  and  they  would  take  the  subject  into  consideration ;  nor 
by  a  subsequent  vote  of  the  directors  to  require  the  insured  to 
make  a  statement  of  the  loss  to  them.  Nor  does  the  know- 
ledge of  the  agent  of  the  insurer  that  a  loss  has  occurred  relieve 
the  insured  from  the  duty  of  giving  notice  and  making  proofs 
of  loss  according  to  the  stipulations  of  the  policy.^^ 

The  making  of  specific  objections  to  proofs  of  loss  which 
have  been  served,  waives  nothing  more  than  the  right  to  make 
objections  on  the  grounds  not  specified.^"*  The  furnishing  of 
proofs  is  not  waived  by  a  special  agent  of  the  insurer  refusing 
to  pay  the  loss,  and  stating  that  he  neither  admitted  nor 
denied  the  company's  liability,  where  it  was  subsequently 
agreed  between  insurer  and  insured  that  such  agent  should 
examine  the  facts  concerning  the  loss  without  waiving  any  of 
the  terms  of  the  policy  f^  nor  by  a  general  local  agent  of  the 
insurance  company  notifying  the  insured  that  an  adjuster 
would  visit  him  on  a  certain  day,  and  asking  the  insured  to 
have  his  appraiser  ready  to  participate  in  an  appraisement  at 
that  time.^^ 

The  provisions  of  a  policy  requiring  the  proofs  of  loss  to  be 
furnished  within  a  given  time,  are  not  'waived  by  any  acts  or 
conduct  of  the  company  after  the  lajjse  of  such  time,  unless 

=«  Smith  V.  Haverhill  Mut.  Fire  Ins.  Co.,  1  Allen  (Mass.),  297. 
'■*  Sheehan  v.  Southern  Ins.  Co.,  53  Mo.  App.  351. 
"Insurance  Co.  of  North  America  v.  Caruthers  (Miss.),  16  So.  911. 
*"  Harrison  v.  Hartford  Fire  Ins.  Co.,  59  Fed.  732. 


§  186  WAIVER   OF    NOTICE    NOT    WAIVER   OF   PROOF.  555 

tlie  doctrine  of  estoppel  can  be  invoked  in  favor  of  the  in- 
sured.^''^  An  implied  waiver  of  either  notice  or  proofs  of 
loss  must  be  based  upon  the  acts  and  conduct  of  the  insurer 
after  it  had  knowledge  of  the  loss.^^ 

Waiver  of  Notice  Not  Waiver  of  Proof. 

§  186.  The  mere  waiver  of  notice  of  loss  is  not  of  itself  a 
waiver  of  proofs  of  loss. 

Though  the  principles  of  the  law  of  waiver  regulating  the 
giving  of  proofs  of  loss  are  applicable  to  the  waiver  of  notice 
of  loss,  it  must  be  borne  in  mind  that  both  notice  and  proofs 
are  frequently  required  to  be  given.  While  the  furnishing 
of  proofs  within  the  time  for  furnishing  notice  may  sometimes 
dispense  with  the  notice,  the  converse  is  not  true.  Thus  Avhere 
a  policy  requires  the  insured  to  give  both  notice  and  proofs  of 
loss,  the  mere  giving  of  a  preliminary  notice  in  due  time  is 
not  sufficient,  even  though  "the  insurer  does  not  1  hereafter 
demand  proofs ;  and  the  waiver  of  the  giving  of  notice  is  not 
a  waiver  of  the  provision  requiring  a  giving  of  proofs.^^ 

The  giving  of  preliminary  notice  of  loss  is  waived  by  the 
insurer  if  it  receives  and  retains  proofs  of  loss  without  objec- 
tion and  thereafter  requests  the  insured  to  furnish  further 
and  amended  proofs  of  loss,  or  does  any  other  act  recognizing 

'•Bolan  V.  Fire  Ass'n  of  Philadelphia,  58  Mo.  App.  225;  Cohn  v. 
Orient  Ins.  Co.,  62  Mo.  App.  271;  Edwards  v.  Baltimore  Fire  Ins. 
Co.,  3  Gill  (Md.),  176,  2  Bennett,  Fire  Ins.  Cas.  405;  Ermentrout  v. 
Girard  F.  &  M.  Ins.  Co.,  63  Minn.  305,  30  L.  R.  A.  346;  Albers  v. 
Phoenix  Ins.  Co.,  68  Mo.  App.  543.  See,  also,  ante,  first  sections  this 
chapter. 

«' Alston  V.  Northwestern  Live  Stock  Ins.  Co.,  7  Kan.  App.  179,  53 
Pac.  784;  Glohe  Mut.  Life  Ins.  Co.  v.  Wolff,  95  U.  S.  326;  Bennecke 
V.  Connecticut  Mut.  Life  Ins.  Co.,  105  U.  S.  355. 

»» O'Reilly  v.  Guardian  Mut.  Life  Ins.  Co.,  60  N.  Y.  169;  Lane  v. 
St.  Paul  F.  &  M.  Ins.  Co.,  50  Minn.  227;  De  Silver  v.  State  Mut.  Ins. 
Co.,  38  Pa.  St.  130;  Armstrong  v.  Agricultural  Ins.  Co.,  130  N.  Y.  566, 
29  N.  E.  994. 


550  WAIVER    OF    NOTICE    AND    PKOOFS    OF    LOSS.  §   187 

its  liability  on  tlie  policy  and  from  which  a  waiver  of  notice 
can  be  inferred, ^*^  Thus  an  accident  insurance  companj^ 
waives  the  provision  in  a  policy  requiring  immediate  notice 
of  accident  by  furnishing  the  assured  blanks  upon  which  to 
make  proofs  of  disability  without  objecting  to  the  failure  to 
give  notice.  ^^ 

Stipulations  of  Policy. 

§  187.  Stipulations  in  insurance  policies  restricting  the  form 
and  manner  of  waiver  of  proofs  or  notice  of  loss  are  binding 
upon  local  agents  and  agents  of  limited  powers,  but  not  upon 
general  agents. 

Many  cases  hold  that  the  stipulations  in  a  policy  to  the 
effect  that  no  officer,  agent  or  representative  of  the  insurer 
shall  have  power  to  waive  any  of  the  provisions  or  conditions 
of  the  policy  unless  in  writing  and  endorsed  upon  the  policy 
itself,  are  applicable  only  to  the  cpnduct  and  powers  of  agents 
as  related  to  matters  connected  with  the  issuing  of  the  policy 
and  happening  prior  to  the  occurrence  of  a  loss,  and  do  not 
apply  to  matters  and  conditions  arising  after  the  happening 
of  a  loss  and  therefore  not  to  a  waiver  of  notice  or  proofs  of 
loss  ;^^  nor  to  such  a  waiver  of  proofs  as  arises  by  operation 

^^Weed  V.  Hamburg-Bremen  Fire  Ins.  Co.,  133  N.  Y.  394;  Partridge 
V.  Milwaukee  Mechanics'  Ins.  Co.,  13  App.  Div.  519,  43  N.  Y.  Supp. 
632;  Travellers'  Ins.  Co.  v.  Edwards,  122  U.  S.  457;  Crenshaw  v.  Pa- 
cific Mut.  Life  Ins.  Co.,  71  Mo.  App.  42;  Standard  Life  &  Ace.  Ins. 
Co.  V.  Davis,  59  Kan.  521,  53  Pac.  856,  27  Ins.  Law  J.  898;  Covenant 
Mut.  Life  Ass'n  v.  Baughman,  73  111.  App.  544. 

"  Crenshaw  v.  Pacific  Mut.  Life  Ins.  Co.,  71  Mo.  App.  42. 

^American  Fire  Ins.  Co.  v.  Sisk,  9  Ind.  App.  305,  36  N.  E.  659; 
Washburn-Halligan  Coffee  Co.  v.  Merchants'  Brick  Mut.  Fire  Ins. 
Co.,  110  Iowa,  423,  81  N.  W.  709;  Concordia  Fire  Ins.  Co.  v.  John- 
son, 4  Kan.  App.  7,  45  Pac.  722;  Loeb  v.  American  Cent.  Ins.  Co.,  99 
Mo.  50;  Lake  v.  Farmers'  Ins.  Co.,  110  Iowa,  473,  81  N.  W.  711;  Har- 
rison V.  German-American  Fire  Ins.  Co.,  67  Fed.  577;  Rokes  v. 
Amazon  Ins.  Co.,  51  Md.  512;  Flaherty  v.  Continental  Ins.  Co.,  20 
App.  Div.  (N.  Y.)   275. 


§  187  STIPULATION'S    OF    POLICY.  557 

of  law  from  a  denial  of  liability,  but  only  to  acts  clone  before 
the  policy  becomes  a  demand  against  the  insurer,^^  Others 
hold  that  they  are  binding  and  valid  and  govern  the  rights  of 
the  parties  to  the  contract  in  so  far  as  the  acts  of  agents  of 
limited  and  restricted  powers  are  concerned,  and  when  a 
waiver  is  sought  to  be  predicated  upon  their  acts  or  conduct 
but  not  according  to  the  provisions  of  the  policy  ;^^  but  are 
not  binding  upon  the  officers  or  adjusters  or  general  agents  of 
the  insurer  in  their  dealings  with  the  assured  after  a  loss  has 
occurred.  ^^ 

The  true  rule  would  seem  to  be  that  any  insurer  has  the 
right  to  limit  the  powers  of  its  agent  by  suitable  conditions  in 
the  ix)licy,  and  of  these  limitations  the  insured  is  bound  to  take 
notice  after  the  policy  has  been  delivered  to  him ;  that  an  in- 
surer cannot  by  general  stipulations  against  waiver,  or  by  stip- 
ulations that  waiver  must  be  in  writing  and  indorsed  upon  the 
policy,  so  limit  its  capacity  to  contract  that  it  cannot  by  and 
through  proper  agents  make  an  oral  waiver  not  forbidden  by 
statute.  Insurers  are  usually  corporations  and  as  such  can 
only  act  through  their  agents.  Provisions  in  the  policies  are 
inserted  by  them  and  can  be  changed  at  any  time  by  any 

.  *^Fire  Ass'n  of  Philadelphia  v.  Jones  (Tex.  Civ.  App.),  40  S.  W. 
44;  Bishop  v.  Agricultural  Ins.  Co.,  9  N.  Y.  Supp.  350;  Goodwin  v. 
Massachusetts  Mut.  Life  Ins.  Co.,  73  N.  Y.  480;  Franklin  Fire  Ins. 
Co.  V.  Chicago  Ice  Co.,  36  Md.  102. 

^•Kirkman  v.  Farmers'  Ins.  Co.,  90  Iowa,  457,  57  N.  W.  952; 
Knudson  v.  Hekla  Fire  Ins.  Co.,  75  Wis.  198;  Gould  v.  Dwelling- 
House  Ins.  Co.,  90  Mich.  302,  51  N.  W.  455;  Quinlan  v.  Providence 
Wash.  Ins.  Co.,  133  N.  Y.  364;  Oshkosh  Match  Works  v.  Manchester 
Fire  Assur.  Co.,  92  Wis.  510,  66  N.  W.  525. 

^^  Powers  V.  New  England  Fire  Ins.  Co.,  68  Vt.  390;  Brock  v.  Des 
Moines  Ins.  Co.,  106  Iowa,  30,  75  N.  W.  683;  American  Cent.  Ins.  Co. 
V.  Heaverin  (Ky.),  35  S.  W.  922;  Heusinkveld  v.  St.  Paul  F.  &  M. 
Ins.  Co.,  106  Iowa,  229,  76  N.  W.  696;  Concordia  Fire  Ins.  Co.  v. 
Johnson,  4  Kan.  App.  7,  45  Pac.  722;  Carroll  v.  Girard  Fire  Ins.  Co., 
72  Cal.  297;  Phenix  Ins.  Co.  v.  Bowdre,  67  Miss.  620. 


55S  WAIVER    OF    NOTICE    AND    PEOOFS    OF    LOSS.        §§  188-190 

duly  authorized  agent  with  the  consent  of  the  insured.  Any 
agent,  general  or  otherwise,  who  is  authorized  to  represent  the 
insurer  in  adjusting  or  settling  a  loss,  has,  as  a  necessaiy  in- 
cident to  the  proper  discharge  of  his  duties,  the  power  to 
dispense  with  those  stipulations  inserted  for  the  benefit  of  the 
company  and  which  have  reference  to  the  mode  of  ascertain- 
ing the  liability  or  limiting  the  right  of  action.  Whether  or 
not  any  particular  agent  has  the  power  to  make  an  oral  waiver 
of  a  condition,  notwithstanding  the  provisions  of  the  policy 
requiring  such  waiver  to  be  in  writing  indorsed  on  the  policy, 
must  be  determined  as  a  question  of  fact  according  to  the  gen- 
eral rules  of  the  law  of  agency ;  and  whether  or  not  a  waiver 
actually  took  place  is  ordinarily  a  simple  question  of  f  act.^^ 

What  Agents  can  Waive. 

§  188.  Whether  or  not  a  given  insurance  agent  can  waive 
notice  or  proofs  of  loss,  death,  or  accident,  depends  not  so 
much  upon  the  classification  of  the  agent,  as  upon  the  author- 
ity which  his  principal  has  given  him  or  has  allowed  him  to 
exercise,  or  has  held  him  out  as  possessing. 

Power  in  an  agent  must  be  proved  by  the  one  asserting  it. 

§  189.  General  agents  and  adjusters  can  waive  notice  and 
proofs  of  loss. 

§  190.  The  better  rule  is  that  merely  local  agents,  1.  e.  agents 
authorized  only  to  fix  rates,  countersign  and  deliver  policies, 

*°  Farnum  v.  Phoenix  Ins.  Co.,  83  Cal.  246;  Ruthven  v.  American  Fire 
Ins.  Co.,  102  Iowa,  550,  71  N.  W.  577;  Kirkman  v.  Farmers'  Ins.  Co.,  90 
Iowa,  457,  57  N.  W.  952;  Brock  v.  Des  Moines  Ins.  Co.,  106  Iowa,  30, 
75  N.  W.  683;  Westchester  Fire  Ins.  Co.  v.  Earle,  33  Mich.  143;  Knick- 
erbocker Life  Ins.  Co.  v.  Norton,  96  U.  S.  234;  Berry  v.  American 
Cent.  Ins.  Co.,  132  N.  Y.  49;  Phenix  Ins.  Co.  v.  Bowdre,  67  Miss.  620; 
Oshkosh  Match  Works  v.  Manchester  Fire  Assur.  Co.,  92  Wis.  516; 
Searle  v.  Dwelling-House  Ins.  Co.,  152  Mass.  263;  Dwelling-House 
Ins.  Co.  V.  Dowdall,  159  111.  179;  Hartford  Life  &  Annuity  Ins.  Co. 
v.  Hayden's  Adm'r,  90  Ky.  46;  Lowry  v.  Lancashire  Ins.  Co.,  32  Hun 
(N.  Y.),  331;  Steen  v.  Niagara  Fire  Ins.  Co.,  89  N.  Y.  3^6;  Blake  v. 
Exchange  Mut.  Ins.  Co.,  12  Gray  (Mass.),  265;  Lake  v.  Farmers'  Ins. 
Co.,  110  Iowa,  473,  81  N.  W.  711. 


§  190  WHAT    AGENTS    CAN    WAIVE.  559 

and  collect  premiums,  have  no  power  to  waive  either  notice  or 
proofs. 
A  contrary  rule  prevails  in  some  jurisdictions. 

The  General  Rule. 

The  power  of  any  agent  to  waive  proofs  or  notice  of  loss 
depends  upon  tlie  real  or  apparent  authority  with  which  his 
principal  has  clothed  him.  Broadly  speaking,  general  and 
adjusting  agents  have  the  power  to  waive  notice  or  proofs; 
special  or  local  agents  have  not  that  power.  It  is  impossible 
to  lay  down  an  absolute  rule,  wdiich  will  specify  definitely 
what  agents  and  classes  of  agents  have  or  have  not  the  power 
to  waive  notice  or  proofs  of  loss,  or  to  bind  the  insurer  by  other 
acts  from  which  waiver  might  be  presumed  if  the  power  to 
waive  existed  in  the  agent.  The  designation  of  an  agent  as 
a  general  agent  or  a  local  agent  gives  no  clear  or  precise  idea 
of  his  powers.  There  are  local  general  agents  and  general 
local  agents,  and  these  terms  are  often  used  as  merely  de- 
scriptive of  the  territory  within  which  an  agent  of  any  class 
operates.  An  agent  of  an  insurance  company  possesses  only 
such  powders  in  any  particular  as  have  been  conferred  verbally 
01*  by  instrument  of  authorization,  or  such  as  his  principal 
has  clothed  him  with  or  has  held  him  out  as  possessing. 
Where. the  act  or  representation  of  an  agent  is  alleged  to  be 
that  of  an  insurer  and  therefore  binding  upon  the  latter,  the 
test  of  liability  is  the  same  as  in  other  cases  of  agency.  No 
maxim  is  better  settled  in  the  law  than  that  a  principal  is  not 
bound  by  the  acts  of  an  agent  done  outside  of  the  known 
limitation  of  his  authority ;  and  it  is  immaterial  whether  the 
agent  be  general  or  special,  because  the  principal  may  limit 
the  powers  of  one  as  well  as  of  the  other.  But  an  agent  can 
always  bind  his  principal  by  acts  performed  within  the  scope 
of  his  real  or  apparent  authority,  and  secret  limitations  upon 
his  authority  affect  only  those  to  whom  they  are  published  or 


560  WAIVER   OF    NOTICE    AND    PROOFS    OF   LOSS,  §  190 

known.  Whether,  therefore,  an  agent  in  a  given  case  has  the 
power  to  waive  notice  or  proofs  of  loss  absolutely,  or  only  in 
a  particular  manner,  or  at  all,  and  whether  waiver  actually 
did  take  place,  must  be  determined  not  so  much  from  the 
classification  of  the  agent  as  from  the  facts  and  circumstances 
of  the  case  interpreted  in  the  light  of  all  the  acts,  conduct,  and 
relations  of  the  agent  and  principal  between  themselves  and 
toward  the  public  or  the  individual  asserting  the  waiver.^'^ 

Waiver  of  notice  or  proofs  of  loss  cannot  be  shbwn  by  the 
acts  of  an  agent  or  adjuster  without  proof  of  his  authority  to 
act  for  the  insurer  in  that  connection ;  and  the  one  asserting 
waiver  of  j^roofs  or  notice  by  an  agent,  must  prove  that  the 
•agent  represented  the  insurer  and  possessed  the  power  which 
is  asserted  to  be  in  him.^^  And  the  mere  assumption  of 
authority  by  an  agent  and  reliance  thereon  by  the  insured 
will  not  bind  the  insurer  in  the  absence  of  evidence  of  au- 
thority conferred  or  recogTiition  by  it."*^ 

"Knickerbocker  Life  Ins.  Co.  v.  Norton,  96  U.  S.  234;  Famum  v. 
Phcenix  Ins.  Co.,  83  Cal.  246;  Qiiinlan  v.  Providence  Wash.  Ins.  Co., 
133  N.  Y.  365;  Weidert  v.  State  Ins.  Co.,  19  Or.  261;  Dwelling  House 
Ins.  Co.  V.  Dowdall,  159  111.  179;  Lowry  v.  Lancashire  Ins.  Co.,  32 
Hun  (N.  Y.),  331.  See,  ante,  c.  8,  "Agents,"  and  ante,  "Stipulations 
of  Policy." 

Where  the  contract  in  suit  was  issued  by  a  foreign  company  em- 
powered to  do  business  in  Maryland  on  condition  that  its  agent  was 
required  to  have  authority  "from  the  parent  office  or  offices  to  settle 
losses  without  the  interference  of  the  officer  or  officers  of  the  said 
parent  office  or  offices,"  it  was  held  that  such  an  agent  could  bind 
his  principal  by  waiving  proofs.  Home  Ins.  Co.  v.  Baltimore  Ware- 
house Co.,  93  U.  S.  527,  546. 

"Barre  v.  Council  Bluffs  Ins.  Co.,  76  Iowa,  609;  German  Ins.  Co. 
V.  Davis,  40  Neb.  700,  59  N.  W.  698;  Weidert  v.  State  Ins.  Co.,  19  Or. 
261;  Albers  v.  Phcenix  Ins.  Co.,  68  Mo.  App.  543;  East  Texas  Fire 
Ins.  Co.  V.  Coffee,  61  Tex.  287. 

"Bowlin  v.  Hekla  Fire  Ins.  Co.,  36  Minn.  435;  Bush  v.  Westchester 
Fire  Ins.  Co.,  63  N.  Y.  531. 


§  190  WHAT   AGENTS   CAN    WAIVE.  561 

General  Agents. 

A  general  agent  of  an  insurer,  i.  e.,  an  agent  who  lias  ex- 
clusive charge  and  control  of  h,' .  principal's  interests  within 
a  given  territory,  is  within  that  territory  a  vice-principal  and 
as  such  has  the  power  to  waive  notice  or  proofs.^'' 

■"'Bishop  V.  Agricultural  Ins.  Co.,  9  N.  Y.  Supp.  350;  Brock  v.  Des 
Moines  Ins.  Co.,  106  Iowa,  30.  75  N.  W.  684;  Smith  v.  Niagara  Fire 
Ins.  Co.,  60  Vt.  682;  American  Cent.  Ins,  Co,  v.  Heaverin  (Ky.),  35 
S.  W.  922;  Minneapolis,  St.  P.  &  S.  S.  M.  Ry.  Co.  v.  Home  Ins.  Co., 
64  Minn.  63;  Lamherton  v.  Connecticut  Fire  Ins.  Co.,  39  Minn.  129, 
1  L.  R.  A.  222;  German  Ins.  Co.  v.  Gray,  43  Kan.  497,  8  L.  R.  A.  70. 
See  cases  supra. 

Agents  who  have  authority  to  settle  losses  may  dispense  with 
stipulations  for  the  benefit  of  their  principal  which  refer  to  the 
mode  of  ascertaining  its  liability  and  limiting  the  right  of  action, 
against  it.  Little  v.  Phoenix  Ins.  Co.,  123  Mass.  380,  citing  Eastera 
R.  Co.  V.  Relief  Fire  Ins.  Co.,  105  Mass.  570;  Kennebec  Co.  v.  Au- 
gusta Insurance  &  Banking  Co.,  6  Gray  (Mass.),  204;  Gloucester  Mfg. 
Co.  V.  Howard  Fire  Ins.  Co.,  5  Gray  (Mass.),  497. 

An  agent  intrusted  with  policies,  and  given  power  to  insure, 
may  waive  the  notice  and  proof  of  loss  required  by  the  policy,  not- 
withstanding a  provision  that  no  agent  shall  have  power  to  waive 
any  of  the  conditions  of  the  policy.  Fire  Ass'n  of  Philadelphia  v. 
Jones  (Tex.  Civ.  App.),  40  S.  W.  44;  Smaldone  v.  Insurance  Co.  of 
North  America,  15  App.  Div.  232,  44  N.  Y.  Supp.  201;  O'Brien  v. 
Ohio  Ins.  Co.,  52  Mich.  131;  Springfield  F.  &  M.  Ins.  Co.  v.  Da\is 
(Ky.),  37  S.  W.  582;  Fisher  v.  Crescent  Ins.  Co.,  33  Fed.  544;  Snyder 
V.  Dwelling-House  Ins.  Co.,  59  N.  J.  Law,  544,  37  Atl.  1022,  26  Ins. 
Law  J.  905. 

The  general  manager  of  a  department  of  an  insurance  company 
has  power,  in  connection  with  policies  issued  within  his  department, 
to  orally  waive  the  conditions  of  the  policy  requiring  proofs  of  loss, 
although  the  policy  itself  requires  all  waivers  to  be  in  writing  and 
attached  thereto.  Ruthven  v.  American  Fire  Ins.  Co.,  102  Iowa,  550, 
71  N.  W.  574,  citing  Dwelling  House  Ins.  Co.  v.  Dowdall,  159  111.  179; 
Berry  v.  American  Cent.  Ins.  Co.,  132  N.  Y.  49;  Hartford  Life  &  An- 
nuity Ins.  Co.  V.  Hayden's  Adm'r,  90  Ky.  46;  Rokes  v.  Amazon  Ins. 
Co.,  51  Md.  512,  34  Am.  Rep.  323;  Lamberton  v.  Connecticut  Fire 
Ins.  Co.,  39  Minn.  129,  1  L,  R.  A.  222;  Farnum  v.  Phoenix  Ins.  Co.,  83 
Cal.  246;  Phenix  Ins.  Co.  v.  Bowdre,  67  Miss.  620;  Westchester  Fire 
Ins.  Co.  V.  Earle,  33  Mich.  143;   Dick  v.  Equitable  F.  &  M.  Ins.  Co., 

KERR,  INS.—  86 


562  WAIVER   OF   NOTICE   AND   PEOOFS   OF    LOSS.  §  190 

Local  Agent. 

A  local  agent,  that  is,  one  wlio  is  authorized  merely  to  fix 
rates  of  insurance  and  countersign  and  deliver  policies  and 
collect  premiums,  cannot  after  a  loss  waive  the  provisions  of 
a  policy  requiring  notice  and  proofs  of  loss.  In  the  matter 
of  the  original  contract,  and  while  the  property  which  is  the 
subject  of  it  continues  as  it  was  when  insured,  the  local  agent 

92  Wis.  46;  Renier  v.  Dwelling  House  Ins.  Co.,  74  Wis.  89;  Knicker- 
bocker Life  Ins.  Co.  v.  Norton,  96  U.  S.  234,  24  L.  ed.  689;  Searle  v. 
Dwelling  House  Ins.  Co.,  152  Mass.  263.  Distinguishing  Kirkman  v. 
Farmers'  Ins.  Co.,  90  Iowa,  457;  Zimmerman  v.  Home  Ins.  Co.,  77 
Iowa,  686. 

Service  upon  the  agent  who  issues-  the  policy  is  suflRcient,  Green- 
lee V.  Hanover  Ins.  Co.,  104  Iowa,  481,  73  N.  W.  1050.  The  statement 
of  the  agent  who  issued  the  policy  and  collected  the  premium,  made 
within  the  time  for  furnishing  proofs,  that  the  company  refused  to 
pay  the  loss,  waives  the  furnishing  of  proofs.  But  proofs  are  not 
waived  by  such  a  statement  made  after  the  expiration  of  the  time 
for  furnishing  them.  Phenix  Ins.  Co.  v.  Searles,  100  Ga.  97,  27  S.  E. 
779. 

Waiving  the  condition  as  to  formal  proofs  of  loss  is  at  least 
within  the  scope  of  the  apparent  authority  of  a  special  agent  of  an  - 
insurer,  sent  by  it  to  view  the  ruins,  investigate  the  loss,  and  find 
out  as  much  about  it  as  he  could,  who,  being  consulted  with  by  the 
local  agent  as  to  when  the  policy  would  be  paid,  replied  author- 
itatively, and  to  whom  the  proofs  of  loss  when  made,  were  finally 
turned  over,  together  with  the  whole  matter,  for  such  steps  as  he 
should  deem  proper.  Hartford  Fire  Ins.  Co.  v.  Keating,  86  Md.  130, 
38  Atl.  29;  Travellers'  Ins.  Co.  v.  Edwards,  122  U.  S.  457,  7  Sup.  Ct.  ' 
1249. 

An  agent  with  authority  to  waive  proofs  of  loss  may  also  waive 
a  provision  of  the  policy  requiring  such  waiver  to  be  indorsed  on  the 
policy.  O'Leary  v.  German  American  Ins.  Co.,  100  Iowa,  390,  69 
N.  W.  686. 

Standard  policy:  A  provision  in  a  standard  policy  that  no  agent 
shall  have  power  to  waive  any  of  its  conditions,  except  by  a  writing 
indorsed  on  or  attached  to  the  policy,  is  valid,  and  a  verbal  waiver 
of  proofs  of  loss  by  him  is  not  binding  on  the  company.  Wadhams 
V.  Western  Assur.  Co.,  117  Mich.  514,  76  N.  W.  6;  Straker  v.  Phenix 
Ins.  Co.,  101  Wis.  413,  77  N.  W.  753;  Anderson  v.  Manchester  Fire 
Assur.  Co.,  59  Minn.  189. 


§  190  .  WHAT    AGENTS    CAN    WAIVE.  563 

who  issued  the  policy  must  be  deemed  to  be  possessed  of  cer- 
tain incidental  powers  by  virtue  of  which  he  may  waive  cer- 
tain conditions  in  the  policy;  but  when  a  loss  occurs,  which 
gives  rise  to  the  assertion  of  a  claim  against  the  insurer,  the 
proceedings  to  establish  and  enforce  such  a  claim  are  not 
impliedly  embraced  within  the  scope  of  such  an  agency.  It  is 
not  to  be  presumed  in  the  absence  of  express  authority,  or 
conduct  on  the  part  of  the  company  from  which  it  may  be 
implied,  that  such  an  agent,  commonly  termed  a  local  agent,  is 
empowered  to  suggest  or  agree  to  a  different  mode  of  settle- 
ment or  to  bind  the  company  by  any  different  line  of  pro- 
cedure than  that  designated  in  the  policy.^  ^ 

In  What  States  Local  Agents  can  Waive. 

The  authorities  on  both  sides  of  this  question  are  very 
thoroughly  discussed  and  fully  cited  in  a  recent  Missouri 
case.^^     The  court  said: 

"The  legal  proposition  to  be  decided  is  whether  an  agent  of 
an  insurance  company,  who  has  power  to  effect  insurance, 
countersign  policies,  and  collect  premiums,  has  prima  facie 
power  to  waive  proof  of  loss.  *  *  *  Wood  on  Insur- 
ance (2d  Ed.,  p.  915,  §  429)  lays  down  the  doctrine  that  an 

"  Lohnes  v.  Insurance  Co.  of  North  America,  121  Mass.  439;  Bowlin 
V.  Hekla  Fire  Ins.  Co.,  36  Minn.  435;  Bush  v.  Westchester  Fire  Ins. 
Co.,  63  N.  Y.  531;  Shapiro  v.  Western  Home  Ins.  Co.,  51  Minn.  239; 
Shapiro  v.  St.  Paul  F.  &  M.  Ins.  Co.,  61  Minn.  136;  Knudson  v. 
Hekla  Fire  Ins.  Co.,  75  Wis.  198,  43  N.  W.  954;  Gould  v.  Dwelling- 
House  Ins.  Co.,  90  Mich.  302;  Harrison  v.  Hartford  Fire  Ins.  Co.,  59 
Fed.  732;  Burlington  Ins.  Co.  v.  Kennerly,  60  Ark.  532;  Smith  v. 
Niagara  Fire  Ins.  Co.,  60  Vt.  682,  1  L.  R.  A.  217;  McCollum  v.  North 
British  &  Mercantile  Ins.  Co.,  65  Mo.  App.  304;  Van  Allen  v.  Farmers' 
Joint  Stock  Ins.  Co.,  64  N.  Y.  469;  Ermentrout  v.  Girard  F.  &  M.  Ins. 
Co.,  63  Minn.  305,  30  L.  R.  A.  347;  Engebretson  v.  Hekla  Fire  Ins. 
Co.,  58  Wis.  301. 

"  Nickell  V.  Phoenix  Ins.  Co.,  144  Mo.  420,  46  S.  W.  435,  27  Ins.  Law 
J.  880. 


564:  WAIVER    OF    NOTICE    AND    PROOFS    OF    LOSS.  §  190 

agent  "who  has  authority  to  issue  and  countersign  policies  has 
no  authority  to  adjust  and  settle  losses,  or  to  waive  the  per- 
formance of  conditions  in  the  policy ;  that  ratification  by  the 
company  of  the  acts  of  such  agent  must  be  shown.  Ostrander 
on  Insurance  (2d  Ed.,  p.  19Y,  §  27)  says  the  local  agent's 
power  to  waive  proof  of  loss  depends  upon  his  authority  to 
settle  claims,  and  that  as  the  duties  of  a  local  agent  and  of 
an  adjuster  are  different,  the  local  agent  cannot  waive  proof 
of  loss,  unless  it  is  shown  that  he  had  authority  to  settle  claims, 
or  had  apparent  authority,  as  shown  by  previous  dealings  of 
the  company.  This  view  of  the  law  is  also  laid  down  in  the 
following  cases.^^  *  *  *  These  cases  proceed  upon  the 
assumption  that  an  agent  who  has  power  to  effect  a  contract  of 
insurance,  to  coim.tersign  policies  in  order  to  give  them  vital- 
ity and  binding  force,  and  to  collect  premiums,  is  a  special, 
limited  agent,  and  not  a  general  agent,  and  that  the  duties  and 
powers  of  such  a  special  and  hmited  agent  do  not  authorize 
him  to  waive  proof  of  loss.  On  the  other  hand,  a  contrary 
view  of  the  law  is  adopted  by  the  following  text  writers,  and  in 
the  following  cases :  May  on  Insurance  (3d  Ed.,  §§  461,  463) 
says  that  the  notice  and  proof  of  loss  is  intended  for  the  bene- 
fit of  the  insurer,  and  notwithstanding  the  policy  requires  it  to 
be  in  writing,  nevertheless,  if  the  company  receives  it,  although 
it  comes  from  a  local  agent  of  the  company,  upon  information 
communicated  to  him  by  the  assured,  it  is  sufficient ;  and  that 
even  in  cases  where  the  policy  provides  that  it  must  be  given 
to  the  manager,  'or  to  some  known  agent  of  the  company,^ 
and  the  policy  had  been  negotiated  through  a  local  agent,  and 
the  business  of  the  insurer,  before  the  loss,  was,  without 
notice  to  the  assured,  transferred  to  another  company,  notice 
to  the  local  agent  is  sufficient.  Joyce  on  Insurance  (sec- 
tion 537)  says  that  where  a  foreign  insurance  company  has 

"  Citing  some  of  cases  in  note  51,  ante. 


§  190  WHAT    AGENTS    CAN    WAIVE.  565 

no  general  agent  in  tlie  state,  but  employs  a  local  agent  to 
represent  it,  such  agent  has  power  to  bind  the  company  by 
waiving  a  forfeiture,  or  by  construing  doubtful  language  in 
the  policy  when  called  on  by  the  insured  for  information,  and 
cites  Hotchkiss  v.  Phoenix  Ins.  Co.^^^  as  authority.  The 
same  author,  in  section  583,  lays  down  the  rule  that  'an  agent 
intrusted  with  policies  signed  in  blank,  and  authorized  to 
iill  out  and  deliver  them,  may  waive  proof  of  loss,'  and  cites 
in  support  of  the  text:^^  *  *  *  Biddle  on  Insurance 
(sec.  1136)  says  proof  of  loss  may  be  waived,  as  where  the  in- 
surer or  his  authorized  representative  tells  the  insured  not  to 
present  such  proof.  It  has  been  held  that  an  agent  who  effects 
insurance,  has  policies  signed  in  blank,  which  provide  they 
shall  not  be  valid  until  countersigned  by  him,  and  who  issues 
and  countersigns  such  policies,  is  a  general  agent,  and  has 
power  to  waive  proof  of  loss.^^  *  *  *  jj^  some  of  the 
cases  that  deny  the  authority  of  the  local  agent  to  waive 
proof  of  loss,  it  is  held  that,  where  the  policy  prescribes  that 

"»  76  Wis.  269,  44  N.  W.  1106. 

"Franklin  Fire  Ins.  Co.  v.  Coates,  14  Md.  285;  Imperial  Fire  Ins. 
Co.  V.  Murray,  73  Pa.  St.  13;  Hibernia  Ins.  Co.  v.  O'Connor,  29  Mich. 
241;  Ide  v.  Phoenix  Ins.  Co.,  2  Biss.  333,  Fed.  Cas.  No.  7,001;  Norwich 
&  N,  Y.  Transp.  Co.  v.  Western  Massachusetts  Ins.  Co.,  34  Conn.  561; 
McBride  v.  Republic  Fire  Ins.  Co.,  30  Wis.  562.  See,  also,  O'Leary  v. 
German  Amer.  Ins.  Co.,  100  Iowa,  390,  69  N.  W.  686;  Von  Genetchtia 
V.  Citizens'  Ins.  Co.,  75  Iowa,  544,  39  N.  W.  881;  Ruthven  v.  American 
Fire  Ins.  Co.,  92  Iowa,  316,  60  N.  W.  663;  Edwards  v.  Lycoming 
County  Mut.  Ins.  Co.,  75  Pa.  St.  378. 

"Eastern  R.  Co.  v.  Relief  Fire  Ins.  Co.,  105  Mass.  570;  West 
Branch  Ins.  Co.  v.  Helfenstein,  40  Pa.  St.  289;  Marsden  v.  City  & 
County  Assur.  Co.,  L.  R.  1  C.  P.  232;  Kendall  v.  Holland  Purchase 
Ins.  Co.,  2  Thomp.  &  C.  (N.  Y.)  375;  Bernero  v.  South  British  & 
Nat.  Ins.  Co.,  65  Cal.  386;  Phoenix  Ins.  Co.  v.  Perry,  131  Ind.  572; 
Pennell  v.  Lamar  Ins.  Co.,  73  111.  303;  Lycoming  Fire  Ins.  Co.  v. 
Dunmore,  75  111.  14;  American  Cent.  Ins.  Co.  v.  McLanathan,  11 
Kan.  538;  Phenix  Ins.  Co.  v.  Munger,  49  Kan.  178;  Hartford  Fire 
Ins.  Co.  V.  Xahn,  4  Wyo.  364. 


566  WAIVER    OF    NOTICE    AND    PROOFS    OF    LOSS.  §  190 

proof  of  loss  can  only  be  waived  in  writing  by  indorsement 
on  the  poKcy,  a  parol  waiver  is  insufficient  f^  while  the  con- 
trary doctrine  is  announced  in  Hartford  Fire  Ins.  Co.  v, 
Kahn,^'^  and  by  all  the  text  writers,  and  by  nearly  all  of  the 
other  cases  cited  on  both  sides  of  the  proposition,  and  is  sup- 
ported by  the  almost  universally  recognized  doctrine  that  a 
written  contract  may  be  varied  or  rescinded  by  a  subsequent 
parol  agreement.  In  Barre  v.  Council  Bluffs  Ins.  Co.,^^  and 
in  Hollis  v.  State  Ins.  Co.,^^  the  rule  is  announced  that  neither 
the  local  agent  nor  the  adjuster  has  power,  without  affirmative 
authority  or  ratification  shown,  to  waive  proof  of  loss,  such 
power  being  said  to  be  not  necessaiy  to  the  proper  discharge  of 
the  duties  ordinarily  incident  to  their  respective  functions. 
Sojne  of  the  cases  draw  a  distinction  between  the  power  of 
a  local  agent  of  a  foreign  insurance  company  and  that  of  such 
an  agent  of  a  home  insurance  company.  But  this  distinction 
is  not  persuasive,  much  less  convincing.  The  conflict  among 
these  precedents  cannot  be  harmonized.  The  courts  having 
simply  announced  conclusions,  drawn,  without  any  attempt, 
in  most  instances,  at  analysis  or  logical  deduction,  from  the 
same  premises,  they  must  be  accepted  as  the  opinions  of  the 
several  courts,  and  not  as  establishing  a  scientific  legal  prin- 
ciple. The  undoubted  weight  of  authority  sustains  the  power 
of  the  local  agent  to  waive  the  proof  of  loss.  The  cases  which 
deny  it  generally  concede  that  power  to  the  adjuster,  while 
the  Iowa  cases  referred  to  deny  the  power  to  both  the  local 
agent  and  the  adjuster." 

^'Burlington  Ins.  Co.  v.  Kennerly,  60  Ark.  532;  Smith  v.  Niagara 
Fire  Ins.  Co.,  60  Vt.  682,  1  L.  R.  A.  217. 
"  4  Wyo.  364. 
^76  Iowa,  609. 
"65  Iowa,  454. 


§  190  TVHAT   AGENTS    CAN    WAIVE.  667 

Adjuster. 

An  adjuster  is  an  agent  of  an  insurer,  whose  duties  gen- 
erally consist  in  investigating  losses,  and  negotiating  for  and 
making  settlements  thereof.  Waiver  of  proofs  of  loss  by  an 
agent  sent  by  an  insurer  to  investigate  and  adjust  a  loss,  is 
binding  upon  the  company  in  the  absence  of  notice  to  the  in- 
sured of  any  limitation  upon  the  authority  of  the  agent.  It 
is  presumed  that  an  adjuster  has  the  power  to  waive  either  or 
both  notice  and  proofs.^*^  The  agreement  by  an  adjuster  of  an 
insurer  to  settle  a  loss  waives  the  necessity  of  proofs  ;^^  and  a 
denial  by  an  adjuster  of  any  liability  of  his  company  under 
the  policy  is  a  waiver  of  proofs. ^^  But  notice  and  proof  is 
not  waived  by  any  act  or  declaration  of  an  adjuster,  who 
does  not  claim  to  and  has  no  authority  to  represent  the  insurer 
even  though  the  company  afterwards  adopts  some  of  his 
acts.^^ 

While  an  adjuster  can  waive  the  furnishing  of  proofs  of 
loss  within  the  stipulated  time,  he  cannot  delegate  his  au- 
thority in  that  particular  to  another  agent  in  the  absence  of  a 
showing  that  such  a  practice  was  previously  authorized  or 
afterwards  ratified  by  the  principal ;  and  the  conduct  of  an 
adjusting  agent  after  the  expiration  of  the  time  limited  for 
the  furnishing  of  proofs  of  loss,  cannot  be  relied  on  as  a 

'"  Enos  V.  St.  Paul  F.  &  M.  Ins.  Co.,  4  S.  D.  639,  57  N.  W.  919;  East 
Texas  Fire  Ins.  Co.  v.  Brown,  82  Tex.  631;  Wright  v.  London  Fire 
Ins.  Co.,  12  Mont.  474,  19  L.  R.  A.  211;  Lake  v.  Farmers'  Ins.  Co.. 
110  Iowa,  473.  81  N.  W.  711;  Slater  v.  Capital  Ins.  Co.,  89  Iowa,  628, 
23  L.  R.  A.  181;  Dibbrell  v.  Georgia  Home  Ins.  Co.,  110  N.  C.  193; 
Hartford  Fire  Ins.  Co.  v.  Keating,  86  Md.  130,  38  Atl.  29;  Faust  v, 
American  Fire  Ins.  Co.,  91  Wis.  158.  30  L.  R.  A.  783;  German  Ins. 
Co.  V.  Gray,  43  Kan.  497,  8  L.  R.  A.  70. 

"Smith  V.  Home  Ins.  Co.,  47  Hun  (N.  Y.).  30. 

""Trundle  v.  Providence  Wash.  Ins.  Co.,  54  Mo.  App.  188;  Flaherty 
V.  Continental  Ins.  Co.,  20  App.  Div.  (N.  Y.)  275,  46  N.  Y.  Supp.  934. 

"'  Mitchell  V.  Minnesota  Fire  Ass'n,  48  Minn.  284,  51  N.  W.  608.  - 


568  WAIVER    OF   NOTICE    AND   PEOOFS    OF    LOSS.      §§  191,  192 

■waiver  of  failure  to  furnish  proofs  within  the  prescribed  time, 
unless  the  whole  matter  of  the  adjustment  and  settlement  of  a 
loss  has  been  entrusted  to  the  adjuster.  The  authority  to 
investigate  and  report  on  a  loss  is  different  from  the  authority 
to  make  absolute  disposition  of  a  loss.^^  The  adjuster  of  one 
insurance  company  who  goes  at  the  request  of  an  adjuster  of 
another  company  to  examine  a  loss,  has  no  authority  to  waive 
proofs  of  loss  for  the  latter  company  unless  it  be  shown  that  its 
adjuster  had  the  power  to  delegate  such  authority.*' 

Waiver  of  Delay. 

§  191.  Any  delay  in  the  furnishing  of  notice  of  loss  is  waived 
by  the  insurer  if,  after  the  expiration  of  the  time 
within  which  according  to  the  terms  of  the  pol- 
icy notice  may  be  served, 

(a)  It  receives  and  retains  proofs  without  objection,  or 

(b)  Demands  and  receives  an  original  or  supplemental 

notice. 

§  192.  Any  delay  in  the  furnishing  of  proofs  is  waived  by 
the  insurer  — 

(a)  Receiving  and  retaining  overdue  proofs  without 

objection, 

(b)  Or  treating  the  service  of  overdue  proofs  as  being 

a  sufllcient  compliance  with  requirements  of  the 
policy, 

(c)  Or  by  conduct  which  operates  to  create  an  estoppel. 
An  insurer  cannot  take  advantage  of  any  delay  which  it  has 

itself  caused. 

Waiver  of  Delay  in  Serving  Notice. 

If  an  insurer  after  having  received  notice  of  loss  from  its 
agent  puts  itself  in  communication  with  the  insured,  who  in 
due  time  furnishes  proofs  of  loss  which  are  retained  without 
objection,  it  cannot  thereafter  object  to  the  failure  of  the  in- 
sured to  give  immediate  notice  of  loss  as  required  by  the  pol- 

"Albers  v.  Phoenix  Ins.  Co.,  68  Mo.  App.  543. 

"Ruthven  v.  American  Fire  Ins.  Co.,  92  Iowa,  316,  60  N.  W.  663; 
Atlantic  Ins.  Co.  v.  Carlin,  58  Md.  336. 


§  192  WAIVER   OF   DELAY.  569 

icy.^^  A  forfeiture  caused  by  the  delay  in  giving  notice 
within  the  prescribed  time  is  Avaived  by  the  insurer  sending 
the  insured  blanks  for  proofs  of  loss  and  thereafter  making 
ii  bodily  examination  of  the  insured,  even  though  the  blanks 
are  accompanied  with  the  statement  that  their  furnishing 
shall  not  be  held  a  waiver  of  the  notice.^'^ 

Waiver  of  Delay  in  Serving  Proofs. 

An  insurer  waives  absence  of  notice  and  the  sei*vice  of 
proofs  in  proper  form  within  the  prescribed  time  by  demand- 
ing further  proofs,  and  when  these  are  furnished  by  retaining 
fhem  without  objection  and  thereafter  making  an  offer  of 
settlement  and  denying  all  liability  under  the  policy  without 
•objecting  to  the  failure  to  serve  notice  or  proofs  properly.^* 
Any  delay  in  furnishing  proofs  of  loss  is  waived  by  the  in- 
surer thereafter  sending  its  adjuster  to  examine  into  the  cir- 
cumstances in  connection  with  the  fire  and  to  estimate  the 
<;ost  of  rebuilding  ;^^  and  by  calling  for  and  receiving  ad- 
ditional information  and  proof  respecting  the  injury  and 
death  of  the  insured.'^"  A  demand  for  an  amended  notarial 
certificate  is  a  waiver  of  the  objection  that  the  proofs  to  which 
the  defective  certificate  was  attached  were  not  furnished  in 
time;'^^  and  the  retention  without  objection  of  a  second  no- 

*'  Partridge  v.  Milwaukee  Mechanics'  Ins.  Co.,  13  App.  Div.  519,  43 
N.  Y.  Supp.  632;  Trippe  v.  Provident  Fund  Soc,  140  N.  Y.  23,  22 
L.  R.  A.  432;  Rheims  v.  Standard  Fire  Ins.  Co.,  39  W.  Va.  672. 

"'  Peabody  v.  Fraternal  Ace.  Ass'n,  89  Me.  96,  35  Atl.  1020. 

»« McElroy  v.  John  Hancock  Mut.  Life  Ins.  Co.,  88  Md.  137,  41  Atl. 
112;  Hohn  v.  Inter-State  Casualty  Co.,  115  Mich.  79,  72  N.  W.  1105. 

«» Capital  City  Ins.  Co.  v.  Caldwell,  95  Ala.  77,  10  So.  355;  Loeb  v. 
American  Cent.  Ins.  Co.,  99  Mo.  50. 

'» Standard  L.  &  A.  Ins.  Co.  v.  Davis,  59  Kan.  521,  53  Pac.  856,  27 
Ins.  Law  J.  898;  McElroy  v.  John  Hancock  Mut.  Life  Ins.  Co.,  88 
Md.  137,  41  Atl.  112. 

"Merchants'  Ins.  Co.  v.  Gibbs,  56  N.  J.  Law,  679;  Badger  v.  Glens 
Falls  Ins.  Co.,  49  Wis.  389,  5  N.  W.  845. 


570  WAIVER    OF    NOTICE    AND    PKOOFS    OF    LOSS.  §  192 


tarial  certificate  fiiriiislied  after  objection  made  to  a  former 
one  waives  any  delay  in  the  service. 


72 


Estoppel. 

The  insurer  waives  its  rights  to  object  to  any  delay  in  the 
furnishing  of  proofs  of  death,  Avhich  were  promptly  served 
by  the  assignee  of  the  policy  after  he  learned  of  the  death  of 
the  insured,  by  retaining  premiums  paid  on  the  policy  by 
the  assignee  after  the  death  of  the  insured  but  before  the- 
fact  of  the  death  was  known  to  either  insurer  or  assignee.  A 
new  consideration  is  not  always  necessary  to  support  a  binding^ 
waiver  of  the  stipulations  of  a  life  insurance  policy  respecting: 
the  time  of  serving  proofs  of  death.  A  waiver  may  be  estab- 
lished by  proof  of  acts  or  conduct  of  the  insurer  subsequent  to- 
the  breach  indicating  an  intention  to  waive  such  stipulations, 
though  there  be  no  new  consideration  therefor  and  no  tech- 
nical estoppel. 

In  the  case  of  Prentice  v.  Knickerbocker  Life  Ins.  Co.,  the 
defendant  in  August,  1867,  issued  a  policy  of  life  insurance- 
upon  the  life  of  one  M.  The  conditions  of  the  policy  re- 
quired that  the  defendant  should  be  notified  forthwith  of  the 
death  of  the  insured  and  that  full  proofs  of  the  death  "be 
served  within  twelve  months  after  the  time  of  death  or  all 
claims  under  this  policy  will  be  forfeited."  In  December^ 
1867,  M.  with  the  knowledge  and  assent  of  the  defendant  as- 
signed the  policy  to  the  plaintiff,  who  thereafter  paid  the  pre- 
miums. In  July,  1872,  the  plaintiff,  being  about  .to  go  to 
Europe,  paid  to  the  defendant's  general  agent  in  advance  the 
premiums  for  that  year  which  would  not  be  due  until  August, 
The  question  being  raised  as  to  the  position  of  the  parties  in 
case  the  insured  should  die  before  such  premium  became  due, 
the   general   agent  stated  that  defendant  had   agents,   who 

"Smith  V.  Home  Ins.  Co.,  47  Hun  (N.  Y.),  30. 


§  192  WAIVER    OF   DELAY.  571 

would  know  of  the  death  before  plaintiff  could,  and  if  he 
advanced  the  money,  it  would  bo  returned  if  not  earned  by 
the  insurer.  The  insured  died  in  July,  1873,  but  his  death 
did  not  become  known  to  the  parties  until  July,  1875.  Plain- 
tiff paid  the  premiums  for  1873  and  1874  upon  receiving 
from  defendant  the  usual  notice  that  they  were  due,  and  de- 
fendant executed  and  delivered  its  usual  renewal  receipts  for 
such  premiums.  Immediately  upon  being  advised  of  the  death 
of  the  insured,  the  plaintiff  notified  the  company  of  that  fact 
and  ujwn  application  was  furnished  by  the  defendant  with 
blank  proofs  of  loss,  which  proofs  stating  the  time  of  death 
he  prepared  and  delivered  to  the  defendant  in  July,  1875. 
Defendant  received  and  retained  such  proofs  until  October^ 
1875,  without  objection;  and  then  it  took  the  ground  that  the 
claim  was  forfeited  because  the  proofs  were  not  furnished 
within  the  proper  time,  but  making  no  offer  until  after  the 
commencement  of  this  action  to  return  the  premiums  paid  it 
by  plaintiff  after  the  death  of  the  insured.  The  court  held 
that  the  circumstances  justified  the  finding  of  waiver  of  the 
forfeiture  by  which  defendant  was  precluded  from  insisting 
upon  plaintiff's  failure  to  furnish  proofs  within  the  twelve 
months.''^^ 

Delay  Induced  by  the  Insurer. 

A  delay  caused  by  the  insurer  itself  cannot  prejudice  the  in- 
sured.'^'* An  insurer  will  never  be  permitted  to  complain  of  any 
delay  to  wliich  it  has  contributed,  or  which  has  been  caused  by 
its  negotiations  or  dealings  with  the  insured  looking  towards 
an  adjustment  or  settlement  of  the  loss,  and  from  which  it  i*. 
properly  inferable  that  a  strict  compliance  with  the  require- 

"  77  N.  Y.  483.     See  notes  1-7. 

"Cornell  v.  Le  Roy,  9  Wend.  (N.  Y.)  163,  1  Bennett,  Fire  Ins.  Cas. 
408;  Turner  v.  Fidelity  &  Casualty  Co..  112  Mich.  425,  38  L.  R.  A. 
529;  Kenton  Ins.  Co.  v.  Wigginton,  89  Ky.  330,  7  L.  R.  A.  81. 


572 


WAIVER   OF   NOTICE    AND    PKOOFS   OF    LOSS. 


§19J 


ments  of  a  policy  will  not  be  insisted  npon.'^^  So  wliere  the 
delay  was  caused  by  acts  of  the  insurer  which  justified  the 
insured  in  believing  that  the  loss  would  be  settled  and  ad- 
justed without  furnishing  proofs. '^^  A  letter  from  the  insurer 
to  a  claimant  under  a  policy  of  insurance  asking  that  the 
matter  be  allowed  to  rest  until  the  adjuster  of  the  company 
can  see  the  claimant  or  his  attorney  constitutes  a  waiver  of 
the  clause  limiting  the  time  for  furnishing  proofs.'^'^  Where 
a  policy  provides  that  within  sixty  days  after  a  loss  the  in- 
sured should  furnish  proofs  of  loss,  and,  if  required,  informa- 
tion as  to  other  matters  and  an  official  certificate  of  the  same, 
and  an  insufficient  proof  of  the  loss  was  furnished  and  re- 
tained by  the  insurer  until  within  two  or  three  days  prior  to 
the  expiration  of  the  sixty  days,  when  it  objected  thereto  and 
demanded  that  the  insured  furnish  the  paiticulars  required  by 
the  policy  and  also  the  information  and  certificate  which  the 
insured  is  required  to  furnish  upon  demand,  the  action  of 
the  insurer  in  confusing  its  demands  and  failing  to  warn  the 
insured  that  he  had  less  time  in  which  to  furnish  the  particu- 
lars required  by  the  policy  absolutely  than  to  furnish  those 
not  required  until  demanded,  is  a  waiver  of  the  sixty-day 
limit.'^^ 

Waiver  of  Insufficiency. 

§  193.  The  retention  by  the  insurer,  without  objection,  of 
notice  or  proofs  furnished  in  proper  time,  is  a  waiver  of  any 
objection  to  their  suflQcienoy;  and  the  insistence  of  the  insurer 
upon  specified  objections  to  their  suflBciency  is  a  waiver  of  all 
other  objections  which  might  be  made. 


"  Argall  V.  Old  North  State  Ins.  Co.,  84  N.  C.  355. 
"Kenton  Ins.  Co.  v.  Wigginton,  89  Ky.  330,  7  L.  R.  A.  81;  Phoenix 
Ins.  Co.  V.  Levy,  12  Tex.  Civ.  App.  45,  33  S.  W.  992. 
"  Turner  v.  Fidelity  &  Casualty  Co.,  112  Mich.  425,  38  L.  R.  A.  529. 
"  McCarvel  v.  Phenix  Ins.  Co.,  64  Minn.  193. 


§   104  AVAIVER    OF    INSUFFICIENCY.  573 

§  194.  Objections  to  the  suflaciency  of  notice  or  proofs  must 

(a)  Be  made  promptly. 

(b)  Be  stated  clearly  and  distinctly. 

The  law  governing  the  waiver  of  the  sufficiency  or  insuf- 
ficiency of  notice  or  proofs  is  mainly  based  upon  the  doctrine 
of  estoppel.  There  is  this  difference  between  the  failure  to 
furnish  proofs  or  notice  within  the  prescribed  tihae,  and  the 
failure  to  furnish  them  in  the  prescribed  form,  though  within 
the  prescribed  time,  to-wit:  in  the  latter  case  the  insured 
has  not  absolutely  defaulted,  and  it  may  be  that  the  errors  or 
omissions  can  be  corrected  and  the  necessary  information  ob- 
tained and  furnished  to  the  insurer  within  the  proper  time ; 
while  in  the  former  case,  the  insured  will  have  lost  all  his 
rights  unless  the  insurer  has  prevented  or  waived  compliance. 
The  law  requires  of  the  insurer  entire  good  faith  and  fair 
dealing  in  its  transactions  with  the  insured,  and  hence  the 
insurer  is  bound  to  promptly  advise  the  insured  of  any  defects 
of  a  formal  character  in  the  proofs  or  notice  furnished  in 
season,  to  the  end  that  the  assured  may  have  an  opportunity 
to  correct  them.  If  the  insurer  accepts  those  served  within 
the  time  mentioned  in  the  policy,  without  objection,  it  will  be 
deemed  to  have  waived  the  defects  therein,  and  to  have  re- 
-  ceived  them  in  performance  of  the  conditions  of  the  con- 
tract.'^^ 

An  insured  has  the  right  to  assume,  until  advised  to  the 
contrary,  that  the  proofs  of  loss  served  by  him  were  suf- 
ficient.^^     The  real  motive  inducing  the  insurer  to  act  or  to 
remain  silent  when  proofs  are  furnished,  is  immaterial  on- 
the  question  of  waiver.     The  insurer  must  be  held  to  have  in- 

"  Welsh  V.  London  Assur.  Corp.,  151  Pa.  St.  607;  Armstrong  v. 
Agricultural  Ins.  Co.,  130  N.  Y.  566;  Wicking  v.  Citizens'  Mut.  Fire 
Ins.  Co.,  118  Miph.  640,  77  N.  W.  278;  Gristock  v.  Royal  Ins.  Co.,  84 
Mich.  161,  47  N.  W.  549,  87  Mich.  428,  49  N.  W.  634. 

'"American  Cent.  Ins.  Co.  v.  Sweetser,  116  Ind.  370. 


574 


"WAIVER    OF    NOTICE    AND    PROOFS    OF   LOSS. 


194 


tended  the  natural  and  ordinan^  consequences  of  his  o^vn 
act  and  to  have  anticipated  that  the  insured  would  rely 
thereon.®^ 

The  conditions  of  insurance  policies  requiring  proofs  of 
loss  are  liberally  construed  in  favor  of  the  insured,  and  if  he 
in  good  faith,  and  within  the  stipulated  time,  does  what  he 
plainly  intends  as  a  compliance  with  the  requirements  of  his 
policy  respecting  proofs  of  loss,  good  faith  requires  that  the 
insurer  shall  promptly  notify  him  of  any  objections  thereto 
so  as  to  give  him  an  opportunity  to  obviate  them ;  and  mere 
silence  may  so  mislead  him  to  his  disadvantage  as  to  be  in  it- 
self sufficient  evidence  of  waiver  by  estoppel. ^^  And  the 
same  rule  applies  in  ease  of  failure  of  the  insured  to  attach  to 
his  proofs  the  certificate  of  a  designated  magistrate  or  notary 
public,  where  the  policy  requires  this  to  be  done,  and  to  any 
defects  in  the  certificate  furnished. ^^  The  rules  governing 
waiver  of  proofs  or  of  defects  in  proofs  are  applicable  to 
mutual  benefit  societies  as  well  as  to  ordinary  insurance  com- 
panies.^* 

Waiver  of  SuflB.ciency  —  Cases. 

Defects  in  proofs  of  loss  are  waived  by  the  failure  of  the  in- 
surer to  object  thereto,  although  it  does  not  "admit  any  lia- 
bility f^  where  an  insurer  in  response  to  a  notice  of  loss,  sent 


"  Gray  v.  Blum,  55  N.  J.  Eq.  553,  38  Atl.  646,  and  ante,  note  3. 

''Welsh  V.  London  Assur.  Corp.,  151  Pa.  St.  607;  Bartlett  v.  Union 
Mut.  Fire  Ins.  Co.,  46  Me.  500;  Green  v.  Des  Moines  Fire  Ins.  Co., 
84  Iowa,  135,  50  N.  W.  558;  Gould  v.  Dwelling-House  Ins.  Co.,  134 
Pa.  St.  588;  Harrison  v.  German  American  Fire  Ins.  Co.,  67  Fed.  577. 

'^Turley  v.  North  American  Fire  Ins.  Co.,  25  Wend.  (N.  Y.)  374.  2 
Bennett,  Fire  Ins.  Cas.  50;  Cayon  v.  Dwelling-House  Ins.  Co.,  68 
Wis.  510,  32  N.  W.  540;  Paltrovitch  v.  Phopnix  Ins.  Co.,  143  N.  Y.  73. 
25  L.  R.  A.  198;  Mercantile  Ins.  Co.  v.  Holthaus,  43  Mich.  423. 

»*  Stambler  v.  Order  of  Pente,  159  Pa.  St.  492. 

^National  Ace.  Soc.  v.  Taylor,  42  111.  App.  97;  Welsh  v.  London 
Assur.  Corp.,  151  Pa.  St.  607. 


I  194  WAIVER   OF   INSUFFICIENCY.  575 

to  the  insured  a  blank  apparently  designed  to  be  nsed  in  pre- 
paring proofs  of  loss,  and  the  insured  filled  out  such  blank 
and  returned  it  to  the  insurer,  who  retained  it  \Adthout  ob- 
jecting to  its  sufficiency,  the  latter  will  be  estopped  to  claim 
that  the  proofs  were  not  itemized  in  detail  as  required  by  the 
policy  ;^^  and  the  retaining  of  an  insurance  policy  by  the  in- 
surer without  notifying  the  insured  of  its  teiTas,  estops  the  in- 
surer from  claiming  non-compliance  with  the  provisions  of  the 
policy  regulating  the  fonn  and  contents  of  such  proofs  of 
loss  f  and  an  informal  statement  concerning  the  loss  given  by 
the  insured  to  an  adjusting  agent  of  the  insurer,  who  delivers 
it  to  his  principal,  which  fails  to  demand  further  or  formal 
proofs,  is  sufficient.^*  Imperfect  proofs  of  loss  received  and 
retained  by  the  insurer  without  objection,  will  be  held  suffi- 
cient, even  though  the  conditions  in  the  policy  are  explicit  as 
to  the  form  and  contents  of  proofs,  and  though  the  policy  pro- 
vides that  no  condition  or  clause  in  the  policy  shall  be  altered 
or  waived  except  by  writing  indorsed  on  or  annexed  to  the 
policy  and  signed  l)y  the  president  or  secretary.^^  Eeten- 
tion  by  the  insurer  of  defective  proofs  of  loss  without  objection 
is  a  waiver  of  defects  in  the  description  of  other  insurance 
upon  the  property  ;^^  the  acknowledgment  by  the  insurer  of 
notice  of  the  death  of  an  insured  and  its  refusal  to  furnish 
blanks  for  the  making  of  proper  proofs  upon  the  ground  that 
the  policy  is  forfeited,  waives  the  making  of  any  further 

"Bromberg  v.  Minnesota  Fire  Ass'n,  45  Minn.  318. 

"American  Cent.  Ins.  Co.  v.  Simpson,  43  111.  App.  98;  Bennett  v. 
Maryland  Fire  Ins.  Co.,  14  Blatchf.  422,  Fed.  Cas.  No.  1,321. 

*'  Brock  V.  Des  Moines  Ins.  Co.,  106  Iowa,  30,  75  N.  W.  863. 

*»  Blake  v.  Exchange  Mut.  Ins.  Co.,  12  Gray  (Mass.),  265,  4  Ben- 
nett, Fire  Ins.  Cas.  306;  Gerard  F.  &  M.  Ins.  Co.  v.  Frymier  (Tex. 
Civ.  App.),  32  S.  W.  55;  Karelsen  v.  Sun  Fire  Office,  45  Hun  (N.  Y.), 
144. 

•"Jones  V.  Howard  Ins.  Co.,  117  N.  Y.  103. 


576  WAIVER    OF    NOTICE    AND    PEOOFS    OF    LOSS.  §  19-^ 

proofs.^  ^  Defects  in  proofs  of  loss  fiiniished  by  the  insured 
are  waived  bj  the  insurer  without  objection  acting  thereon 
and  investigating  the  loss;^^  and  by  the  insurer  negotiating 
thereafter  with  the  insured  concerning  an  adjustment  and 
demanding  a  submission  to  arbitration  free  from  any  of  the 
conditions  of  the  policy  ;°^  and  by  the  agent  of  the  insurer 
thereafter  examining  the  insured  and  procuring  bills  and  in- 
voices of  the  goods  destroyed.^* 

Denial  of  Liability. 

Acts  or  conduct  of  the  insurer  which  will  operate  as  a 
waiver  of  all  notice  or  proofs  will  also  operate  as  a  waiver  of 
defects  in  those  furnished.  For  example,  the  refusal  by  an 
insurance  company  within  the  time  for  furnishing  proofs  to 
pay  the  full  amount  stated  in  the  policy  upon  the  sole  ground 
that  the  insured  was  injured  in  an  occupation  more  hazardous 
than  that  in  which  he  w^as  insured,  is  a  waiver  of  the  right  to 
object  to  the  sufficiency  of  the  proofs  served.®^ 

Objections  Must  be  Made  Promptly. 

Defects  in  form  or  particulars  of  proofs  of  loss  furnished 
by  the  insured  are  waived  unless  seasonably  objected  to.^^ 

"  Evarts  v.  United  States  Mut.  Ace.  Ass'n,  16  N.  Y.  Supp,  27. 

"=  Biddef ord  Sav.  Bank  v.-Dwelling-House  Ins.  Co.,  81  Me.  566; 
German  Ins.  Co.  v.  Gray,  43  Kan.  497,  8  L.  R.  A.  70. 

'3  Connecticut  Fire  Ins.  Co.  v.  Hamilton  (C.  C.  A.),  59  Fed.  258; 
Hamilton  v.  Phoenix  Ins.  Co.  (C.  C.  A.),  61  Fed.  379. 

=■' xMerclaants'  Ins.  Co.  v.  Reichman"  (Tex.  Civ.  App.),  40  S.  W.  831; 
Roberts  v.  Northwestern  Nat.  Ins.  Co.,  90  Wis.  210,  62  N.  W.  1048. 

''  Standard  L.  &  A.  Ins.  Co.  v.  Koen,  11  Tex.  Civ.  App.  273,  33  S.  W. 
133;  Lampkin  v.  Travelers'  Ins.  Co.,  11  Colo.  App.  249,  52  Pac.  1040; 
Commercial  Union  Assur.  Co.  v.  State,  113  Ind.  331;  Phoenix  Ins.  Co. 
v.  Taylor,  5  Minn.  492  (Gil.  393);  National  Masonic  Ace.  Ass'n  v. 
Day,  55  Neb.'  127,  75  N.  W.  576;  Heidenreich  v.  Aetna  Ins.  Co.,  2S 
Or.  70. 

°*  Hamilton  v.  Connecticut  Fire  Ins.  Co.,  46  Fed.  42. 


I  194:  WAIVER    OF   INSUFFICIENCY.  577 

Thus,  a  retention  of  proofs  for  fifty  days  without  objection, 
and  then  returning  them  as  insufficient,  Avithout  assigning  any 
specific  objection,  has  been  held  sufficient  upon  which  to  base 
a  finding  of  waiver  of  any  defects.^'^  The  provision  of  a 
policy  that  the  loss  is  to  be  payable  sixty  days  after  notice 
and  proof  thereof  has  been  received  by  the  insurer  does  not 
give  the  company  sixty  days  in  which  to  object  to  proofs  of 
loss.  Objection  must  be  made  within  a  reasonable  time.  The 
question  of  what  is  a  reasonable  time  is  a  question  of  law  for 
the  court  in  two  classes  of  cases,  to-wit:  (1)  "Transactions 
which  happen  in  the  same  way,  day  after  day,  and  present  the 
question  of  reasonable  time  on  the  same  data  in  continually 
recurring  instances,  so  that  by  a  series  of  decisions  of  the 
(2)  "Where  the  time  taken  is  so  clearly  reasonable  or  un- 
reasonable that  there  can  be  no  room  for  doubt  as  to  the  proper 
answer  to  the  question.  Where,  however,  the  answer  to  the 
question  is  one  dependent  on  many  different  circumstances 
which  do  not  constantly  recur  in  other  cases  of  like  character, 
and  with  respect  to  which  no  certain  rule  of  law  has  heretofore 
been  laid  down,  or  could  be  laid  down,  the  question  is  one  of 
fact  for  the  jury."^^ 

A  delay  by  the  insurer  of  thirty-seven  days  in  demanding  a 
certificate  of  the  magistrate  nearest  the  fire,  is  not  necessarily 
a  waiver  of  such  certificate;^^  and  a  retention  of  a  notarial 
certificate  accompanying  proofs  of  loss  for  twenty-three  days 
without  objection  is  a  waiver  of  the  objection  that  the  notary 
certifying  was  not  the  nearest  notaiy  and  is  a  Avaiver  of  the 
right  to  demand  another  or  further  certificate;^""  and  a  delay 

"'  Davis  Shoe  Co.  v.  Kittanning  Ins.  Co.,  138  Pa.  St.  73. 
'» Hamilton  v.  Phoenix  Ins.  Co.  (C.  C.  A.),  61  Fed.  379;  Dwelling- 
House  Ins.  Co.  v.  Dowdall,  159  111.  179. 
'^  Williams  v.  Queen's  Ins.  Co.,  39  Fed.  167. 
"'"  Paltrovitch  v.  Phoenix  Ins.  Co.,  143  N.  Y.  73,  25  L.  R.  A.  198. 

KERR,  INS.— 37 


578  WAIVER   OF    NOTICE   AND    PEOOFS    OF    LOSS.  §  194 

of  five  weeks  lias  been  held  good  ground  upon  which  to  base  a 
finding  of  a  waiver ;^°^  and  retaining  them  without  objection 
until  the  trial  of  an  action  upon  the  policy  ;^^^  and  for  eighty- 
six  days;^*'^  and  for  forty-eight  days;^°^  and  for  thi-ee 
months.  ■^'^^ 

Where  an  insurer  retains  proofs  of  loss  for  ten  days  without 
objection,  and  afterwards  gives  them  to  its  agent  with  instruc- 
tions to  investigate  and  adjust  the  loss,  it  waives  any  objections 
to  the  sufficiency  of  the  proofs  served,  and  it  is  immaterial  if 
'  the  agent  afterwards  returns  such  proofs  to  the  insured  with 
the  objection  that  they  are  insufficient  in  form  and  were  not 
served  in  time,  if  amended  proofs  are  afterwards  and  within  a 
reasonable  time  tendered  by  the  insured.  ^"^^  The  fact  that  when 
the  proofs  were  received  there  remained  but  three  days  of 
the  period  specified  in  the  policy,  which  time  might  not  prove 
sufficient  to  enable  the  insured  to  obviate  the  defects,  will  not 
relieve  the  insurer  from  the  obligation  to  promptly  object  to 
any  defects  and  to  give  him  any  opportunity.^"'^  The  making 
of  specific  objections  to  proofs  of  loss  served  by  the  insured 
does  not  waive  the  furnishing  of  proofs. ^"^  The  retention  by 
the  insurer  of  proofs  furnished  in  compliance  with  one  con- 
dition of  the  policy  is  not  a  waiver  of  the  condition  of  the 
policy  requiring  the  furnishing  of  a  certificate  of  the  magis- 
trate or  notary  living  nearest  the  fire.^"^ 

"^  Keeney  v.  Home  Ins.  Co.,  71  N.  Y.  396.  See,  also,  Jefferson  v. 
German-American  Mut.  Life  Ass'n,  69  Mo.  App.  126;  McCarvel  v. 
Phenix  Ins.  Co.,  64  Minn.  193. 

^°=  Vangindertaelen  v.  Phenix  Ins.  Co.,  82  Wis.  112,  51  N.  W.  1122; 
Grand  Lodge  v.  Besterfield,  37  111.  App.  522. 

"^  Weiss  V.  American  Fire  Ins.  Co.,  148  Pa.  St.  349,  23  Atl.  991. 

"^  Capitol  Ins.  Co.  v.  Wallace,  48  Kan.  400,  29  Pac.  755. 

"'Lockwood  V.  Middlesex  Mut.  Assur.  Co.,  47  Conn.  553. 

"'  Haggard  v.  German  Ins.  Co.,  53  Mo.  App.  98. 

"^  Gould  V.  Dwelling-House  Ins.  Co.,  134  Pa.  St.  570. 

^»*  Sheehan  v.  Southern  Ins.  Co.,  53  Mo.  App.  351. 

*~  Lane  v.  St.  Paul  F.  &  M.  Ins.  Co.,  50  Minn.  227. 


§  194  WAIVER   OF   INSUFFICIENCY.  579 

Objections  Must  be  Clear  and  Specific. 

If  the  insurer  deems  the  proofs  funiished  insufficient,  and 
desires  further  or  amended  proofs,  it  should  point  out  in  its 
objections,  the  defects  which  it  desires  to  have  overcome  and 
the  omissions  w^hich  ought  to  be  suj)plied.  An  objection  made 
bj  an  insurer  that  the  proofs  furnished  were  deficient  both  in 
form  and  substance,  without  pointing  out  the  specific  defects 
relied  on,  is  too  general  to  impose  upon  the  insured  the  duty 
of  furnishing  other  proofs. ^^°  So  is  the  general  objection 
that  they  are  not  in  conformity  with  the  policy,  without  speci- 
fying particular  defects. ^^^  But  an  objection  to  the  sufficiency 
of  the  proofs,  together  with  a  reference  to  the  specific  condi- 
tions of  the  policy  which  set  forth  what  the  proofs  must  con- 
tain, is  sufficient.^^^  The  making  of  a  specific  objection  to 
proofs  of  loss  is  an  effectual  waiver  of  all  other  objections 
which  might  have  been  made.  Thus  where  the  only  objection 
made  by  the  insurer  upon  receipt  of  proofs  was  that  they  did 
not  include  a  certain  certificate  which  the  insured  had  the 
right  to  furnish  later,  the  objection  that  they  were  not  fur- 
nished in  time  was  waived.  ^^^     And  an  objection  to  proofs 

"» Myers  v.  Council  Bluffs  Ins.  Co.,  72  Iowa,  176,  33  N.  W.  453. 

"1  Virginia  F.  &  M.  Ins.  Co.  v.  Goode,  95  Va.  762;  Pratt  v.  New 
York  Cent.  Ins.  Co.,  55  N.  Y.  505;  Gould  v.  Dwelling-House  Ins.  Co., 
134  Pa.  St.  570;  Smith  v.  Home  Ins.  Co.,  47  Hun  (N.  Y.),  30; 
Schmurr  v.  State  Ins,  Co.,  30  Or.  29,  46  Pac.  363;  Gnau  v.  Masons' 
Fraternal  Ace.  Ass'n,  109  Mich.  527,  67  N.  W.  546. 

Notice  to  the  insured  to  comply  strictly  with  the  terms  of  the 
policy  is  not  notice  to  furnish  a  certificate  of  a  magistrate  or  notary 
public  which  need  be  furnished  only  if  required.  Morgan  v.  Sun  Ins. 
Office,  176  Pa.  St.  579. 

^"Gauche  v.  London  &  L.  Ins.  Co.,  4  Woods  (U.  S.),  102,  10  Fed. 
347. 

"« Badger  v.  Glens  Falls  Ins.  Co.,  49  Wis.  389,  5  N.  W.  845;  West- 
err.  Home  Ins.  Co.  v.  Richardson,  40  Neb.  1,  58  N.  W.  597;  Moore  v. 
Hanover  Fire  Ins.  Co.,  71  Hun  (N.  Y.),  199. 


580 


WAIVER    OF   NOTICE   AND    PROOFS    OF    LOSS. 


§19^ 


solely  upon  the  ground  that  the  amount  claimed  therein  is  in 
excess  of  an  award  made  under  the  provisions  of  the  policy, 
is  a  waiver  of  any  other  defects  in  the  proofs. ^^^ 

Amended  or  Additional  Proofs. 

§  195.  If  the  original  proofs  are  furnished  after  the  expira- 
tion of  the  time  fixed  by  the  policy,  and  the  insurer  objects  to 
their  suflaciency  and  requires  further  proofs,  these  latter  may 
be  furnished  within  a  reasonable  time  thereafter.  This  being 
done,  the  insurer  will  be  estopped  to  assert  the  primary  delay. 
But  if  the  original  proofs  furnished  within  the  prescribed  time 
are  fatally  defective,  and  the  insurer  promptly  objects  to  their 
suflBciency  and  points  out  the  particulars  in  which  they  are 
insufficient,  the  insured  must  then  serve  corrected  or  supple- 
mental proofs  overcoming  all  valid  objections  made,  and  he 
must  do  this  within  the  time  fixed  by  the  policy  for  the  fur- 
nishing of  proofs. 

The  contract  of  insurance  embodies  the  full  measure  of  the 
rights  and  obligations  of  both  the  insurer  and  insured,  and,, 
except  in  particulars  wherein  non-compliance  is  waived  or  ex- 
cused by  law,  each  is  entitled  to  insist  upon  full  performance- 
by  the  other.  N*either  party  can  by  his  own  act  diminish  his 
own  liability  or  deprive  the  other  of  any  contractual  right. 
Unless  the  insurer  has  expressly  or  impliedly  waived  its  right 
to  insist  upon  the  full  and  complete  performance  by  the  in- 
sured of  the  conditions  regulating  the  contents  of  proofs  and 
the  time  of  their  service,  the  latter  must  render  full  com- 
pliance therewith.  The  insured  may  by  delay  in  furnishing 
his  proofs  lose  all  his  rights  under  the  policy,  but  this  delay 
is  waived  by  the  insurer  when  it  objects  to  the  sufficiency  of 
overlate  proofs,  and  requires  the  insured  to  supply  further  or 
additional  proofs.  Or  if  the  insured  in  good  faith  and  in 
attempted  compliance  with  the  requirements  of  the  policy 


"*Levine  v.  Lancashire  Ins.  Co.,  66  Minn.  138;  First  Nat.  Bank  v. 
American  Cent.  Ins.  Co.,  58  Minn.  492. 


§  195  AMENDED    OR    ADDITIONAL    PROOFS.  581 

seasonably  furnishes  proofs  wliicli  are  insTiffieicnt  and  incom- 
plete, the  insurer  will  be  held  to  have  waived  all  defects  to 
which  it  does  not  promptly  and  properly  object.  This  much 
the  law  requires  the  insurer  to  do  as  an  evidence  of  its  good 
faith  and  fair  dealing.  But  nothing  more  is  required  of  the 
insurer  in  this  regard ;  and,  this  duty  discharged  by  it,  the  in- 
sured must  then  do  what  the  policy  requires  him  to  do,  and 
within  the  prescribed  time.  Nor  is  the  insured  excused  from 
discharging  this  duty  by  reason  of  the  impossibility  of  furthei- 
performance  within  the  stipulated  time.  He  is  conclusively 
presumed  to  know  the  conditions  of  his  policy  and  Avhat,  if 
anything,  is  unconditionally  required  to  be  furnished  with 
and  stated  in  the  -proofs,  and  what  the  insurer  could  insist 
upon  his  doing,  and  within  what  time  he  must  do  it.  He 
cannot  extend  the  time  for  furnishing  proper  proofs  by  delay 
in  the  furnishing  of  defective  proofs.  Proiapt  action  on  his 
part  and  an  honest  attempt  at  compliance  by  him  would  have 
shifted  the  responsibility  of  taking  the  next  step  upon  the 
insurer.  The  fact  that  when  the  defective  proofs  were  re- 
ceived there  might  not  remain  time  to  obviate  and  remedy 
the  defects,  would  not  relieve  the  insurer  from  its  obligation 
to  give  him  the  opportunity  so  to  do.  Valid  objections, 
promptly  and  properly  made  by  the  insurer,  to  defective  proofs 
furnished  in  proper  time,  can  only  be  overcome  by  new  or  ad- 
defects  complaii.^d  of,  and  these  latter  must  be  furnished 
within  the  time  limited  in  the  policy. -^^^ 
ditional  proofs  which  supply  the  omissions  and  remedy  the 
The  insurer  must  make  its  objections  to  the  defective  proofs 
clearly  and  explicitly  and  in  a  manner  not  calculated  to  con- 
fuse or  mislead  the  insured.  Thus  by  mixing  up  indiscrim- 
inately in  an  objection  to  proofs  furnished  and  a  demand  for 

•"Gould  V.  Dwelling-House  Ins.  Co.,  134  Pa.  St.  570;   McCarvel  v. 
Phenix  Ins.  Co.,  64  Minn.  198;  ante,  Waiver  of  Delay  and  Defects. 


582  WAIVER   OF   NOTICE    AND   PROOFS   OF   LOSS.  §  190 

fiirtlier  proofs,  matters  and  information  wliicli  the  insured 
was  unconditionally  required  to  furnish  and  those  which  he 
was  not  required  to  furnish  unless  they  were  demanded,  and 
bv  f ailino"  to  warn  the  insured  that  he  had  less  time  to  furnish 
the  former  than  the  latter,  or  that  a  failure  to  furnish  the 
former  within  a  certain  time  would  cause  a  forfeiture,  the 
insurer  waives  the  limitation  contained  in  the  policy  and 
gives  to  the  insured  a  reasonable  time  in  which  to  comply  with 
all  the  demands.  ^-^^ 

Proofs  Not  Furnished  by  Proper  Person". 

§  196.  The  right  of  an  insurer  to  insist  upon  proofs  being 
furnished  by  a  particular  person  may  be  waived  by  its  retain- 
ing proofs  furnished  by  some  one  else  without  questioning 
the  right  of  the  latter  to  furnish  them. 

If  a  person  other  than  the  one  designated  in  the  policy  in 
good  faith  and  with  reasonable  right  or  claim  of  right  to  act 
in  the  premises,  attempts  to  comply  with  the  provisions  requir- 
ing the  furnishing  of  proofs  of  loss,  and  pursuant  thereto  ac- 
tually furnishes  proofs  to  the  insurer  within  proper  time,  the 
latter  by  retaining  without  objection  proofs  so  furnished  by 
one  not  entitled  to  furnish  them,  will  be  held  to  have  waived 
all  defects  in  the  proofs  and  any  rights  it  may  have  gained  by 
reason  of  the  failure  of  the  proper  party  to  furnish  them.^^^ 
The  refusal  of  the  insurer  to  receive  proofs  offered  and  seiwed 
by  one  not  entitled  to  furnish  them,  does  not  operate  as  a 
waiver  of  any  other  defenses  to  an  action  on  the  policy,  e.  g. 
the  defense  that  the  policy  had  been  avoided  by  the  com- 

"« McCarvel  v.  Phenix  Ins.  Co.,  64  Minn.  198. 

"'Morotock  Ins.  Co.  v.  Cheek,  93  Va,  8,  24  S.  E.  464;  Weed  v. 
Hamburg-Bremen  Fire  Ins.  Co.,  133  N.  Y.  394;  Armstrong  v.  Agri- 
cultural Ins.  Co.,  130  N.  Y.  566;  State  Ins.  Co.  v.  Maackens,  38  N.  J. 
Law,  564;  Wilson  v.  Northwestern  Mut.  Ace.  Ass'n,  53  Minn.  470; 
Brock  V.  Des  Moines  Ins.  Co.,  106  Iowa,  30,  75  N.  W.  683.  See  ante, 
"Who  Can  Furnish  Proofs." 


§§  197,  198  SILENCE    OF   INSUKER.  o83 

mencement  of  mortgage  foreclosure  proceedings  against  the 
property  insured  without  the  written  consent  of  the  in- 
surer.^^^  Where  a  policy  made  payable  to  another  than  the 
insured  as  collateral  seeurity,  provides  that  in  case  of  loss 
proofs  shall  he  made  by  the  original  assured,  who  after  a  loss 
refuses  to  make  proofs,  whereupon  the  mortgagee  furnishes 
proofs  to  the  insurer,  who  retains  them  with  the  objection,  that 
they  are  not  in  accordance  with  the  conditions  of  the  policy, 
the  mortgagee  is  not  bound  to  furnish  additional  proofs.^^^ 

Silence  of  Insurer. 

§  197.  An  insurer  is  under  no  obligation  to  do  or  say  any- 
thing to  make  a  forfeiture  effectual. 

'§  198.  Silence  operates  as  an  assent  and  creates  an  estoppel 
only  where  it  violates  a  duty  to  speak  and  at  the  same  time 
has  the  effect  to  mislead  and  prejudice  the  one  to  whom  this 
duty  was  owed. 

The  insurer  is  under  no  obligation  to  furnish  blank  proofs 
of  loss  or  to  demand  proofs.  The  conditions  requiring  service 
of  proofs  of  loss  are  found  in  the  policy,  and  the  insured  is  con- 
clusively presumed  to  know  what  obligations  in  this  respect 
the  policy  imposes  upon  him.  When  a  loss  occurs  the  in- 
sured is  bound  to  know  what  he  must  do;  and  the  insurer  is 
under  no  obligation  to  notify  him  that  proofs  must  be  given  or 
that  he  has  omitted  to  give  proofs  within  the  proper  time. 
The  performance  of  the  conditions  is  not  a  thing  to  be  done 
at  the  request  of  the  insurer.  The  company  may  remain 
silent,  and  until  proofs  are  furnished  it  cannot  be  called  upon 
to  pay  the  loss.     In  discussing  the  question  of  the  waiver 

"» Armstrong  v.  Agricultural  Ins.  Co.,  ISO  N.  Y.  566. 

""Pratt  V.  New  York  Cent.  Ins.  Co.,  55  N.  Y.  505;  Findeisen  v. 
Metropole  Fire  Ins.  Co.,  57  Vt.  520;  Rumsey  v.  Plicenix  Ins.  Co.,  17 
Blatchf.  (U.  S.)  527,  1  Fed.  396;  Eliot  Five  Cents  Sav.  Bank  v.  Com- 
mercial Union  Assur.  Co.,  142  Mass.  142;  Keeney  v.  Home  Ins.  Co^ 
71  N.  Y.  396. 


584  WAIVER   OF    NOTICE    AND    PROOFS    OF    LOSS.  §  198 

of  the  insufficiencj  of  proofs,  we  have  seen  that  the  law  re- 
quires of  the  insurer  entire  good  faith  and  fair  dealing  in  its 
transactions  with  the  insured  in  reference  to  notice  and  proofs, 
and  that  it  is  the  duty  of  the  insurer  to  call  the  attention  of 
the  insured  to  any  defects  in  notice  or  proofs  served  in  proper 
time,  so  as  to  give  the  insured  an  opportunity  to  correct  any 
formal  defects.  The  reasons  for  that  rule  are  good  and 
founded  on  principles  of  justice ;  but  where  the  insured  has 
neglected  to  furnish  notice  or  proofs  within  the  time  fixed  by 
the  policy  and  in  consequence  thereof  his  right  to  recovery  is 
gone,  the  reasons  for  the  rule  do  not  exist.  Cessante  ratione 
legis  cessat  ipsa  lex. 

If  notice  or  proofs  are  not  served  within  the  prescribed  time, 
and  the  insurer  has  done  nothing  to  influence  the  omission,  so 
the  insured  has  lost  all  his  rights  under  the  policy,  the  insurer 
is  not  bound  to  object  to  the  sufficiency  of  notice  or  proofs 
served  thereafter,  nor  to  point  out  any  defects  therein.  Its 
silence  then  does  not  constitute  a  waiver ;  and  does  not  estop  it 
from  insisting,  in  the  defense  of  an  action  upon  the  policy, 
upon  all  the  defenses  it  may  have.  An  insurer  is  not  re- 
quired to  do  or  say  anything  to  make  a  forfeiture  effectual. 
Silence  operates  as  an  assent  and  creates  an  estoppel  only 
where  it  violates  the  duty  to  speak  and  at  the  same  time  has 
the  effect  to  mislead  and  prejudice  the  party  who  was  entitled 
to  have  that  duty  discharged. ^^° 

'="  Brown  v.  London  Assur.  Corp.,  40  Hun  (N.  Y.),  107;  Brink  v. 
Hanover  Fire  Ins.  Co.,  80  N.  Y.  108,  70  N.  Y.  593;  Bennett  v.  Lycom- 
ing County  Mut.  Ins.  Co.,  67  N.  Y.  274;  Armstrong  v.  Agricultural 
Ins.  Co.,  130  N.  Y.  566;  Johnson  v.  American  Ins.  Co.,  41  Minn.  399; 
Daniels  v.  Equitable  Fire  Ins.  Co.,  50  Conn.  551;  Continental  Ins. 
Co.  V.  Dorman,  125  Ind.  189.  See  ante,  Waiver  of  Sufficiency  of 
Proofs. 

If  no  word  or  act  has  been  said  or  done  by  insurer  to  mislead  in- 
sured or  throw  him  off  his  guard,  mere  silence  is  not  enough  to  sus- 


■§§  199,  200  DENIAL   OF    LIABILITY.  585 

A  failure  to  give  notice  of  loss  wbicli  defeats  the  right  of 
action  for  the  insurance,  is  not  waived  by  the  retention  of 
proofs  of  loss  sent  after  the  policy  is  dead,  where  the  insurer 
gives  notice  of  a  denial  of  any  liability  under  the  policy. ^-^ 
If  the  policy  requires  notice  to  be  given  within  a  reasonable 
time,  or  immediately,  upon  penalty  of  forfeiture,  and  if 
notice  is  unreasonably  delayed  without  sufficient  excuse,  a  fail- 
ure by  the  insurer  to  object  to  a  notice  given  after  the  rights 
of  the  insured  have  expired  does  not  revive  the  rights  of  the 
insured. -^^^  An  insurer  does  not  confess  the  full  amount  of 
loss  as  set  forth  in  the  proofs  by  failure  to  object  to  the  proofs 
upon  the  ground  of  the  amount  of  the  loss  set  forth  therein.  ^^^' 

Denial  of  Liability. 

§  199.  The  extent  to  which  a  denial  of  liability  by  an  insurer 
•operates  as  a  waiver  of  notice  or  proofs  of  loss,  or  both,  depends 
upon  the  time  and  manner  of  the  denial  and  the  circumstances 
under  which  it  is  made.  A  waiver  by  denial  of  liability  is  not 
always  irrevocable. 

§  200.  A  denial  by  an  insurer  of  all  liability  under  a  policy, 
made  within  the  time  during  which  proofs  might  be  furnished, 
and  under  such  circumstances  as  to  warrant  the  presumption 
that  proofs  will  be  useless,  is  a  waiver  of  any  proofs,  and  a 
'waiver  of  defects  in  those  already  furnished. 

The  reason  of  this  rule  is  that  the  law  does  not  require  any 
man  to  do  a  useless  act,  and  that  the  insurer,  by  denying  liabil- 

tain  the  inference  of  waiver.  Mueller  v.  South  Side  Fire  Ins.  Co.,  87 
Pa.  St.  399;  Rademacher  v.  Greenwich  Ins.  Co.,  75  Hun  (N.  Y.),  83. 

1-1  Ermentrout  v.  Girard  F.  &  M.  Ins.  Co.,  63  Minn.  305,  30  L.  R.  A. 
346;  Edwards  v.  Baltimore  Fire  Ins.  Co.,  3  Gill  (Md.),  176,  2  Ben- 
nett, Fire  Ins.  Cas.  405. 

"-Trask  v.  State  F.  &  M.  Ins.  Co.,  29  Pa.  St.  198;  Insurance  Co.  of 
North  America  v.  Brim,  111  Ind.  281;  Donahue  v.  Windsor  County 
Mut.  Fire  Ins.  Co.,  56  Vt.  374;  Ayres  v.  Hartford  Fire  Ins.  Co.,  17 
Iowa,  179. 

"'  Kuznik  v.  Orient  Ins.  Co.,  73  111.  App.  201.  See  post,  §§  199,  200, 
"Denial  of  Liability." 


586  WAIVER   OF   NOTICE   AND   PKOOFS   OF   LOSS.  §  200 

ity  while  yet  the  insured  has  time  to  comply  with  the  re' 
qiiirement  of  the  policy,  says  in  effect  to  the  insured  that  it 
is  fully  acquainted  with  all  the  circumstances  concoming  the 
loss  and  has  made  up  its  mind  that  under  no  circumstances 
can  the  insured  recover,  and  that  the  furnishing  of  proofs  of 
loss  will  not  avail  him  anything ;  hence  the  insured  is  justified 
in  believing  and  acting  upon  the  belief  that  further  attempt 
to  comply  with  the  requirement  of  the  policy  concerning 
proofs  is  not  desired  by  the  insurer  and  would  be  unavailing. 
The  provisions  of  a  policy  of  insurance  requiring  proofs  of 
loss  to  be  furnished  within  a  specified  time  as  a  condition  pre- 
cedent to  the  right  of  the  insured  to  maintain  an  action  on  the 
policy,  is  waived  by  the  refusal  of  the  insurer  to  pay  the  loss 
and  its  denial  of  any  liability  to  the  insured  made  before  the 
expiration  of  the  time  for  furnishing  proofs  of  loss.-'^*  An 
unqualified  refusal  by  an  insurer  to  pay  a  loss  based  upon  acts 
within  its  own  knowledge  and  made  under  such  circumstances 
as  to  justify  the  insured  in  believing  that  service  of  proofs 
w^ould  be  useless,  is  equivalent  to  an  express  agreement  of 
waiver,  even  though  the  obligation  to  make  such  proofs  is  im- 
posed by  statute  as  well  as  by  contract.  And  the  fact  that  the- 
insured  sends  the  proofs  after  such  a  waiver  is  not  ma- 
terial. ^^^ 

"♦German  Ins.  Co,  v.  Frederick  (C,  C.  A.),  58  Fed.  144. 

"=  Wilson  V.  Commercial  Union  Assur.  Co.,  51  S.  C.  540,  29  S.  ET, 
245;  Boyd  v.  Cedar  Rapids  Ins.  Co.,  70  Iowa,  325,  30  N,  W.  585; 
Marthinson  v.  North  British  &  M.  Ins.  Co.,  64  Mich.  372,  31  N.  W, 
291;  Hicks  v.  British  America  Assur.  Co.,  13  App.  Div.  444,  43  N.  Y. 
Supp.  623;  Harris  v.  Phoenix  Ins.  Co.,  85  Iowa,  238,  52  N.  W.  128,' 
Roberts  v.  Northwestern  Nat.  Ins.  Co.,  90  Wis.  210,  62  N.  W.  1048,' 
Gerling  v.  Agricultural  Ins.  Co.,  39  W.  Va.  689;  Home  Ins.  Co.  v.. 
Boyd,  19  Ind.  App.  173,  49  N.  E.  285;  Milwaukee  Mechanics'  Ins.  Co. 
V.  Winfield,  6  Kan.  App.  527,  51  Pac.  567;  Searle  v.  Dwelling  House- 
Ins.  Co.,  152  Mass.  263;  Farnum  v.  Phoenix  Ins.  Co.,  83  Cal.  246;  Ger- 
man Fire  Ins.  Co.  v.  Gueck,  130  111.  345,  6  L.  R.  A.  835;  Hermann  v.  Ni- 
agara Fire  Ins.  Co.,  100  N.  Y.  411. 


§  200  DENIAL    OF   LIABILITY.  587 

An  accident  insurance  company,  wliicli,  before  tlie  expira- 
tion of  the  time  for  furnishing  proofs,  refuses  absolutely  to 
pay  any  amount  and  denies  all  liability  upon  the  ground  that 
proper  notice  of  disability  was  not  given,  cannot  thereafter 
deny  the  right  of  the  insured  to  recover  for  the  full  period  of 
disability  on  the  ground  that  in  the  proofs  furnished  a  shorter 
period  of  disability  was  stated.^^*^  An  insurer,  who  upon  be- 
ing notified  of  a  loss,  offers  to  pay  a  specified  sum  in  full 
settlement  therefor,  and  denies  all  liability  for  some  of  the 
articles  upon  the  claim  that  they  -were  not  covered  by  the 
policy,  waives  the  necessity  of  proofs  of  loss  and  authorizes 
the  insured  to  sue  at  once.^^^ 

Denial  of  Liability  Because  of  Garnishment  Pending. 

A  refusal  by  an  insurer  to  settle  with  the  insured  or  to  fix 
the  amount  of  liability,  if  any,  during  the  pendency  of  garnish- 
ment proceedings  will  waive  the  furnishing  of  proofs  only 
until  such  proceedings  are  terminated.  ^^^ 

What  Denial  is  a  Waiver. 

A  refusal  to  pay  a  loss,  or  a  denial  of  all  liability,  does  not 
constitute  a  waiver  of  proofs,  unless  it  is  of  such  kind  and 
made  under  such  circumstances  as  to  justify  the  inference 
that  proofs  would  be  imavailing.^^^  If  the  general  agent  of 
the  insurer  after  investigating  the  circumstances  of  the  fire. 

If  the  company  has,  prior  to  the  death  of  the  insured,  declared  the 
policy  forfeited  for  the  nonpayment  of  premium,  his  representatives 
are  not  required  to  show  that  proofs  have  been  furnished.  Girard 
Life  Ins.,  A.  &  T.  Co.  v.  Mutual  Life  Ins.  Co.,  97  Pa.  St.  15. 

^^'Hohn  V.  Inter-State  Casualty  Co.,  115  Mich.  79,  72  N.  W.  1105. 

•"  Commercial  Fire  Ins.  Co.  v.  Allen,  80  Ala.  571.  But  see  Milwau- 
kee Mechanics'  Ins.  Co.  v,  Winfield,  6  Kan.  App.  527,  51  Pac.  567. 

-'•-'  Merchants'  &  Mechanics'  Ins.  Co.  v.  Vining,  68  Ga.  197. 

'=»Cornett  v.  Phenix  Ins.  Co.,  67  Iowa,  388,  25  N.  W.  673;  Patrick 
V.  Farmers'  Ins.  Co.,  43  N.  H.  621;  Phenix  Ins.  Co.  v.  Searles,  100 
Ga.  97. 


588  WAIVER   OF   NOTICE    AND    PROOFS    OF    LOSS.  §  200 

notifies  tlie  insured  that  lie  cannot  recommend  payment  of  the 
loss  and  gives  his  reasons  therefor,  this  is  a  sufficient  denial 
■of  liability  and  a  waiver  of  the  right  to  insist  upon  the  fui*nish- 
ing  of  proofs. -^^^  An  insurer  waives  the  furnishing  of  proofs 
of  loss  and  defects  in  those  already  furnished,  by  notifying  the 
beneficiary  of  its  refusal  to  pay  because  of  a  breach  of  war- 
ranty or  of  misrepresentations  avoiding  the  policy  ;^^^  or  be- 
cause the  insured  was  engaged  in  a  different  occupation  from 
that  insured  against  ;^^^  and  by  a  denial  of  liability  because 
the  insured  had  not  title  to  the  property  destroyed  ;^^^  and  by 
•a  denial  of  liability  on  the  ground  that  the  company  had  no 
risk  on  the  property  ;^^^  and  by  denying  all  liability  under 
the  policy  Avithout  giving  any  reasons  therefor.  ^^^  Failure  to 
furnish  proofs  of  death,  or  the  furnishing  of  defective  proofs, 
is  waived  by  the  refusal  of  the  company  to  pay  on  other 
grounds  ;^"^  and  by  a  denial  of  liability  on  the  ground  that  the 
policy  was  void.^^^  The  withholding  of  an  insurance  policy 
after  an  oral  preliminary  contract  to  insure  and  the  denial  of 
the  right  of  the  insured  to  its  issuance,  is  a  waiver  of  the  con- 
ditions in  the  policy  requiring  proofs  of  loss.^^^     Proof  of  the 

"» McBride  v.  Republic  Fire  Ins.  Co.,  30  Wis.  562. 

"^Lampkin  v.  Travelers'  Ins.  Co.,  11  Colo.  App.  249,  52  Pac.  1040. 

"''  Standard  L.  &  A.  Ins.  Co.  v.  Koen,  11  Tex.  Civ.  App.  273,  33  S.  W. 
133. 

''^German  Fire  Ins.  Co.  v.  Gueck,  130  111.  345,  6  L.  R.  A.  835; 
Grange  Mill  Co.  v.  Western  Assur.  Co.,  118  111.  396. 

"*King  V.  Hekla  Fire  Ins.  Co.,  58  Wis.  508;  Brown  v.  London 
Assur.  Corp.,  40  Hun  (N.  Y.),  101;  Helvetia  Swiss  Fire  Ins.  Co.  v. 
Edward  P.  Allis  Co.,  11  Colo.  App.  264,  53  Pac.  242. 

135  Virginia  F.  &  M.  Ins.  Co.  v.  Goode,  95  Va.  762,  30  S.  E.  370. 

""Standard  L.  &  A.  Ins.  Co.  v.  Thornton,  97  Tenn.  1,  40  S.  W.  136; 
Jefferson  v.  German-American  Mut.  Life  Ass'n,  69  Mo.  App.  126; 
Dooly  V.  Hanover  Fire  Ins.  Co.,  16  Wash.  155,  47  Pac.  507. 

"'Lancashire  Ins.  Co.  v.  Monroe,  101  Ky.  12,  39  S.  W,  434;  Aetna 
Ins.  Co.  V.  Simmons,  49  Neb.  811,  69  N.  W.  125;  Robinson  v.  Pennsyl- 
Tania  Fire  Ins.  Co.,  90  Me.  385. 

"'Sproul  V.  Western  Assur.  Co.,  33  Or.  98,  54  Pac.  180. 


§  200  DENIAL    OF    LIABILITY.  589 

death  of  a  member  of  a  fraternal  order,  is  waived  by  a  denial 
of  all  liability  on  the  part  of  the  insurer  and  its  refusal  to 
pay  the  policy  upon  the  ground  that  the  deceased  was  not  in- 
sured at  the  time  of  his  death.^^^  If  the  contract  for  insur- 
ance  has  been  completed,  but  no  policy  has  been  issued  prior 
to  the  fire,  the  subsequent  refusal  of  the  insurer  to  issue  the 
policy  and  its  denial  of  the  contract,  waives  the  furnishing  of 
proofs.  ^■^'^ 

In  an  action  for  breach  of  contract  to  insure  property  where 
no  policy  has  been  issued,  the  failure  to  make  proofs  of  loss 
as  required  by  the  policy  such  as  the  one  agreed  upon  would 
have  been  if  issued,  is  no  defense.^^^  But  if  the  insured 
claims  that  the  contract  is  in  force,  and  brings  his  action  upon 
the  theory  that  he  is  insured  under  the  policy  usually  issued 
by  the  insurer,  he  is  bound  by  the  conditions  usually  found  in 
such  policies  ;  and  the  denial  by  the  insurer  after  suit  brought 
of  any  contract  to  insure,  or  the  existence  of  any  insurance, 
does  not  waive  non-compliance  by  the  insured. -^^^ 

What  Denial  Does  Not  Waive. 

The  rule  that  an  insurer  waives  the  furnishing  of  further 
proofs  of  loss,  or  of  any  proofs  of  loss  thereafter,  by  a  denial 
of  lialtilit}^,  proceeds  upon  the  doctrine  of  estoppel ;  and,  while 
it  is  not  always  necessary  that  the  insured  should  have  relied 
and  acted  upon  the  denial  of  liability  before  the  expiration  of 
the  time  for  furnishing  proofs,^'*^  yet  a  denial  of  liability 

"=  Daniher  v.  Grand  Lodge,  A.  0.  U.  W.,  10  Utah,  110,  37  Pac.  245. 

"'"Tayloe  v.  Merchants'  Fire  Ins.  Co.,  9  How.  (U.  S.)  390. 

'*^  Campbell  v.  American  Fire  Ins.  Co.,  73  Wis.  100,  40  N.  W.  661; 
Gold  V.  Sun  Ins.  Co.,  73  Cal.  216;  American  Cent.  Ins.  Co.  v.  Simp- 
son, 43  111.  App.  98;  Sanford  v.  Orient  Ins.  Co..  174  Mass.  416,  49 
Cent.  Law  J.  467;  Unsell  v.  Hartford  Life  &  Annuity  Ins.  Co.,  32  Fed. 
443;  Sproul  v.  Western  Assur.  Co.,  33  Or.  98,  54  Pac.  180. 

'*-  Barre  v.  Council  Bluffs  Ins.  Co.,  76  Iowa,  609,  41  N.  W.  373. 

^"Wilson  V.  Commercial  Union  Assur.  Co.,  51  S.  C.  540,  29  S.  E. 
245. 


590 


WAIVER   OF   NOTICE    AND   PROOFS    OF    LOSS. 


§200 


or  a  refusal  of  the  insurer  to  pay  docs  not  constitute  a  waiver 
of  either  notice  or  proofs  of  loss  or  defects  in  those  already 
furnished,  unless  made  under  such  circumstances,  and  at  such 
a  time,  and  in  such  a  manner,  as  to  warrant  and  justify  the 
insured  in  believing  that  proofs  of  loss  are  not  desired  and  will 
not  be  required  and  if  furnished  would  be  unavailing. ^^^  The 
furnishing  of  proofs  is  not  waived  by  the  refusal  of  an  ad- 
juster to  pay  the  full  amount  of  a  policy  upon  the  ground  that 
the  insured  had  made  false  representations  in  his  application 
for  insurance  and  that  he  had  burned  the  property,  coupled 
with  the  assertion  that  the  insured  must  furnish  the  proofs 
according  to  the  terms  of  the  policy.  ^'*^  An  insurer  does  not 
waive  its  right  to  demand  proofs  of  loss,  or  the  production  of 
invoices,  or  an  inspection  of  books  and  papers,  by  denying 
liability  for  a  portion  of  the  articles  contained  in  the  inven- 
tory of  destroyed  property  furnished  by  the  insured.  ^^^  And 
proofs  are  not  waived  under  a  Michigan  standard  policy  by  a 
statement  of  the  adjuster  to  the  insured  that  his  company 
would  not  settle  upon  basis  of  settlement  and  arbitration 
agreed  to  by  other  companies  having  insurance  on  the  same 
property. ^'^'^  The  refusal  by  the  adjuster  of  an  insurer  to 
pay  the  full  amount  of  a  policy  upon  the  ground  that  the  as- 


i« Peoples'  Bank  v.  Aetna  Ins.  Co.  (C.  C.  A.),  74  Fed.  507;  Equi- 
table Life  Assur.  Soc.  v.  Winning  (C.  C.  A.),  58  Fed.  541;  Phoenix 
Ins.  Co.  V.  Minner,  64  Ark.  590,  44  S.  W.  75;  Cornett  v.  Phenix  Ins. 
Co.,  67  Iowa,  388,  25  N.  W.  673;  Titus  v.  Glens  Falls  Ins.  Co.,  81 
N.  Y.  419;  Armstrong  v.  Agricultural  Ins.  Co.,  130  N.  Y.  563;  Ermen- 
trout  V.  Girard  F.  &  M.  Ins.  Co.,  63  Minn.  305,  65  N.  Y.  635,  30  L.  R. 
A.  346;  Weidert  v.  State  Ins.  Co.,  19  Or.  261;  Engebretson  v.  Hekla 
Fire  Ins.  Co.,  58  Wis.  301;  Blossom  v.  Lycoming  Fire  Ins.  Co.,  64 
N.  Y.  166. 

"'  Phoenix  Ins.  Co.  v.  Minner,  64  Ark.  590,  44  S.  W.  75. 

iw  Milwaukee  Mechanics'  Ins.  Co.  v.  Winfield,  6  Kan.  App.  527,  51 
Pac.  567. 

"'  Wadhams  v.  Western  Assur.  Co.,  117  Mich.  514,  76  N.  W.  6. 


§  200  DENIAL   OF   LIABILITY.  591 

sured  made  false  statements  in  Ms  application  for  insurance 
and  that  he  was  guilty  of  incendiarism,  does  not  waive  the 
furnishing  of  proofs  according  to  the  terms  of  the  policy. ^^^ 

Hetraction  of  Waiver  by  Denial. 

The  doing  by  the  insurer  of  an  act  which  in  law  amounts 
to  a  Avaiver  of  proofs  will  not  estop  it  from  subsequently  de- 
manding and  requiring  the  insured  to  furnish  proofs,  pro- 
vided the  latter  has  not  acted  upon  the  waiver,  so  that  its 
withdrawal  will  leave  him  in  a  worse  position  than  he  would 
otherwise  have  occupied,  and  provided  also  there  still  remains 
a  reasonable  opportunity  to  furnish  proofs  before  the  expira- 
tion of  the  time  fixed  by  the  policy.  ^^^  Otherwise  if  the  in- 
sured had  acted  upon  the  waiver  so  that  he  will  be  prejudiced 
by  its  retraction. ^^"^  Thus  the  furnishing  of  preliminary 
proofs  of  loss  is  not  waived  by  the  refusal  of  the  adjuster  to 
settle  a  loss  and  his  statement  that  the  loss  would  not  be  paid 
because  of  a  change  in  the  use  of  the  building  insured  contraiy 
to  the  terms  of  the  policy,  where  the  general  agent  of  the  in- 
surer within  the  time  limited  for  the  furnishing  of  proofs, 
and  while  the  insured  yet  had  time  to  comply  with  the  require- 

'*^  Phoenix  Ins.  Co.  v.  Minner,  64  Ark.  590,  44  S.  W.  75;  Citizens' 
Fire  Ins.,  S.  &  L.  Co.  v.  Doll,  35  Md.  89.  See,  also,  Robinson  v.  Penn- 
sylvania Fire  Ins.  Co.,  90  Me.  385;  Welsh  v.  London  Assur.  Corp., 
151  Pa.  St.  607;  New  York  Life  Ins.  Co.  v.  Eggleston,  96  U.  S.  572; 
Agricultural  Ins.  Co.  v.  Potts,  55  N.  J.  Law,  158;  Wheatoij.  v.  North 
British  &  M.  Ins.  Co.,  76  Cal.  415;  Devens  v.  Mechanics'  &  Traders' 
Ins.  Co.,  83  N.  Y.  168. 

""  Hahn  v.  Guardian  Assur.  Co.,  23  Or.  576,  32  Pac.  683 ;  Scottish 
U.  &  N.  Ins.  Co.  V.  Clancy,  71  Tex.  5;  Joyce,  Ins.  §  3371;  Gauche  v. 
London  &  L.  Ins.  Co.,  4  Woods  (U.  S.),  102,  10  Fed.  347;  Farmers' 
Fire  Ins.  Co.  v.  Mispelhorn,  50  Md.  180;  Williams  v.  Queen's  Ins.  Co., 
39  Fed.  167;  Shaw  v.  Republic  Life  Ins.  Co.,  69  N.  Y.  286;  Phenix  Ina. 
Co.  V,  Searles,  100  Ga.  97;  Findeisen  v.  Metropole  Fire  Ins.  Co.,  57 
Vt.  520;  Phcenix  Ins.  Co.  v.  Minner,  64  Ark.  590,  44  S.  W.  75. 

""  German  Ins.  Co.  v.  Gibson,  53  Ark.  494. 


592  WAIVER    OF    NOTICE    AND    PROOFS    OF    LOSS.  §  201 

ments  of  tlie  j)olicy,  demanded  proofs  of  loss  and  with  liis  de- 
mand inclosed  suitable  blanks  therefor.  ^^^ 

And  a  letter  bv  the  secretary  of  the  insurer  to  a  policy- 
holder wlio  claimed  to  have  suffered  a  loss  under  the  temis  of 
the  i^olicy,  in  which  letter  the  secretaiy  stated  that,  after  in- 
vestigation, he  considered  the  claim  invalid,  but  that  the  in- 
sured could  reopen  the  case  and  make  proofs  of  loss,  and  speci- 
fying what  the  proofs  must  contain,  does  not  constitute  a 
waiver  where  such  letter  was  ^^Titten  and  received  while  yet 
there  was  time  to  furnish  proofs  of  loss.^^^  Proofs  of  loss 
are  not  waived  by  the  special  agent  of  an  insurer  refusing  to 
pay  the  loss  and  stating  to  the  insured  that  he  neither  admitted 
nor  denied  the  company's  liability,  where  a  stipulation  was 
subsequently  made  between  the  insured  and  the  insurer  that 
such  agent  should  examine  the  facts  concerning  the  loss 
without  waiving  any  of  the  terms  of  the  policy. -^^^ 

Same  —  After  Time  to  Furnish  Proofs  Has  Expired. 

§  201.  The  denial  of  liability  by  an  insurer  and  its  refusal  to 
pay  (a  loss  under  a  policy)  which  will  amount  to  a  waiver  of 
notice  or  proof,  must  be  made  within  the  time  in  which  no- 
tice or  proof  can  under  the  policy  be  furnished. 

There  is  no  waiver  of  proofs  of  loss  by  a  denial  of  liability 
made  by  the  insurer  after  the  time  for  furnishing  proofs  has 
exiDired.  This  is  true  whether  the  policy  requires  proofs  to  be 
furnished  within  a  stated  time,  or  immediately,  or  within  a 
reasonable  time.^^*  The  clear  reason  for  this  rule  is  that 
while,  within  the  time  limited,  the  insurer's  conduct  may  be 

"1  Hahn  v.^Guardian  Assur.  Co.,  23  Or.  576,  32  Pac.  683. 

^^•^  Welsh  V.  Des  Moines  Ins.  Co.,  77  Iowa,  376,  42  N.  W.  324;  Ben- 
nett V.  Lycoming  County  Mut.  Ins.  Co.,  67  N.  Y.  274. 

"^  Insurance  Co.  of  North  America  v.  Caruthers  (Miss.),  16  So.  911. 

1^^  Edwards  v.  Baltimore  Fire  Ins.  Co.,  3  Gill  (Md.),  176,  2  Ben- 
nett, Fire  Ins.  Cas.  405;  Smith  v.  Haverhill  Mut.  Fire  Ins.  Co.,  1 
Allen  (Mass.),  297;  Trask  v.  State  F.  &  M.  Ins.  Co.,  29  Pa.  St.  198; 


§  202  DENIAL    OF    LIABILITY    IN    ANSWEK.  593 

such  as  to  lead  the  insured  to  believe  that  no  compliance  would 
be  required  or  be  deemed  material,  and  but  for  such  conduct 
the  insured  might  have  rendered  full  compliance;  yet  if  the 
specified  time  has  elapsed,  and  the  insured  has  failed  to  com- 
ply with  the  requirements  of  the  policy,  and  has  thereby  lost 
all  his  rights  without  the  fault  of  the  insurer,  its  subsequent 
conduct,  short  of  an  express  agreement  to  waive,  or  a  distinct 
recognition  of  liability  acted  upon  by  the  insured  to  his  in- 
jury, would  be  of  no  effect;  for  they  could  work  no  possible 
harm  to  the  insured  who  has  already  lost  all  his  rights.^^^ 
The  conduct  of  an  adjusting  agent  for  an  insurer  after  the 
expiration  of  the  time  limited  for  furnishing  proofs  of  loss 
cannot  be  relied  on  as  a  waiver  of  the  failure  to  furnish  proofs 
within  the  required  time.^^® 

Same  —  In  Answek. 

,  §  202.  Defendant  insurance  company  waives  notliing  by  as- 
serting all  possible  defenses  when  sued. 

An  insurance  company  is  entitled,  when  sued  upon  the 
policy,  to  assert  as  many  defenses  as  it  has  under  the  law, 
provided  they  are  not  inconsistent  with  each  other;  and  the 

Insurance  Co.  of  TTorth  America  v.  Brim,  111  Ind.  281;  Killips  v.  Put- 
nam Fire  Ins.  Co.,  28  Wis.  472;  Employers'  Liability  Assur.  Corp.  v. 
Rochelle,  13  Ttx.  Civ.  App.  232,  35  S.  W.  869.  See,  also,  ante,  §§  197, 
198,  "Silence."  Compare  Johnson  v.  Dakota  F.  &  M.  Ins.  Co.,  1  N.  D. 
167,  45  N.  W.  799;  Fink  v.  Lancashire  Ins.  Co.,  60  Mo.  App.  673. 

"•'Leigh  V.  Springfield  F.  &  M.  Ins.  Co.,  37  Mo.  App.  542;  Beatty  v. 
Lycoming  County  Mut.  Ins.  Co.,  66  Pa.  St.  9;  Erwin  v.  Springfield  F. 
&  M.  Ins.  Co.,  24  Mo.  App.  152;  Engebretson  v.  Hekla  Fire  Ins.  Co., 
58  "Wis.  301;  Ermentrout  v.  Girard  F.  &  M.  Ips.  Co.,  63  Minn.  305,  30 
L.  R.  A.  346;  Blossom  v.  Lycoming  Fire  Ins.  Co.,  64  N.  Y.  166;  Dwel- 
ling House  Ins.  Co.  v.  Jones,  47  111.  App.  261.  See,  also,  cases  cited 
to  §§  197,  198. 

'^'Albers  v.  Phoenix  Ins.  Co.,  68  Mo.  App.  543;  Smith  v.  State  Ins, 
Co.,  64  Iowa,  716,  21  N.  W.  145;  Brown  v.  London  Assur.  Corp.,  40 
Hun  (N.  Y.),  101. 

KERR,  INS.  — 38 


594  WAIVER   OF   NOTICE    AND    PEOOFS    OF   LOSS.  §  202 

pleading  in  its  answer  that  the  insured  lias  no  right  to  re- 
cover, or  that  the  insured  has  failed  to  comply  with  any  of  the 
conditions  of  a  policy,  or  that  the  insured  has  violated  any 
of  the  conditions  of  a  policy,  cannot  be  construed  as  a  waiver 
of  the  failure  of  the  insured  to  perform  fully  what  the  policy 
required  him  to  do.  The  setting  up  of  one  defense  cannot  be 
construed  as  a  waiver  of  another. 

In  a  federal  case  it  was-  contended  that  the  insurer  having 
by  its  answer  denied  all  liability  under  the  policy,  and  having 
also  alleged  the  failure  of  the  insured  to  comply  with  certain 
conditions  precedent  to  a  right  of  action,  had  by  its  formal 
plea  waived  the  right  to  insist  upon  this  non-compliance.  The 
court  said  in  substance :  this  denial  of  liability  was  not  made 
until  after  the  plaintiff  had  instituted  this  action,  which  under 
defendant's  contention  cannot  be  maintained.  That  the  com- 
pany has  set  up  in  one  count  of  its  answer  a  denial  of  any  lia- 
bility does  not  affect  the  case.  It  might  waive  any  objection 
to  the  cause  of  the  fire  and  offer  to  settle  to  avoid  litigation, 
but  this  does  not  affect  its  right  when  sued  to  set  up  in  its 
answer  any  and  all  legal  defenses  it  has  to  the  action.  •'^'^ 

"'Kahnweiler  v.  Phoenix  Ins.  Co.,  57  Fed.  562;  Murphy  v.  North- 
ern British  &  M.  Co..  61  Mo.  App.  333;  Lane  v.  St.  Paul  F.  &  M. 
Ins.  Co.,  50  Minn.  227;  La  Plant  v.  Firemen's  Ins.  Co.,  68  Minn.  82; 
Balmford  v.  Grand  Lodge,  A.  O.  U.  W.,  19  Misc.  Rep.  (N.  Y.)  1; 
Yendel  v.  Western  Assur.  Co.,  21  Misc.Rep.  (N.  Y.)  351;  Armstrong 
V.  Agricultural  Ins.  Co.,  130  N.  Y.  566;  Trask  v.  State  F.  &  M.  Ins. 
Co.,  29  Pa.  St.  198.  See,  also,  cases  cited  under  section  next  preced- 
ing, and  cases  cited  to  section  on  "Silence."  The  contrary  doctrine 
has  been  asserted  in  Omaha  Fire  Ins.  Co.  v.  Hildebrand,  54  Neb.  306, 
74  N.  W.  589,  27  Ins.  Law  J.  730;  Western  Home  Ins.  Co.  v.  Richard- 
son, 40  Neb.  1,  58  N.  W.  597;  Helvetia  Swiss  Fire  Ins.  Co.  v,  Edward 
P.  Allis  Co.,  11  Colo.  App.  264,  53  Pac.  242.  And  see  Johnson  v.  Da- 
kota F.  &  M.  Ins.  Co.,  1  N.  D.  167,  45  N.  W.  799;  Crenshaw  v.  Pa- 
cific Mut.  Life  Ins.  Co.,  71  Mo.  App.  431. 


§  203  negotiatioxs  for  settlement.  695 

Negotiations  fob  Settlement. 

§  203.  The  offer  of  an  insurer  to  pay  an  amount  less  than 
that  claimed  by  the  insured  by  way  of  compromise  and  settle- 
ment of  a  loss,  will  not  alone  constitute  a  waiver. 

But  a  waiver  may  be  found  when  the  acts  and  negotiations 
between  insurer  and  insured  are  of  such  a  nature 

(a)  As  to  indicate  the  intention  of  the  former  to  forego  its 

right  to  require  proofs, 

(b)  And  to  induce  the  latter  to  neglect  to  furnish  them. 

Waiver  by  Negotiations. 

Tlie  negotiations  between  the  insurer  and  tlie  insured  after 
a  loss  looking  towards  a  compromise  or  settlement  are  fre- 
quently of  such  a  nature  as  to  dispense  with  the  furnishing  of 
notice  or  proofs.  We  have  already  seen  that  if  after  a  loss 
has  occurred,  the  insured  has  furnished  proofs  of  loss  in  at- 
tempted compliance  with  the  policy,  or  if  the  insurer  has  pre- 
pared such  proofs  as  it  deems  essential,  the  insured  is  entitled 
to  assume  until  notified  to  the  contrary  that  additional  notice 
and  proofs  are  not  required. 

It  often  happens  that  following  the  loss,  the  insurer  investi- 
gates it,  has  communications  and  negotiations  with  the  in- 
sured looking  towards  a  settlement  or  adjustment  of  his 
claims,  from  which  it  might  be  inferable  that  the  insurer  did 
not  desire  or  intend  to  require  any  notice  or  proofs  to  be  fur- 
nished. The  acts  and  negotiations  which  will  constitute  a 
waiver  of  notice  or  proofs  must  be  of  such  a  character  and 
made  under  such  circumstances  as  to  reasonably  indicate  an 
intention  on  the  part  of  the  insurer  to  waive  its  rights  to  have 
notice  or  proofs  or  both  furnished,  and  such  as  to  reasonably 
induce  the  belief  upon  the  part  of  the  insured  that  the  notice 
or  proofs  will  be  an  unnecessaiy  formality. -^^^     Any  delay 

"•Robinson  v.  Pennsylvania  Fire  Ins.  Co.,  90  Me.  385;  Eastern  R. 
Co.  V.  Relief  Fire  Ins.  Co.,  105  Mass.  579;  Brewer  v.  Chelsea  Mut. 
Fire   Ins.  Co.,  14   Gray  (Mass.),  209;    Blake  v.  Exchange   Mut.  Ins. 


596  WAIVER    OF    NOTICE    AXD    PROOFS    OF    LOSS.  §  203- 

in  tlie  fumishing  of  notice  or  proofs  reasonably  induced  by 
the  conduct  of  the  insurer  in  its  negotiations  for  compromise 
or  settlement  cannot  be  taken  advantage  of  by  it.^^^ 

Preliminary  proofs  of  loss  are  waived  by  tbe  insurer's 
sending  its  adjuster  to  tbe  scene  of  tbe  fire  immediately  there- 
after with  full  power  to  adjust  and  settle  the  loss  when  the 
company  had  thereto  been  fully  informed  of  the  circumstances 
attending  the  fire  and  the  adjuster  attempts  to  obtain  a  settle- 
ment, the  only  question  in  dispute  being  the  amount  of  the 
loss,  and  where  the  insurer  takes  possession  of  the  damaged 
property  and  examines  it  for  the  purpose  of  ascertaining  the 
amount  and  extent  of  damage,  and  by  an  adjuster's  offering 
to  pay  a  less  amount  than  the  face  of  the  policy  and  making  no 
other  objection  to  a  settlement  and  not  intimating  that  the 
company  would  require  any  proofs  ;^^°  and  by  the  insurer, 
after  it  has  knowledge  of  the  loss,  taking  possession  of  the 
damaged  property  and  the  books  of  the  insured  and  investi- 
gating the  extent  of  the  loss;^^^  and  by  the  insurer  referring 
the  matter  of  a  loss  to  its  adjuster,  who,  having  full  power  to 
investigate  and  settle,  examines  into  the  facts,  negotiates  with 
the  insured  for  a  compromise  and  leads  the  latter  to  believe 
that  there  is  nothing  in  the  way  of  a  settlement  except  a  dif- 
ference of  opinion  as  to  the  value  of  the  property  destroyed. ^^^ 

Co.,  12  Gray  (Mass.),  265;  Underbill  v.  Agawam  Mut.  Fire  Ins. 
Co.,  6  Cush.  (Mass.)  440;  Fulton  v.  Phoenix  Ins.  Co.,  51  Mo.  App. 
460;  Roberts  v.  Northwestern  Nat.  Ins.  Co.,  90  Wis.  210,  62  N,  W. 
1048;  Lake  v.  Farmers'  Ins.  Co.,  110  Iowa,  473,  81  N.  W.  711;  Gris- 
tock  V.  Royal  Ins.  Co.,  87  Micb.  428,  49  N.  W.  634,  84  Micb.  161,  47 
N.  W.  549;  Wrigbt  v.  London  Fire  Ins.  Ass'n,  12  Mont.  474,  19  L,  R. 
A.  211. 

^'»  Argall  V.  Old  Nortb  State  Ins.  Co.,  84  N.  C.  355. 

""Phoenix  Ins.  Co.  v.  Levy,  12  Tex.  Civ.  App.  45,  33  S.  W.  992; 
Mitchell  V.  Orient  Ins.  Co.,  40  111.  App.  Ill;  German  Ins.  Co.  v.  Gray, 
43  Kan.  497,  8  L.  R.  A.  70. 

"^  St.  Paul  F.  &  M.  Ins.  Co.  v.  Gotthelf,  35  Neb.  351,  53  N.  W.  137. 

"'Hitchcock  v.  State  las.  Co.,  10  S.  D.  271,  72  N.  W.  898;  George 


§  203  NEGOTIATIONS    FOR    SETTLEMENT.  597 

Contra  —  No  Waiver. 

But  an  offer  of  compromise  made  by  tlie  insurer  after  tlio 
expiration  of  the  time  for  furnishing  proofs  of  loss  is  no 
waiver  of  proofs  of  loss.^^^  And  a  mere  offer  to  pay  less  than 
the  amount  of  the  claim,  cannot  be  regarded  as  a  waiver  of 
proofs  or  of  any  other  legal  right  which  the  insurer  might 
have.^^^  Where  a  policy  provides  that  no  action  taken  pre- 
liminary to  the  adjustment  of  a  claim  to  ascertain  the  amount 
and  validity  thereof  shall  be  constmed  as  a  waiver  of  any  of 
the  rights  of  the  company,  the  making  of  a  statement  of  the 
property  lost  at  the  request  of  an  adjuster  who  is  investigat- 
ing the  loss  does  not  dispense  with  the  furnishing  of  proper 
proofs. ^*^^  Nor  does  the  offer  of  an  agent  and  adjuster  of 
the  insurer  to  advise  the  payment  of  a  certain  sum  in  settle- 
ment of  a  loss  when  the  offer  is  rejected  by  the  instired,  who  is 
then  told  he  must  look  to  the  policy  for  his  remedy.  ^^^  The  fur- 
nishing of  notice  and  proofs  in  accordance  with  the  terms  of 
a  policy  is  not  waived  by  the  payment  of  a  loss  to  the-  mort- 
gagee of  the  insured  property  under  an  agTeement  between 
him  and  the  insurer  providing  for  a  continuation  of  the  policy, 
and  for  subrogation  of  the  company  to  the  mortgagee's  rights 

Dee  &  Sons  Co.  v.  Key  City  Fire  Ins.  Co.,  104  Iowa,  167,  73  N.  W.  594; 
Brock  V.  Des  Moines  Ins.  Co.,  106  Iowa,  30,  75  N.  W.  683;  Perry  v. 
Dwelling-House  Ins.  Co.,  67  N.  H.  291,  33  Atl.  731. 

And  any  conduct  of  insurer  in  negotiating  for  settlement  which 
justifies  the  insured  in  an  expenditure  of  time  and  money,  under  the 
honest  belief  that  there  is  an  admission  of  liability  and  a  desire  and 
willingness  of  the  insurer  to  make  an  equitable  adjustment,  is  a 
waiver.  Wicking  v.  Citizens'  Mut.  Fire  Ins.  Co.,  -118  Mich.  640,  77 
N.  W.  278. 

^^  Leigh  v.  Springfield  F.  &  M.  Ins.  Co.,  37  Mo.  App.  542. 

'"*  Beatty  v.  Lycoming  County  Mut.  Ins.  Co.,  66  Pa.  St.  9. 

"=  Knudson  v.  Hekla  Fire  Ins.  Co.,  75  Wis.  198,  43  N.  W.  954. 

''^«  Flanaghan  v.  Phenix  Ins.  Co.,  42  W.  Va.  426;  Knudson  v.  Hekla 
Fire  Ins.  Co.,  75  Wis.  198,  43  N.  W.  954;  Engebretson  v.  Hekla  Fire 
Ins.  Co.,  58  Wis.  301. 


598  WAIVER    OF    NOTICE    AND    PROOFS    OF    LOSS.  §  203 

to  the  extent  of  tlie  sum  paid.^^''^  Thus  where  a  policy  re- 
quired proofs  of  loss  to  be  furnished  within  thirty  days,  and 
the  evidence  disclosed  that  the  secretary  of  the  insurer,  after 
an  informal  notice  of  the  total  destruction  of  the  building  in- 
sured, went  to  the  scene  of  the  fire,  viewed  the  ruins,  obtained 
a  carpenter's  estimate  for  rebuilding,  offered  the  insured  a 
specified  sum  of  money  in  settlement,  marked  certain  items 
in  the  inventory  furnished  by  the  insured  as  articles  for 
which  the  company  was  willing  to  pay,  and  entered  into  an 
agreement  with  the  agent  of  another  insurance  company  as  to 
their  respective  pro  rata  shares  of  the  loss,  it  is  a  question 
for  a  jury  whether  or  not  there  was  a  waiver  of  proofs. ^"^^ 

An  adjuster's  investigation  into  the  circumstances  of  a 
fire,  and  his  attempt  to  agree  with  the  insured  as  to  the 
amount  of  the  loss,  and  his  offer  to  pay  a  certain  sum  in  full 
settlement,  will  not  excuse  the  insured  from  furnishing 
proofs;  but  where  the  adjuster  frequently  visits  the  scene  of 
the  fire  after  the  loss  and  makes  repeated  offers  for  compro- 
mise, and  the  only  question  ever  raised  is  as  to  the  amount  for 
which  the  insurer  was  liable,  it  may  be  a  question  of  fact 
for  a  jury  to  deteraiine  whether  or  not  there  was  a  waiver. 
"The  company  is  not  io  be  prejudiced  in  its  defense  because 
its  agent  promptly  went  to  the  scene  of  the  fire,  and  pursued 
every  allowable  method  of  investigation  of  the  loss,  and  tried 
ineffectually  to  come  to  an  understanding  with  the  insured. 
This  would  be  to  punish  for  an  effort  to  perform  duty.     *     * 

i"  Hare  v.  Headley,  54  N.  J.  Eq.  545,  35  Atl.  445. 

Before  proofs  were  made,  the  company's  adjuster  went  to  the 
scene  of  the  loss,  made  an  investigation,  and  offered  to  settle  it  on 
terms  which  were  rejected.  Defective  proofs  were  subsequently  sent,- 
and  insured  was  promptly  notified  of  the  defects  in  them.  He  did 
nothing  further  towards  perfecting  them.  Held,  that  there  was  no 
waiver.    Liverpool,  L.  &  G.  Ins.  Co.  v.  Sorsby,  60  Miss.  302. 

^^  Susquehanna  Mut.  Fire  Ins.  Co.  v.  Staats,  102  Pa.  St.  529.  See 
note  68. 


§  204       PKOCEEDINGS    TO    ASCERTAIN    OR    ADJUST    LOSSES.  599 

And  an  offer  to  pay  a  sum  less  than  tlie  amount  claimed 
will  not  [alone]  constitute  a  waiver.  There  must  be  more 
than  this.  *  *  *  Waiver  which  rests  upon  the  idea  of 
estoppel  cannot  be  predicated  of  mere  perfonnance  of  duty, 
or  exercise  of  right,  or  offer  of  compromise  by  the  insurer. 
*  *  *  But  where  there  were  frequent  negotiations  and 
letters  between  the  parties,  and  the  only  matter  of  difference 
was  as  to  the  value  of  the  property  damaged  and  how  much  the 
insurer  should  pay,  it  may  be  that  the  protracted  negotiations 
and  discussion  between  the  parties  during  which  the  liability 
of  the  insured  was  assumed  and  recognized,  and  the  only  dif- 
ference was  as  to  the  sum  to  be  paid,  was  well  calculated 
to  mislead  the  average  man  into  tlie  belief  that  he  need  not 
make  any  further  proof  of  loss  than  was  known  to  the  in- 
sured."i^9 

Proceedings  to  Ascertain"  or  Adjust  Loss. 

§  204.  The  general  rule  is  that  notice  and  proofs  of  loss  are 
unnecessary  if  the  insurer  examines  the  insured  under  oath, 
or  demands  an  arbitration,  or  makes  an  adjustment  of  the  loss. 

Many  policies  contain  express  stipulations  which  avoid  the 
application  of  this  rule. 

Examination  of  the  Insured  —  General  Rule. 

In  the  absence  of  a  contrary  stipulation  in  the  policy,  the 
failure  of  the  insured  to  furnish  notice  or  proofs  as  required 
by  the  policy,  and  all  objections  to  the  sufficiency  of  proofs 
or  notice  which  have  been  seiwed,  are  waived  by  the  insurer 
requiring  an  examination  of  the  insured  under  oath  according 
to  the  conditions  of  the  policy.^'^^ 

"•New  Orleans  Ins.  Ass'n  v.  Matthews,  65  Miss.  301;  Phenix  Ins. 
Co.  V.  Searles,  100  Ga.  97,  27  S.  E.  779;  Scottish  U.  &  N.  Ins.  Co.  v. 
Clancy,  71  Tex.  5;  Hanna  v.  American  Cent.  Ins.  Co.,  36  Mo.  App.  538. 

""Enos  y.  St.  Paul  F.  &  M.  Ins.  Co.,  4  S.  D.  639,  57  N.  W.  919;  Car- 
penter V.  German  American  Ins.  Co.,  135  N.  Y.  298;  Vergeront  v.  Ger- 
man Ins.  Co.,  86  Wis,  425,  56  N.  W.  1096;  O'Brien  v.  Ohio  Ins.  Co.,  52 


600  -SVAIVER   OF    NOTICE    AND    PROOFS    OF    LOSS.  §  204 

Wlien  Regulated  by  Stipulations  in  Policy. 

But  where  a  policy  expressly  provides  that  the  Insured 
shall,  whenever  required,  submit  to  an  examination  under 
oath  and  shall,  if  required,  produce  a  certificate  of  the  nearest 
magistrate  as  to  the  nature  and  amount  of  the  loss,  the  mere 
examination  of  the  insured  by  the  insurer  under  the  fomier 
provision  is  no  waiver  of  the  right  of  the  insurer  to  there- 
after require  a  compliance  with  the  latter  provision  ;^^^  nor 
where  the  policy  provides  that  such  act  shall  not  constitute  a 
waiver  of  any  of  the  rights  of  the  insurer  to  insist  on  compli- 
ance by  the  insured  with  all  the  terms  of  the  policy,  when  the 
insurer  expressly  stated  to  the  insured  that  in  exercising  its 
right  to  such  examination,  it  did  not  intend  to  waive  any 
rights  under  the  policy.  ^"^^  And  an  insurer  does  not  waive  a 
provision  requiring  the  insured  to  exhibit  to  its  adjuster  the 
remnants  of  the  property  destroyed,  by  requiring  an  examina- 
tion of  the  insured  after  the  receipt  of  proofs  of  loss,  where 
the  policy  provides  in  terms  that  no  waiver  shall  arise  because 

Mich.  131,  17  N.  W.  726;  Zielke  v.  London  Assur.  Corp.,  64  Wis.  442; 
Moore  v.  Protection  Ins.  Co.,  29  Me.  97.  In  Winnesheik  Ins.  Co.  v. 
Schueller,  60  111.  465,  the  policy  provided  that  the  assured  should, 
if  required,  submit  to  a  personal  examination.  The  company  did  not 
ask  for  any  examination  till  after  the  lapse  of  the  thirty  days  in 
which  the  assured  must  prove  his  loss.  Held:  (1)  that  the  examina- 
tion was  not  a  part  of  the  proof  of  loss;  (2)  that,  if  it  might  at  any 
time  constitute  a  part  of  the  proof  of  loss,  it  could  not  be  insisted 
upon  after  the  lapse  of  the  thirty  days;  (3)  that  the  company  could 
not  postpone  such  examination  for  the  purpose  of  involving  the  as- 
sured in  difficulties,  and  entrapping  her  into  violation  of  the  condi- 
tion of  the  policy.  Compare  Gauche  v.  London  &  L.  Ins.  Co.,  4 
Woods  (U.  S.),  102,  10  Fed.  347;  Lycoming  County  Ins.  Co.  v,  Upde- 
graff,  40  Pa.  St.  311;  Columbian  Ins.  Co.  v.  Lawrence,  2  Pet. 
(U.  S.)  53. 

"'Williams  v.  Queen's  Ins.  Co.,  39  Fed.  167;  Lane  v.  St,  Paul  F.  & 
M.  Ins.  Co.,  50  Minn.  227. 

"*  Phenix  Ins.  Co.  v.  Searles,  100  Ga.  97,  27  S.  E.  779. 


§  204  INVESTIGATION    OF    LOSS.  601 

of  sucli  examination.  ^'^^  In  a  Maryland  case  the  conditions 
of  the  policy  were  that  insured  should  forthwith  give  notice 
of  loss  in  writing  and  as  soon  thereafter  as  possible  deliver 
a  particular  account,  exliibit  his  hooks,  bills  of  purchase  or 
duplicates  thereof  and  other  vouclicrs,  submit  to  an  examina- 
tion under  oath,  etc.  "And  until  such  proofs,  examinations, 
declarations,  certificates  and  exhibits  are  produced,  and  per- 
mitted by  the  claimant,  when  required  as  above,  the  loss  shall 
not  be  payable,"  Notice  and  preliminary  proofs  were  fur- 
nished. The  latter  not  being  satisfactory,  an  agent  demanded 
that  insured  should  produce  his  bills  of  purchase,  and  upon 
being  informed  that  these  had  been  burned,  demanded  dupli- 
cates thereof,  which  were  not  produced.  The  company  re- 
fused to  pay  the  amount  claimed,  in  the  following  letter, 
written  in  reply  to  one  from  the  attorney  of  insured :  "I  ain 
instructed  to  say  that  the  F.  F.  I.  C.  will  contest  the  payment 
of  A.  M.'s  claim  (in  its  present  exaggerated  form),  under  the 
terms  and  conditions  of  his  policy,  though  we  should  have  pre- 
ferred an  amicable  compromise.  The  company  is  more  im- 
pelled to  this  course  as  we  cannot  learn  that  the  C  Co.  on  the 
same  risk  have  or  intend  paying  the  claim  as  made.  When 
they  pay,  this  Co.  will  probably  not  delay  longer.  If,  liowever, 
jou  prefer  litigation  with  this  Co.,  we  shall  contest  the  claim 
as  above."  Held,  that  this  was  not  a  waiver  of  the  right  to 
demand  further  preliminary  proof. ^'^^ 

Demand  for  Arbitration  or  Arbitrating. 

Any  notice  or  proof  is  waived  by  the  insurer's  demand 
for  arbitration  within  the  time  for  furnishing  proofs  of 
loss,^'^^  and  by  its  entering  into  a  submission  to  arbitration 

'"  Oshkosh  Match  Works  v.  Manchester  Fire  Assur.  Co.,  92  Wis. 
510,  66  N.  W.  525. 

"*  Farmers'  Fire  Ins.  Co.  v.  Mispelhorn,  50  Md.  180. 

'"  Pretzfelder  v.  Merchants'  Ins.  Co.,  123  N.  C.  164,  44  L.  R.  A.  424. 


602  WAIVER   OF    NOTICE   AND    PROOFS    OF   LOSS.  §  204- 

for  the  purpose  of  ascertaining  tlie  amount  of  the  loss  in  ac- 
cordance with  another  stipulation  of  the  policy,  without  hav- 
ing received  the  proofs  required  ;^'^^  and  hy  the  insurer  enter- 
ing into  an  agreement  to  pay  what  appraisers  shall  determine 
to  he  the  amount  of  the  loss.^'^'^  The  effect  of  these  acts  as 
a  waiver  is  not  lessened  by  the  failure  of  the  arbitration 
because  of  the  inability  of  the  arbitrators  to  agree  without  the 
fault  of  the  insured. ^''^^  Any  defects  in  proofs  furnished  in 
proper  time,  are  waived  by  the  insurer  thereafter  negotiating 
with  the  insured  concerning  an  adjustment  of  the  loss  and 
demanding  a  submission  to  arbitration  free  from  any  of  the 
provisions  or  conditions  not  prescribed  by  the  policy.  ^"^^ 

When  Appraisal  Must  Accompany  Proofs. 

Where  a  policy  provides  for  both  an  appraisal  and  proofs 
of  loss  and  that  appraisal  shall  accompany  the  proofs,  the 
demanding  of  an  appraisal  by  the  insurer  before  the  time  to 
furnish  proofs  has  expired,  does  not  waive  the  furnishing  of 
proofs.^®** 
Stipulations  in  Policy  Regulating  Effect  of  Arbitration. 

Any  notice  or  proof  is  waived  by  the  insurer  without  objec- 
tion joining  in  a  submission  to  arbitration  which  is  provided 

"•Caledonian  Ins.  Co.  v.  Cooke,  101  Ky.  412,  41  S.  W.  279;  Rade- 
macher  v.  Greenwich  Ins.  Co.,  75  Hun  (N.  Y.),  83;  Southern  Mut. 
Ins.  Co.  V.  Turnley,  100  Ga.  296,  27  S.  E.  975;  Home  Fire  Ins.  Co.  v. 
Bean,  42  Neb.  537;  London  &  L.  Fire  Ins.  Co.  v.  Storrs,  36  U.  S.  App. 
327,  71  Fed.  127;  Carroll  v.  Girard  Fire  Ins.  Co.,  72  Cal.  297;  Bam- 
messel  v.  Brewers'  Fire  Ins.  Co.,  43  Wis.  463;  Walker  v.  German 
Ins.  Co.,  51  Kan.  725. 

^"  Snowden  v.  Kittanning  Ins.  Co.,  122  Pa,  St.  502. 

"' Pretzfelder  v.  Merchants'  Ins.  Co.,  123  N.  C.  164,  44  L.  R.  A.  424; 
Rademacher  v.  Greenwich  Ins.  Co.,  75  Hun  (N.  Y.),  83. 

^•'Connecticut  Fire  Ins.  Co.  v,  Hamilton  (C.  C.  A.),  59  Fed.  258; 
Hamilton  v.  Phoenix  Ins.  Co.  (C.  C.  A.),  61  Fed.  379;  Home  Fire  Ins. 
Co.  V.  Bean,  42  Neb.  537. 

""Hanna  v.  American  Cent.  Ins.  Co.,  36  Mo.  App.  538;  Scottish  U. 
&  N.  Ins.  Co.  V.  Clancy,  71  Tex.  5. 


§  204  ARBITRATION    AND   ADJUSTMENT.  603 

for  in  the  policy  only  after  proofs  of  loss  have  been  served  and 
received,  although  the  policy  contains  a  provision  that  none 
of  its  conditions  shall  be  waived  except  by  the  written  en- 
dorsement of  the  president  or  secretary,  and  although  the 
submission  to  arbitration  provides  that  "this  appointment  is 
without  reference  to  any  question  or  matters  of  difference 
within  the  terms  and  conditions  of  the  insurance  and  is  not  to 
be  taken  as  any  waiver  upon  the  part  of  said  companies  of  the 
said  conditions  in  their  policies  in  case  they  elect  to  avail 
themselves  of  them."^^^ 

This  is  uix)n  the  theory  that  such  a  stipulation  did  not 
clearly  evidence  the  mutual  intent  of  the  parties  that  there 
should  be  no  waiver  of  the  right  of  the  insurer  to  require 
notice  and  proofs  according  to  the  conditions  of  the  policy. 
But  there  is  no  reason  why  the  parties  have  not  the  right 
to  stipulate  that  any  step  taken  by  them  shall  be  no  waiver 
of  any  rights  of  either,  and  they  have  the  right  to  enter  into  a 
written  stipulation  for  arbitration  with  an  express  reserva- 
tion of  all  the  rights  of  both  parties  including  the  right  to  re- 
quire notice  and  proofs  of  loss ;  and  under  such  a  stipulation, 
the  insured  will  not  be  relieved  from  performing  the  duties 
imposed  upon  him  by  the  policy. ^^^ 

Adjustment. 

The  payment  by  an  insurer  of  part  of  a  claim  asserted 
against  it  for  loss  covered  by  the  policy  of  insurance  is  a 

'"Carroll  v.  Glrard  Fire  Ins.  Co.,  72  Cal.  297;  Bishop  v.  Agricult- 
ural Ins.  Co.,  130  N.  Y.  4S8;  Gale  v.  State  Ins.  Co.,  33  Mo.  App.  664. 

'^■Oshkosh  Match  Works  v.  Manchester  Fire  Assur.  Co.,  92  Wis. 
510,  66  N.  W.  525;  Williams  v.  Queen's  Ins.  Co.,  39  Fed.  167;  Phenix 
Ins.  Co.  V.  Searles,  100  Ga.  97,  27  S,  E.  779;  Knudson  v.  Hekla  Fire 
Ins.  Co.,  75  Wis.  198,  43  N.  W.  954;  Wi eking  v.  Citizens'  Mut.  Fire 
Ins.  Co.,  118  Mich.  640,  77  N.  W.  275;  Scottish  U.  &  N.  Ins.  Co.  v. 
Clancy,  71  Tex.  5;  Lane  v.  St.  Paul  F.  &  M.  Ins.  Co.,  50  Minn.  227; 
Briggs  V.  Fireman's  Fund  Ins.  Co.,  65  Mich.  52,  31  N.  W.  616. 


■601  WAIVER   OF   NOTICE    AND   PROOFS    OF   LOSS.  §  205 

waiver  of  both  notice  and  proofs  ;^'^^  and  tlie  payment  of  a 
part  of  the  amount  claimed  into  court  ;^^^  and  a  completed  ad- 
justment of  the  loss.-^^^  But  a  partial  adjustment  of  a  loss 
and  an  offer  of  settlement  by  the  insurer  and  its  acceptance 
of  an  inventory  of  the  property  destroyed  is  not  a  waiver  of 
proofs  if  the  insured  is  at  the  same  time  notified  that  proofs 
will  be  expected  and  required,  where  the  policy  provides  that 
there  shall  be  an  appraisal  on  demand  of  either  party,  and 
that  such  appraisement  shall  be  a  part  of  the  proofs  of  loss, 
and  that  losses  shall  not  be  payable  until  such  proofs  are  fur- 
nished. ^^^ 

Furnishing  or  Refusing  to  Furnish  Blanks. 

§  205.  An  insurer  need  not  furnish  blanks  for  either  notice 
or  proofs  unless  it  is  either  expressly  or  impliedly  required  to 
do  so  by  the  policy. 

The  furnishing  of  blanks  for  proofs  before  notice  has  been 
given  may  operate  as  a  waiver  of  notice. 

The  failure  of  an  insurer  to  furnish  blanks  when  it  is  its  duty 
so  to  do,  estops  it  from  asserting  the  failure  of  the  insured  to 
furnish  notice  or  proofs  on  other  blanks. 

Demand  for  blanks  can  usually  be  made  upon  either  the  sub- 
ordinate or  supreme  council  of  a  mutual  benefit  society. 

The  insurer  is  under  no  obligation  to  notify  the  insured 
that  either  notice  or  proofs  are  required  and  need  not  furnish 
blanks  upon  which  to  make  the  same  until  they  are  demanded 
by  the  insured. ^^^     An  accident  insurance  company  waives. 

"'Westlake  v.  St.  Lawrence  County  Mut.  Ins.  Co.,  14  Barb.  (N.  Y.) 
206. 

'-*  Johnston  v.  Columbian  Ins.  Co.,  7  Johns.  (N.  Y.)  315. 

^'=^  Brock  V.  Des  Moines  Ins.  Co.,  106  Iowa,  30,  75  N.  W.  683;  Fisher 
V.  Crescent  Ins.  Co.,  33  Fed.  544. 

The  right  to  demand  the  certificate  of  a  notary,  or  claim  any  ben- 
efit because  of  failure  to  furnish  it,  is  waived  by  making  an  adjust- 
ment of  the  loss.    Levy  v.  Peabody  Ins.  Co.,  10  W.  Va.  560. 

1^"  Scottish  U.  &  N.  Ins.  Co.  v._  Clancy,  71  Tex.  5. 

"'  Continental  Ins.  Co.  v.  Dorman,  125  Ind.  189. 


§  205        FUKNISHING   OR    REFUSING    TO   FURXISH    BLANKS. 


605- 


the  provisions  of  a  policy  requiriug  notice  of  accident  by  fur- 
nishing to  the  insured  blanks  on  which  to  make  proofs  of  dis- 
ability without  objecting  to  his  failure  to  give  the  notice 
stipulated  for,^^^  But  a  waiver  of  notice  or  proofs  always 
implies  a  knowledge  on  the  part  of  the  insurer  of  the  occur- 
rence and  date  of  the  event  or  peril  or  loss  insured  against. 

It  is  a  general  rule  that  if  after  knowledge  of  the  occurrence 
of  a  loss,  the  insurer,  with  knowledge  that  the  insured  has 
failed  to  give  either  notice  or  proofs  within  the  time  fixed 
by  the  policy,  after  the  expiration  of  such  time  furnishes  to 
the  insured  blanks  upon  which  to  make  proofs  or  notice,  or 
does  any  act  from  which  it  can  reasonably  be  inferred  that  it 
desires  either  notice  or  proofs,  and  the  insured  thereafter  and 
within  a  reasonable  time  fills  up  and  returns  such  Idanks  or 
accedes  to  the  requirement  of  the  company,  the  latter  will  be 
held  estopped  to  assert  the  original  forfeiture. ^^^  Otherwise 
if  the  insurer  acted  without  knowledge  of  the  true  facts  in  the 
case,  for  then  the  essential  element  of  intent  would  be  lacking. 
Thus  where  an  accident  insurance  policy  required  that  the 
eomilany  should  be  notified  of  an  injury  within  ten  days  after 
it  had  been  received  and  that  failure  to  give  such  notice  should 
bar  all  claims  under  the  policy,  no  suit  can  be  maintained  if 
notice  be  not  given  uutil  twenty-six  days  after  the  accident, 
notwithstanding  the  fact  that  thereafter  and  before  it  knew 
of  the  date  of  the  accident,  the  insurer  furnished  blank  proofs 
of  loss  to  the  insured  at  his  request  and  demanded  from  him 
further  information  as  to  the  nature  and  circumstances  of  the 
injury. ^^°  And  the  failure  of  an  insured  to  comply  with  the 
requirements  of  a  policy  regarding  notice  of  the  sickness  of 
a  horse  is  not  waived  by  the  insurer  furnishing  blanks  to  the 

"'Crenshaw  v.  Pacific  Mut.  Life  Ins.  Co.,  71  Mo.  App.  42;  Peabody 
V.  Fraternal  Ace.  Ass'n,  89  Me.  9G. 
"'•'  See  ante,  notes  66-76. 
""  Heywood  v.  Maine  Mut.  Ace.  Ass'n,  85  Me.  289. 


606  WAIVER   OF   KOTICE    AND    PROOFS    OF    LOSS.  §  205 

insured  "vvliere  it  had  at  the  time  no  knowledge  of  the  facts 
and  circumstances  surrounding  the  death  of  the  horse. -^^-^ 

It  has  been  asserted  that  the  furnishing  of  notice  and  proofs 
is  waived  by  the  failure  of  the  insurer  to  furnish  blanks  there- 
for to  the  insured  upon  his  demand.  The  cases  supporting 
this  rule  almost  without  exception  deal  with  the  rights  of  i)ar- 
ties  under  policies  requiring  notice  or  proofs  to  be  on  blanks 
furnished  by  the  insurer  or  on  forms  prescribed  by  it.  There 
is  no  obligation  of  the  insurer  to  the  insured  except  it  be  im- 
posed by  the  terms  of  the  contract  or  by  statute  or  by  the 
conduct  of  the  insurer  itself. ^'''^  Such  obligation,  and  none 
other,  must  the  insurer  discharge.  There  is  no  doubt  but  that 
when  the  proofs  are  made  upon  blanks  to  be  furnished  by  the 
insurer,  its  failure  to  furnish  blanks  upon  demand  relieves 
the  insured  from  the  necessity  of  supplying  proofs.  ^^^  So 
where  the  duty  is  imposed  by  statute. ^^^^  And  when  an  in- 
surer's by-laws  provide  "that  proof  of  death  shall  be  made  on 
blanks  furnished  by  the  society,  with  the  seal  of  the  lodge  to 
which  the  member  belongs,  or  of  the  nearest  lodge  to  the 
deceased,"  and  blanks  are  not  furnished  upon  proper  applica- 
tion, proof  of  death  may  be  made  without  such  blanks,  and 
in  such  case  the  proofs  need  not  bear  the  seal  of  any  lodge.  ^^^ 

In  a  New  York  case,  where  it  appeared  by  the  evidence  of 
defendant's  officers,  that  the  company  was  provided  with 
blanks  for  proofs  and  that  it  was  the  custom  upon  the  death  of 
an  insured  to  send  blanks  to  his  representatives  or  to  the  local 
agent,  that  notice  of  death  was  given  and  afterwards  applica- 

"1  Alston  V.  Northwestern  Live  Stock  Ins.  Co.,  7  Kan.  App.  179,  53 
Pac.  784. 

'»^  Continental  Ins.  Co.  v.  Dorman,  125  Ind.  189. 

"'Covenant  Mut.  Ben.  Ass'n  v.  Spies,  114  111.  463;  Dial  v.  Valley 
Mut.  Life  Ass'n,  29  S.  C.  561;  Pray  v.  Life  Indemnity  &  Security  Co., 
104  Iowa,  114,  73  N.  W.  485. 

i»3a  Meyer  v.  Insurance  Co.  of  North  America,  73  Mo.  App.  166. 

"*  Gellatly  v.  Minnesota  Odd  Fellows'  Mut.  Ben.  Soc,  27  Minn.  215. 


§  205         FCKNISHING    OR    KEFUSING    TO   FURNISH    BLANKS.' 


607 


tion  was  made  to  tlie  insurer  for  blank  proofs  which  were  re- 
fused, it  was  held  that  ''the  proofs  of  death  called  for  by  the 
terms  of  the  policy  must,  in  view  of  the  custom  of  the  defend- 
ant, *  *  *  be  held  to  relate  to  proofs  according  to  its  in- 
structions and  upon  blanks  to  be  by  it  furnished. "  ^^^  xVu 
insurer's  refusal  to  furnish  blanks  upon  the  ground  that  it  is 
not  liable  under  the  policy  operates  as  a  waiver  of  proofs. ^^^ 

Mutual  Benefit  Societies. 

It  would  seem  that  in  the  absence  of  any  stipulation  to  the 
contrary,  a  demand  for  blanks  can  properly  be  made  upon 
either  the.  subordinate  or  supreme  council  of  a  mutual  insur- 
ance association.  The  failure  of  the  subordinate  council  or 
any  agent  of  the  order  to  properly  discharge  its  duty  in  any 
detail  connected  with  the  making  or  furnishing  of  notices  or 
proofs  or  blanks  for  the  same,  cannot  prejudice  the  claim- 
ant. ^^'^  And  if  a  supreme  lodge  of  an  association  declines  to 
recognize  a  demand  upon  it  for  blanks  upon  the  ground  that 
the  matter  should  properly  be  taken  up  with  a  subordinate 
lodge,  it  thereby  casts  the  burden  of  supplying  the  proofs  upon 
the  subordinate  lodge  and  cannot  take  advantage  of  the  fail- 
ure of  the  latter  to  act.^^^ 

"'Grattan  v.  Metropolitan  Life  Ins.  Co.,  80  N.  Y.  281;  Hoffman  v. 
Manufacturers'  Ace.  Ind.  Co.,  56  Mo.  App.  301. 

""Evarts  v.  United  States  Mut.  Ace.  Ass'n,  16  N.  Y.  Supp.  27; 
American  Ace.  Ins.  Co.  v.  Norment,  91  Tenn.  1;  ante,  "Denial." 

"^  Order  of  Chosen  Friends  v.  Austerlitz,  75  111.  App.  74;  Young  v. 
Grand  Council,  A.  O.  A.,  63  Minn.  506;  Supreme  Council,  C.  B.  L.,  v. 
Boyle,  10  Ind.  App.  301. 

"« Supreme  Lodge  v.  Goldberger,  72  111.  App.  320. 


CHAPTER  XV. 

ARBITRATION    AND    AWARD. 

§  206.  Validity  of  Stipulations  for  Arbitration. 
207-210.  The  Effect  of  such  Stipulations. 

211.  When  Stipulations  for  Arbitration  Become  Operative. 

212.  Submission. 

213.  Selection  of  Arbitrators  and  Umpire. 

214.  Conducting  Appraisal. 

215.  Failure  of  Arbitrators  to  Agree. 

216.  Who  Bound  by  Award. 

217.  Validity  and  Effect  of  Award. 

218.  Setting  Aside  Award. 

219-220.  Effect  of  Demanding  or  Participating  in  an  Award. 
221-222.  Waiver  of  Right  to  Arbitration. 
223.  Denying  Liability  in  Pleading. 

Validity  of  Stipulations  for  Arbitration". 

§  206.  A  provision  in  an  insurance  policy  requiring  an  arbi- 
tration and  award  on  the  general  question  of  the  liability  of 
the  insurer  is  invalid  because  it  is  an  attempt  to  oust  the  courts 
of  their  proper  jurisdiction. 

A  provision  for  a  fair  and  impartial  arbitration  and  award  on 
special  matters  such  as  the  amount  of  damage  in  case  of  fire  or 
loss  is  valid  and  binding. 

Provisions  in  the  constitution  and  by-laws  of  mutual  benefit 
societies  requiring  all  questions  concerning  the  liability  of  the 
society  to  its  members  to  be  decided  and  determined  by  the 
tribunals  of  the  order  are  sustained  in  some  jurisdictions. 

Very  many  fire  insurance  policies  contain  provisions  to  the 
effect  that  if  in  case  of  damage  or  loss  to  the  property  insured, 
the  insurer  and  insured  are  unable  to  agree  as  to  the  amount 
of  damage  or  loss,  the  same  shall  either  absolutely  or  condi- 
tionally be  referred  to  three  disinterested  persons  selected, 


§  206  VALIDITY    OF    STIPULATIONS    FOR    ARBITRATION.  609 

one  by  the  insurer,  one  by  the  insured  and  the  other  by  the 
two  so  chosen,  and  that  the  award  of  these  three  or  any  two  of 
them  shall  be  conclusive  as  to  the  amount  of  loss  or  damage. 
Such  stipulations  are,  in  the  absence  of  statutory  provisions 
to  the  contrary,  reasonable  and  valid ;  but  so  far  they  consti- 
tute only  an  agreement  to  refer.  This  is  merely  a  collateral 
and  independent  agreement,  a  breach  of  which,  while  it  will 
support  a  separate  action,  does  not  constitute  a  bar  to  an  action 
on  the  policy.  When,  however,  the  contract  makes  the  sub- 
mission to  arbitration  a  condition  precedent  to  the  right  of 
the  insured  to  bring  a  suit,  a  different  question  is  presented. 
It  has  been  argued  with  much  force  and  ingenuity  that  such 
stipulations  are  void,  as  an  attempt  to  oust  the  courts  of  their 
proper  jurisdiction  and  powers.  But  the  great  weight  of  ju- 
dicial authority  supports  the  validity  of  such  prc^visions ;  and 
this  upon  the  ground  that  they  do  not  oust  tlie  jurisdiction  of 
the  courts,  but  leave  the  general  question  of  liability  to  be 
judicially  determined,  and  simply  provide  a  plain  and  reason- 
able method  of  estimating  and  ascertaining  the  amount  of 
loss.^ 

'  Hamilton  v.  Livei-pool  &  L.  &  G.  Ins.  Co.,  136  U.  S.  242,  10  Sup.  Ct. 
945;  Reed  v.  Washington  F.  &  M.  Ins.  Co.,  138  Mass.  572;  Kahnweiler 
V.  Phoenix  Ins.  Co.,  57  Fed.  562;  Adams  v.  South  British  &  Nat.  F.  & 
M.  Ins.  Co.,  70  Cal.  198;  Caledonian  Ins.  Co.  v.  Traub,  83  Md.  524.  35 
Atl.  13;  Gasser  v.  Sun  Fire  Office,  42  Minn.  315;  Mosness  v.  German 
American  Ins.  Co.,  50  Minn.  341;  Lesure  Lumber  Co.  v.  Mutual  Fire 
Ins.  Co.,  101  Iowa,  514,  70  N.  W.  761;  Zalesky  v.  Home  Ins.  Co.,  102 
Iowa,  613,  71  N.  W.  566;  Van  Poucke  v.  Netherland  St.  V.  de  P.  Soc, 
63  Mich.  378,  29  N.  W.  863;  Russell  v.  North  American  Ben.  Ass'n, 
116  Mich.  699,  75  N.  W.  137;  Campbell  v.  American  Popular  Life  Ins. 
Co.,  2  Bigelow,  Life  &  Ace.  Cas.  16;  Chippewa  Lumber  Co.  v.  Phenix 
Ins.  Co.,  80  Mich.  116;  Raymond  v.  Farmers'  Mut.  Fire  Ins.  Co.,  114 
Mich.  386,  72  N.  W.  254;  Canfield  v.  Greater  Camp,  K.  of  M.,  87  Mich. 
626,  13  L.  R.  A.  625;  Hutchinson  v.  Liverpool  &  L.  &  G.  Ins.  Co..  153 
Mass.  143,  10  L.  R.  A.  558;  Kinney  v.  Baltimore  &  Ohio  Employes' 
Ass'n,  35  W.  Va.  385,  15  L.  R.  A.  142.     In  Pennsylvania,  provisions 

KERR,  INS.— 39 


610  ARBITRATION    AND   AWARD.  §  206 

An  agreement  that  a  right  of  action  should  not  be  enforced 
through  the  ordinary  judicial  tribunals  cannot  be  sustained, 
and  therefore  a  general  covenant  in  a  policy  that  all  claims 
for  damages  shall  be  settled  by  arbitration  would  not  be  a  bar 
to  a  suit  for  damages.  While  parties  may  impose  as  a  condi- 
tion precedent  to  application  to  the  courts  that  they  shall  first 
have  settled  the  amount  to  be  recovered  by  an  agreed  mode, 
they  cannot  entirely  close  the  access  to  the  courts  of  law.  A 
provision  in  a  contract  to  refer  any  specific  matter  of  differ- 
ence which  might  arise  under  it,  is  no  defense  if  it  is  merely 
collateral  to  the  principal  obligation.  These  provisions  are  en- 
tirely distinct  from  covenants  providing  for  the  adjustment  of 
certain  differences,  or  the  estimate  and  determination  of 
amounts  or  values,  as  preliminary  to  the  right  of  recovery. 
In  such  case,  the  parties,  by  the  same  agreement  which  creates 
the  liability  and  gives  the  right,  qualify  it  by  providing  that 
before  a  right  of  action  shall  accrue,  certain  facts  shall  be 
determined  or  amounts  and  values  be  ascertained,  and  thus 
create  valid  conditions  precedent'  either  in  terms  or  by  neces- 
sary implication.  AFr.  Leake  states  the  results  of  the  English 
cases  as  follows:  "A  reference  to  arbitration  of  differences 
arising  upon  a  contract  *  *  *  may  be  agreed  upon  in 
the  contract  as  a  condition  precedent  to  the  existence  of  any 
claim  or  liability;"  and  the  American  courts  uphold  this  doc- 
trine.^ 


are  held  to  be  merely  executory  and  not  enforceable,  though  valid 
if  executed.  Mutual  Fire  Ins.  Co.  v.  Rupp,  29  Pa.  St.  528;  Penn  Plate 
Glass  Co.  V.  Spring  Garden  Ins.  Co.,  189  Pa.  St.  255. 

^  Leake,  Contracts,  953-955;  Delaware  &  H.  Canal  Co.  v.  Pennsyl- 
vania Coal  Co.,  50  N.  Y.  266';  Chippewa  Lumber  Co.  v.  Phenix  Ins. 
Co.,  80  Mich.  116;  Stephenson  v.  Piscataqua  F.  &  M.  Ins.  Co.,  54 
Me.  55;  Prader  v.  National  Masonic  Ace.  Ass'n,  95  Iowa,  149,  63 
N.  W.  601;  Randall  v.  American  Fire  Ins.  Co.,  10  Mont.  340,  24  Am. 
St.  Rep.  50;    Niagara  Fire   Ins.  Co.  v.  Bishop,  154    111,  9,  45  Am.  St. 


§  2l)6  VALIDITY    OF    STIPULATIO^'S    FOE   AKBITBATION.  611 

Mutual  Societies. 

There  has  been  much  dispute  over  the  right  of  mutual  or- 
ganizations to  provide  in  their  constitution  aiid  by-laws  for 
arbitration  tribunals  which  should  decide  all  questions  in  dis- 
pute between  the  members  and  the  societies.  In  Yan  Poucko 
V.  Netherland  St.  Vincent  De  Paul  Soc.,^  the  bv-laws  in  ques- 
tion provided  for  the  appointment  of  a  committee  of  six  mem- 
bers called  the  "sick  committee/'  Avhose  duty  it  should  be 
to  investigate  and  determine  whether  a  member  was  entitled 
to  the  benefits  on  account  of  sickness,  and  that  the  decision  of 
this  committee  should  be  final  and  conclusive.  The  court 
said:  "This  was  a  mutual  benefit  co-operative  insurance  so- 
ciety. The  members  stood  upon  an  equal  footing  and  this 
by-law  operates  upon  all  alike.  It  is  reasonable  that  the  sick 
committee  should  be  invested  with  authority  to  determine 
^vhether  a  member  claiming  to  be  sick  is  entitled  to  the  benefit 
provided  for  in  the  by-law,  and  also  when  such  benefit  should 
<?ease.  In  a  society  comprising  a  numerous  membership,  de- 
riving its  revenues  from  small  monthly  contributions,  it  is  of 
the  utmost  importance  that  its  business  should  be  carried  on 
inexpensively  and  with  a  proper  regard  to  the  object  sought  to 
be  accomplished.  It  is  necessary  tliat  tliere  should  bo  some 
mode  of  determining  the  question  of  when  relief  should  be 
given  and  denied,  and  the  method  provided  in  the  by-law 
seems  well  adapted  to  the  circumstances  and  needs  of  such  a 
society.  There  is  nothing  oppressive  in  the  terms  of  the  by- 
law and  it  contains  nothing  which  the  policy  of  the  law  for- 
bids. If  it  is  enforced  in  good  faith  and  with  impartiality, 
which  the  members  pledge  themselves  to  do,  it  must  result  in 
benefit  to  sick  members  and  at  the  same  time  protect  the 

Rep.  105;  Supreme  Council,  0.  C.  F.,  v.  Forsinger,  125  Ind.  52,  9  L. 
R.  A.  502;  Hutchinson  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  153  Mass.  143, 
10  L.  R.  A.  558. 

» 63  Mich.  378,  29  N.  W.  863. 


612  ARBITRATION    AND   AWARD.  §  20^ 

funds  of  the  society  from  depletion  by  tlie  undeserving.'^ 
And  in  a  later  case  the  same  court  held  a  similar  by-law  valid, 
saying:  "This  is  not  a  case  of  an  attempted  exclusion  of 
remedy  by  the  legislature ;  but  a  case  where  the  parties  have 
agreed  that  onlv  on  certain  terms  and  under  certain  conditions 
shall  a  member  be  entitled  to  receive  any  benefits,  or  the 
beneficiary  named  be  entitled  to  receive  any  sum  in  case  of 
the  death  of  the  member."^ 

But  the  supreme  court  of  Utah  in  passing  upon  a  similar 
stipulation  said  the  agreements  between  the  society  and  the 
members  are  "valid  and  binding  so  long  as  they  are  not  in 
contravention  of  the  law  of  the  land  or  of  public  policy.  *  * 
Provisions  attempting  to  create  a  tribunal  having  the  power 
to  adjudicate  upon  all  the  property  rights  of  members  or  bene- 
ficiaries arising  by  virtue  of  membership  in  the  order,  *  '^ 
have  no  more  effect  than  a  revocable  agTeement  to  submit  to 
an  award ;  because  otherwise  the  attempt  would  be  to  usurp 
the  functions  of  the  sovereign  power,  for  it  alone  can  create 
judicial  tribunals."^ 

As  to  the  effect  of  these  provisions,  restricting  the  right  of 
the  member  or  beneficiary  to  resort  primarily  to  the  courts 
for  relief,  there  are  three  rules  laid  down:  (1)  The  Michigan 
rule,  holding  such  stipulations  valid,  and  that  they  do  not  so 
far  contravene  public  policy  as  to  permit  parties  who  contract 
with  reference  to  them  to  seek  relief  in  the  courts  rather  than 
in  the  tribunals  of  the  order.®  (2)  The  Indiana  rule,  which 
holds  that  such  provisions  are  valid  to  the  extent  that  they 
create  a  condition  precedent  with  which  the  claimant  must 

♦Henbeau  v.  Great  Camp,  K.  of  M.,  101  Mich.  161,  59  N.  W.  417: 
Raymond  v.  Farmers'  Mut.  Fire  Ins.  Co.,  114  Mich.  386,  72  N.  W.  255. 

=  Daniher  v.  Grand  Lodge,  A.  O.  U.  W.,  10  Utah,  110,  37  Pac.  245. 

'See  ante,  note  4;  Canfield  v.  Great  Camp,  K.  of  M.,  87  Mich.  626. 
13  L.  R.  A.  625;  Robinson  v.  Templar  Lodge,  117  Cal.  370,  49  Pac. 
170;  Supreme  Lodge,  O.  S.  F.,  v.  Dey,  58  Kan.  283,  49  Pac.  74. 


§§  207-210  EFFECT    OF    SUCH    STIPULATIONS.  613 

comply,  but  that  the  decision  of  the  tribunal  provided  for  in 
the  contract  is  not  binding  or  conclusive,  and  that  the  claimant 
after  exhausting  the  remedies  provided  for  in  his  contract 
may  thereafter  invoke  the  aid  of  the  courts  J  (3)  The  Utah 
rule,  which  holds  such  provisions  are  absolutely  void,  and 
that  the  claimant  may  absolutely  disregard  them  and  pro- 
ceed directly  to  ask  relief  in  the  courts.^ 

Effect  of  Such  Stipulations. 

§  207.  Whether  or  not  a  submission  to  arbitration  or  a  refer- 
ence is  a  condition  precedent  to  the  maturing  of  a  right  to 
bring  suit  depends  upon  the  wording  of  the  policy. 

g  208.  A  mere  agreement  to  refer  or  to  ascertain  the  amount 
of  a  loss  by  arbitration  does  not  create  a  condition  precedent. 

45  209.  Where  arbitration  is  made  a  condition  precedent  to  a 
right  of  action,  the  insured  must  do  all  in  his  power  to  bring 
about  an  arbitration  according  to  the  provisions  of  the  policy; 
otherwise  he  cannot  recover  in  the  absence  of  a  waiver  of  the 
condition  by  the  insurer. 

§  210.  Arbitration  is  unnecessary  in  case  of  total  loss  under 
a  valued  policy. 

Eeference  must  be  had  to  the  whole  of  the  conditions  of  the 
policy  in  order  to  determine  whether  or  not  the  agreement  to 
refer  is  an  independent  and  collateral  agreement,  or  whether 
it  is  an  essential  part  of  the  contract  to  pay  the  loss  and  a 
condition  precedent  to  plaintiff's  right  of  action.  Stipula- 
tions for  arbitration  or  agreements  to  ascertain  the  amount 
of  damage  or  loss  by  arbitration  will  not  deprive  the  insured 
of  his  right  of  action  on  the  policy  or  postpone  such  right  imtil 
after  a  submission  and  award,  unless  they  are  clearly  made 
conditions  precedent  to  the  existence  of  such  right.     The 

'Supreme  Council,  O.  C.  F.,  v.  Forsinger,  125  Ind.  52,  9  L.  R.  A. 
501. 

'Daniher  v.  Grand  Lodge,  A.  O.  U.  W.,  10  Utah,  110,  37  Pac.  245; 
Whitney  -.  National  Masonic  Ace.  Ass'n,  57  Minn.  472;  Bacon,  Ben. 
Soc.  §§  123,  450;  Crossley  v.  Connecticut  Fire  Ins.  Co.,  27  Fed.  30. 


614  AKBITKATIOX    AND    AWARD.  §§  207-210 

meaning  and  intent  of  tlie  parties  must  be  ascertained  from 
the  language  they  have  used ;  and  if  the  meaning  of  the  par- 
ties is  that  the  sum  to  be  recovered  should  be  only  such  sum 
as,  if  not  agreed  upon  in  the  first  instance,  should  be  decided 
by  arbitration,  and  that  the  sum  so  ascertained  and  no  other 
shall  be  recovered,  the  circumstances  that  the  parties  have 
not  stated  that  meaning  in  the  most  artistic  fomi  is  unim- 
portant.^ 

There  are  two  cases  in  which  a  submission  is  made  a  condi- 
tion precedent  to  a  right  of  action:  (1)  where  the  action 
can  only  be  brought  for  the  sum  fixed  by  the  arbitrators,  (2) 
where  arbitration  is  made  a  condition  precedent  by  the  express 
terms  of  the  contract  or  by  necessary  inference  therefrom. 
In  all  other  cases  where  there  is  first  a  covenant  to  pay,  and 
secondly  a  covenant  to  refer,  the  covenants  are  distinct  and 
collateral  and  the  plaintiff  may  bring  suit  on  the  first,  leaving 
tlie  defendant  to  bring  Un  action  for  not  referring. -^^ 

But  the  courts  must  interpret  and  give  effect  to  contracts 
according  to  the  clear  intent  of  the  parties  as  expressed 
therein,  and  where  it  is  manifestly  the  intention  of  the  par- 
ties that  until  an  award  shall  have  been  obtained  a  loss  shall 
not  be  payable,  an  insured  must  comply  with  the  terms  of 
the  contract  and  perform  all  the  conditions  by  him  to  be 
performed,  or  show  legal  excuse  for  his  failure  so  to  do  or  a 
waiver  of  non-compliance  by  the  insurer.     Where  the  parties? 

'Chapman  v.  Rockford  Ins.  Co.,  89  Wis.  572,  62  N.  W.  422;  Gasser 
V.  Sun  Fire  Office,  42  Minn.  315;  Lesure  Lumber  Co.  v.  Mutual  Fire 
Ins.  Co.,  101  Iowa,  514,  70  N.  W.  761;  Canfield  v.  Watertown  Fire 
Ins.  Co.,  55  Wis.  419;  Lamson  C.  Store-Service  Co.  v.  Prudential  Fire 
Ins.  Co.,  171  Mass..  433,  50  N.  E.  943;  Birmingham  Fire  Ins.  Co.  v. 
Pulver,  126  111.  329,  9  Am.  St.  Rep.  598;  Hamilton  v.  Home  Ins.  Co., 
137  U.  S.  370;  Case  v.  Manufacturers'  F.  &  M.  Ins.  Co.,  82  Cal.  263; 
Supreme  Lodge.  0.  S.  F.,  v.  Dey,  58  Kan.  293,  49  Pac.  74;  Mutual  Fire 
Ins.  Co.  V.  Alvord  (C.  C.  A.),  61  Fed.  752. 

"Hamilton  v.  Home  Ins.  Co.,  137  U.  S.  383;  Hamilton  v.  Liverpool, 


§§  207-210  EFFEOT   OF    SUCH    STirULATIOKS.  615 

in  their  contract  fix  upon  a  certain  mode  by  "wliicli  the  amount 
to  be  paid  shall  be  ascertained,  the  party  that  seeks  an  en- 
forcement of  the  agi'eement  must  show  that  he  has  done  every- 
thing on  his  pai't  which  could  be  done  to  carry  it  into  effect. 
He  cannot  compel  the  payment  of  the  amount  claimed  unless 
he  shall  procure  the  kind  of  e-^ddence  required  by  the  contract 
or  show  that  by  time  or  accident  he  is  unable  to  do  so.^^ 

Stipulations  Creating  a  Condition  Precedent  — Illustrations. 

A  provision  "that  no  suit  or  action  shall  be  sustainable  until 
after  an  award  shall  have  been  obtained  fixing  the  amount 
of  such  claim  as  herein  provided"  makes  the  obtaining  of  an 
award  a  condition  precedent.^^  Likewise  a  provision  for 
arbitration  and  award  in  case  of  dispute  as  to  the  amount  of 
the  loss  with  the  further  provision  that  the  amount  of  loss 
shall  not  be  payable  "until  after  notice,  etc.,  including  an 
award  by  the  appraisers  when  an  appraisal  has  been  re- 
quired." Under  such  policy,  an  appraisal  is  "required"  when 
insurer  and  insured  disagree  about  the  amount  of  the  loss.  ''^ 

L.  &  G.  Ins.  Co.,  136  U.  S.  255;  Read  v.  State  Ins.  Co.,  103  Iowa,  307, 
72  N.  W.  667. 

"Hamilton  v.  Liverpool,  L.  &  G.  Ins.  Co.,  136  U.  S.  255;  Chippewa 
Lumber  Co.  v.  Phenix  Ins.  Co.,  80  Mich.  116. 

"Hamilton  v.  Liverpool,  L.  &  G.  Ins.  Co.,  136  U.  S.  255;  Gasser  v. 
Sun  fire  Office,  42  Minn.  315;  Chapman  v.  Rockford  Ins.  Co.,  89  Wis. 
572,  62  N.  W.  422;  George  Dee  &  Sons  Co.  v.  Key  City  Fire  Ins.  Co., 
104  Iowa,  167,  73  N.  W.  594. 

"Mosness  v.  German-American  Ins.  Co.,  50  Minn.  341.  In  this 
case  it  was  held  that  a  complaint  which  showed  a  disagreement  as 
to  the  amount  of  damage  did  not  state  a  cause  of  action  by  alleging 
generally  that  plaintiff  had  complied  with  all  the  terms  and  condi- 
tions of  the  policy,  and  without  alleging  any  facts  relieving  plaintiff 
from  a  submission,  or  excusing  him  from  being  bound  by  the  pro- 
visions of  the  policy  in  that  particular. 

In  McNees  v.  Southern  Ins.  Co.,  69  Mo.  App.  233,  the  same  doctrine 
was  announced;  and  the  court  held,  further,  that  either  insurer  or 
assured  had  the  right  to  act  in  the  matter  of  obtaining  an  appraise- 
ment, and  that,  if  the  insurer  fails  to  demand  an  arbitration,  he  can- 


616  AKBITKATION    AND    AWAKD.  §§  207-210 

And  a  stipulation  in  a  life  insurance  policy  that  the  company 
"would  pay  the  face  of  the  policy  only  ''if  in  the  opinion  of 
the  surgeon-in-chief  of  this  company  the  insured  did  not  die 
of  intemperance/'  and  requiring  the  production  of  the  decision 
of  the  surgeon  as  to  the  cause  of  death,  is  valid ;  and  the  party 
seeking  to  recover  must  show  the  decision  of  the  surgeon  that 
death  did  not  result  from  the  excepted  cause,  or  show  sufficient 
excuse  for  its  non-production.-^^ 

So  a  condition  precedent  is  created  by  a  provision  that  in 
case  of  difference  of  opinion  as  to  the  amount  of  compensa- 
tion payable  under  a  policy,  the  question  should  be  referred 
to  the  arbitration  of  a  person  to  be  named  by  the  secretary 
for  the  time  being  of  the  Master  of  the  Rolls,  and  that  the 
award  made  on  such  arbitration  should  be  taken  as  a  final 
settlement  of  the  question  and  might  be  made  a  rule  of  court  ;^^ 
and  by  a  provision  that  in  case  of  disagreement  the  amount 
of  damage  should  be  ascertained  by  appraisers,  and  when  so 
ascertained  and  proofs  of  loss  made,  the  same  shall  be  pay- 
able sixty  days  after  receipt  of  such  proof,  where  proof  of  loss 
must  contain  the  appraisal.  ^^  And  by  a  provision  that,  in 
case  of  difference  of  opinion  as  to  amount  of  loss  or  damage, 
such  difference  shall  be  submitted  to  the  judgment  of  two  dis- 
interested and  competent  men  mutually  chosen  (who  in  case 

not  complain  of  the  delay  of  the  insured  in  making  demand  there- 
for, unless  the  delay  be  so  great  as  to  make  an  arbitration  impos- 
sible or  so  impracticable  as  to  defeat  its  object.  See,  also,  Carroll 
V.  Girard  Fire  Ins.  Co.,  72  Cal.  297;  Kahnweiler  v.  Phoenix  Ins.  Co., 
57  Fed.  562;  American  Fire  Ins.  Co.  v.  Stuart  (Tex.  Civ.  App.),  38 
S.  W.  395;  Schrepfer  v.  Rockford  Ins.  Co.,  77  Minn.  291,  79  N.  W. 
1005. 

"  Campbell  v.  American  Popular  Life  Ins.  Co.,  2  Bigelow,  Life  & 
Ace.  Cas.  16,  1  MacArthur,  D.  C.  471;  Raymond  v.  Farmers'  Mut. 
Ins.  Co.,  114  Mich.  386,  72  N.  W.  255. 

"  Braunstein  v.  Accidental  Death  Ins.  Co.,  1  Best  &  S.  783. 

"  Langan  v.  Aetna  Ins.  Co.,  96  Fed.  705. 


§§  207-210  EFFECT    OF    SUCH    STIPULATIONS. 


Gl' 


of  disagreement  should  select  a  third),  whoso  award  should 
be  conclusive  on  the  parties. ^'^ 

And  it  has  been  held  that  the  tribunals  of  a  mutual  benefit 
society  to  which  the  claimants  are  required  by  their  contract 
to  submit  their  claims  must  be  apjdied  to  before  legal  redress 
is  sought,  even  though  the  provisions  making  the  decision  of 
such  tribunals  conclusive  are  contrary  to  pul)lic  policy  and 
therefore  void.^*  Where  the  policy  makes  an  arbitration  a 
condition  precedent  only  when  demanded,  the  condition  does 
not  become  operative  until  a  demand  is  made.^^ 

IV^hen  First  Award  is  Set  Aside. 

If  an  award  is  set  aside  for  any  cause  not  contributed  to  or 
participated  in  by  either  party,  the  agreements  of  the  policy 
respecting  arbitration  still  remain  in  force,  and  a  new  ap- 
praisement, unless  it  has  become  impossible  or  has  been 
-waived,  must  be  had  if  an  award  be  a  condition  precedent  to  a 
right  of  action. ^"^ 

Stipulations  Not  Making  an  Award  a  Condition  Precedent  to 
the  Right  to  Sue. 

A  stipulation  in  a  policy  of  insurance  providing  that  in 
<;aso  of  dift'erence  of  opinion  as  to  the  amount  of  the  loss  or 
damage  there  should  be  a  reference  of  the  same  to  arbitration, 
does  not  bar  the  assured  of  his  right  to  an  action  without  such 
reference,  unless  the  stipulation  clearly  shows  that  it  is  a 

"  Old  Saucelito  L.  &  D.  Dock  Co.  v.  Commercial  Union  Assur.  Co., 
66  Cal.  253;  Carroll  v.  Girard  Fire  Ins.  Co.,  72  Cal.  297;  Gauche  v. 
London  &  L.  Ins.  Co.,  4  Woods  (U.  S.),  102,  10  Fed.  347. 

'*  See  ante,  note  6. 

-"  Read  v.  State  Ins.  Co.,  103  Iowa,  307,  72  N.  W.  667;  Levine  v.  Lan- 
cashire Ins.  Co.,  66  Minn.  149;    Carroll  v.  Girard  Fire    Ins.  Co.,  72 

"  Zalesky  v.  Home  Ins.  Co.,  102  Iowa,  613,  71  N.  W.  566.  See  post, 
"'Demand  for  Appraisal." 

Cal.  297.    As  to  procedure  when  an  umpire  is  not  selected,  see  post, 
■"Failure  to  Agree." 


618  AKBITKATION    AND    AWAKD.  §§  207-21O 

condition  precedent  to  liis  right  to  resort  to  tlie  courts,  or 
clearly  makes  such  suhmission  the  only  mode  by  Avhich  the 
amount  of  damage  is  to  be  ascertained  or  by  which  the  lia- 
bility of  the  insurer  can  be  fixed.  Either  of  these  two  latter 
provisions  would  at  least  be  equivalent  to  making  a  condition 
precedent  to  be  performed  before  suit.  Even  then  the  action 
of  the  insurer  may  be  such  as  to  amount  to  a  waiver  of  the 
stipulation  or  to  estop  it  from  setting  the  stipulation  up  as  a 
defense.^^  The  refusal  of  the  insured  to  submit  to  an  award 
doe-^  not  bar  his  right  to  suit  under  a  clause  providing  only 
"that  in  case  differences  shall  arise  touching  any  loss  or  dam- 
age *  *  *  the  matter  shall  at  the  written  request  of 
either  party  be  submitted  to  impartial  arbitrators,  whose 
award  in  writing  shall  be  binding  on  the  parties  as  to  the 
amount  of  such  loss  or  damage,  but  shall  not  decide  the  lia- 
bility of  the  company  under  this  policy."  ^^ 

A  stipulation  providing  for  arbitration  will  not  be  held  to 
create  a  condition  precedent  to  a  right  of  action  by  the  insured 
unless  it  be  definite  and  certain  as  to  the  time  and  manner 
of  the  submission,  the  number  of  arbitrators,  the  mode  of 
their  selection  and  their  duties,  powers  and  rights.  ^^  Thus  a 
policy  which  in  terms  requires  a  submission  and  appraisal, 
in  case  of  the  failure  of  the  parties  to  agree,  by  disinterested 
appraisers  mutually  agreed  upon,  and  providing  that  the  re- 
turn of  the  award  by  the  arbitrators  so  chosen  should  be  a 

='  Liverpool,  L.  &  G.  Ins.  Co.  v.  Creighton,  51  Ga.  95. 

''  Hamilton  v.  Home  Ins.  Co..  137  U.  S.  370,  11  Sup.  Ct.  133.  For  a 
like  holding  under  similar  provisions,  see  Gere  v.  Council  Bluffs  Ins. 
Co.,  67  Iowa,  272,  23  N.  W.  137;  Scott  v.  Phoenix  Assur.  Co.,  1  Ben- 
nett, Fire  Ins.  Cas.  118;  Canfield  v.  Watertown  Fire  Ins.  Co.,  55  Wis, 
419,  13  N.  W.  252;  Case  v.  Manufacturers'  F.  &  M.  Ins.  Co.,  82  Cal. 
263;  Birmingham  Fire  Ins.  Co.  v.  Pulver,  126  111.  329;  Reed  v.  Wash- 
ington F.  &  M.  Ins.  Co.,  138  Mass.  576;  Seward  v.  City  of  Rochester, 
109  N.  Y.  167;  Chippewa  Lumber  Co.  v.  Phenix  Ins.  Co.,  80  Mich.  116. 

=3  Greiss  v.  State  Inv.  &  Ins.  Co.,  98  Cal.  241,  33  Pac.  195. 


§§  207-210  EFFECT    OF    SUCH    STirULATIONS.  61& 

prerequisite  to  any  right  of  action  on  the  policy,  are  so  in- 
definite and  uncertain  both  as  to  the  number  of  arbitrators 
and  the  mode  of  their  selection,  that  they  are  inoperative 
where  no  arbitrators  are  agreed  upon."''  A  beneficiary  in  a 
certificate  issued  by  a  mutual  benefit  society  may  maintain 
an  action  in  the  courts  on  his  certificate  after  an  adverse  de- 
cision by  an  officer  of  the  order  to  whom  he  was  required  first 
to  present  his  claim  without  appealing  to  other  tribunals  of 
the  order,  although  the  certificate  permits  such  an  appeal.  ^^ 
Nor  is  a  condition  precedent  created  by  a  stipulation  that  pay- 
ment should  be  made  within  sixty  days  after  proofs  were  fur- 
nished, and  "in  case  any  difference  of  opinion  shall  arise  as  to 
the  amount  of  loss  under  this  policy  it  is  mutually  agreed  that 
the  said  loss  shall  be  referred  to  three  disinterested  men, 
*  *  *  and  the  decision  of  a  majority  of  such  referees 
in  writing  shall  be  final  and  binding  on  the  parties.""'^ 

A  provision  that  if  differences  arise  as  to  the  amount  of 
loss  or  damage  they  shall  be  submitted  to  arbitration,  and 
that  no  action  shall  be  brought  until  after  an  aAvard  shall  bo 
obtained  if  either  party  make  a  written  request  for  arbitration, 
does  not  preclude  a  bringing  of  suit  unless  the  insurer  has 
made  a  written  request  for  arbitration.  The  right  to  de- 
mand an  arbitration  being  optional  with  either  party  and 
neither  having  availed  himself  of  the  right,  it  will  be  deemed 
w^aived  by  both  and  the  insured  left  to  his  usual  legal  re- 
dress. ^^    This  is  also  the  construction  given  to 'the  Michigan 

"Aetna  Ins.  Co.  v.  McLead,  57  Kan.  95,  45  Pac.  73,  25  Ins.  Law  J. 
669;  Case  v.  Manufacturers'  F.  &  M.  Ins.  Co.,  82  Cal.  263;  Mark  v. 
National  Fire  Ins.  Co.,  24  Hun,  565,  91  N.  Y.  663;  Williams  v.  Hart- 
ford Ins.  Co.,  54  Cal.  442. 

==  Supreme  Lodge,  O.  S.  F.,  v.  Dey,  58  Kan.  283,  49  Pac.  74;  Bauer 
V.  Samson  Lodge,  K.  of  P.,  102  Ind.  262. 

'"Crossley  v.  Connecticut  Fire  Ins.  Co.,  27  Fed.  30. 

=■  Capitol  Ins.  Co.  v.  Wallace,  48  Kan.  400,  29  Pac.  755;  Germania 
Fire  Ins.  Co.  v.  Frazier,  22  111.  App.  327;  German-American  Ins.  Co. 


G20  ARBITRATION    AND    AWARD.  §§  207-210 

standard  policy  wliicli  provides  that  in  case  of  disagreement 
tlie  amount  of  loss  shall  be  ascertained  by  appraisers,  that 
the  loss  shall  not  be  payable  until  satisfactory  proofs  have 
been  received  including  an  award  by  the  appraisers  when  an 
appraisal  has  been  required,  and  that  no  action  on  the  policy 
shall  be  maintained  until  compliance  by  the  assured  with  all 
such  requirements.^^  A  provision  that  the  rights  and  obliga- 
tions of  the  parties  to  the  policy  shall  be  determined  by  the 
arbitrators,  and  that  no  action  shall  be  maintained  upon  the 
contract  without  arbitration,  does  not  bar  an  action  without  a 
reference,  where  the  contract  clearly  fixes  a  certain  and  defi- 
nite amount  to  be  paid  by  the  insurer. ^^ 

Total  Loss. 

In  the  absence  of  any  provisions  to  the  contrary,  the  stipu- 
lations of  an  open  policy  requiring  the  appointment  of  ap- 
praisers to  detennine  the  amount  of  loss  or  damage  and 
making  an  award  a  condition  precedent  to  bringing  suit,  apply 
to  all  losses,  total  as  well  as  partial.'^*^  But  under  the  pro- 
%isions  of  a  valued  policy,  Avhether  so  dra^\Ti  with  or  without 
statutory  compulsion,  the  actual  value  of  the  property  de- 
stroyed and  the  actual  damage  to  the  insured  in  case  of  total 
destruction  of  the  property  insured  are  wholly  immaterial; 
because  the  amount  of  insurance  written  in  the  policy  fixes 
conclusively  the  amount  of  the  loss  and  the  absolute  measure 
of  recovery.  .The  sul>mission  to  arbitration  in  such  a  case 
does  not  operate  to  limit  the  recovery  on  the  policy  to  the 

v.  Steiger,  109  111.  254;  Niirney  v.  Fireman's  Fund  Ins.  Co.,  63  Mich. 
633.  30  N.  W.  350. 

=' Brock  V.  Dwelling  House  Ins.  Co.,  102  Mich.  583,  61  N.  W.  67; 
Lesure  Lumber  Co.  v.  Mutual  Fire  Ins.  Co.,  101  Iowa,  514,  70  N.  W. 
761. 

^*  Whitney  v.  National  Masonic  Ace.  Ass'n.  52  Minn.  378. 

'"Gasser  v.  Sun  Fire  Office,  42  Minn.  315;  Chippewa  Lumber  Co.  v. 


-^§  207-210  EFFECT    OF    SLXII    STIPULATIONS. 


621 


amount  awarded  by  the  arbitrators.^^  An  agreement  for  ar- 
bitration as  to  the  amount  of  loss  has  no  effect  when  the  policy 
containing  it  was  issued  after  the  enactment  of  a  law  making 
the  amount  stated  in  the  policy  conclusive  as  to  the  amount 
of  liability  of  the  insurer  in  case  of  total  loss.^^  j^  Missouri, 
in  case  of  total  loss  of  the  property  insured,  the  statute  makes 
the  insurer  liable  for  the  face  of  the  policy  less  any  deprecia- 
tion of  value  after  the  issuance  of  the  policy,  and  appraisers 
can  determine  only  the  amount  of  depreciation.^^  A  pro- 
vision for  arbitration  in  a  policy  covering  both  house  and 
personal  property  is  not  applicable  when  the  house  is  totally 
destroyed  where  the  statute  of  the  forum  makes  the  claim  for 
insurance  on  the  house  a  liquidated  demand.'^^  Loss  arising 
from  a  total  destniction  of  property  insured  is  not  included 
within  a  provision  in  a  policy  providing  for  arbitration  only 
in  case  the  property  is  "damaged  by  fire."'"^^  But  arbitra- 
tion is  sometimes  necessary  even  in  case  of  total  loss  under 

Phenix  Ins.  Co.,  80  Mich.  116,  44  N.  W.  1055.  See,  also,  Rosenwald 
V.  Phcenix  Ins.  Co.,  50  Hun  (N.  Y.),  172. 

'"■  Oshkosh  Gas  Light  Co.  v.  Germania  Fire  Ins.  Co.,  71  Wis.  454,  37 
N.  W.  819;  Queen  Ins.  Co.  v.  Leslie,  47  Ohio  St.  409,  9  L.  R.  A.  45; 
German  Fire  Ins.  Co.  v.  Eddy,  36  Neb.  461,  54  N.  W.  856,  19  L.  R.  A. 
707;  Seyk  v.  Millers'  Nat.  Ins.  Co.,  74  Wis.  67,  41  N.  W.  443,  3  L.  R. 
A.  523. 

'=Ampleman  v.  Citizens'  Ins.  Co.,  35  Mo.  App.  308;  Thompson  v. 
St.  Louis  Ins.  Co.,  43  Wis.  459.  As  to  what  destruction  of  property 
amounts  to  a  total  loss,  see  O'Keefe  v.  Liverpool  &  L.  &  G.  Ins.  Co.. 
140  Mo.  558,  39  L.  R.  A.  819,  45  Cent.  Law  J.  373;  Trustees  of  St.  Clara 
Female  Academy  v.  Northwestern  Nat.  Ins.  Co.,  98  Wis.  257,  73  N.  W. 
767;  Royal  Ins.  Co.  v.  Mclntyre,  90  Tex.  170.  35  L.  R.  A.  676;  Corbett 
V.  Spring  Garden  Ins.  Co.,  155  N.  Y.  389,  41  L.  R.  A.  318;  Insurance 
Co.  of  North  America  v.  Canada  Sugar-Refining  Co.  (C.  C.  A.),  87 
Fed.  491;  and  ante,  note  31. 

''  Baker  v.  Phoenix  Assur.  Co.,  57  Mo.  App.  559. 

="  Phoenix  Ins.  Co.  v.  Moore  (Tex.  Civ.  App.),  46  S.  W.  1131. 

"Liverpool,  L.  &  G.  Ins.  Co.  v.  Colgin  (Tex.  Civ.  App.),  34  S.  W. 
291. 


€22  ARBITRATION    AND   AWARD.  §  211 

a  valued  policy  where  the  provisions  of  the  policy  with 
reference  to  arbitration  cover  a  case  where  there  is  a  dispute 
as  to  whether  or  not  the  loss  or  destruction  was  total  and  leav- 
ing that  question  to  be  deteiinined  by  arbitration.^^ 

When  Stipulations  for  Arbitration  Become  Operative. 

§  211.  The  stipulations  of  a  policy  may  be  absolute  and  self- 
executing,  or  conditional  and  dependent  upon  the  right  to  take 
advantage  of  them  being  claimed  by  either  insurer  or  insured. 

Stipulations  requiring  a  reference  or  appraisal  absolutely  as 
a  condition  precedent  to  any  right  of  action  by  the  insured  are 
self  executing,  and  become  operative  upon  the  happening  of 
the  event  or  loss  insured  against.^^  The  parties  may  waive 
the  absence  of  a  disagreement  or  other  exigency  which  makes 
a  reference  necessary ;  and  they  may  voluntarily  enter  into  a 
submission  which  will  form  a  basis  of  a  valid  award.  Each 
party  must  discharge  the  duty  required  of  him  before  he  can 
take  advantage  of  a  provision  imposing  a  duty  upon  the  other. 
Where  arbitration  and  award  are  only  necessary  in  case  the 
parties  differ  or  disagree  as  to  the  amount  of  the  loss,  a  dif- 
ference or  disagreement  must  occur  before  a  submission  can 
properly  be  demanded.  If  the  right  to  an  arbitration  and 
award  is  given  conditionally,  as  "when  demanded,"  a  demand 
must  be  made  by  the  one  seeking  the  benefit  of  the  right. 
Such  demand  must  be  made  according  to  the  requirement  of 
the  policy  and  without  unnecessary  delay. 

Appraisal  Without  Disagreement. 

Though  neither  insurer  nor  insured  can  ordinarily  take  ad- 
vantage of  the  arbitration  clause  in  a  policy  until  there  has 
been  an  honest  and  unsuccessful  effort  tx>  agree  on  the  amount 
of  damage,  there  does  not  seem  to  be  any  good  reason  why  they 

'"Yendel  v.  Western  Assur.  Co.,  21  Misc.  Rep.  (N.  Y.)  349. 
"See  preceding  section. 


§  211  WHEN    STIPULATIONS    BECOME    OPERATIVE.  623 

may  not  immediately  after  the  happening  of  a  loss  waive  any 
or  all  of  the  requirements  of  the  policy  respecting  demand 
for  submission  and  the  form  thereof,  and  forthwith  enter 
into  any  agreement  they  choose  looking  towards  a  certain  and 
immediate  determination  of  the  extent  of  the  loss  or  damage. 
And  after  an  insurer  has  joined  in  a  submission  to  appraisers, 
it  will  not  be  heard  to  claim  that  such  submission  was  pre- 
mature because  made  before  the  parties  had  attempted  to 
agree.  ^® 

An  otherwise  valid  award  is  binding  upon  the  insured  as 
well  as  upon  the  insurer  although  a  submission  to  appraisers 
was  not  a  condition  precedent  to  the  commencement  of  an 
action  because  neither  party  made  a  Avritten  demand  there- 
for.^^  An  appraisal  of  the  value  of  property  made  by 
builders  selected  by  the  insured  and  the  adjuster  of  the  com- 
pany is  an  appraisal  within  the  policy,  and  binding  upon  both 
both  parties,  notwithstanding  there  was  no  conference  be- 
tween them  as  to  the  amount  of  the  loss  and  no  effort  made 
to  agree  thereon.'"^ 

What  Constitutes  a  Difference  or  Disagreement. 

The  provisions  of  policies  concerning  the  appointment  of 
appraisers  in  case  of  failure  of  the  parties  to  agree  as  to  the 
amount  of  loss  or  damage  are  "per  se  inoperative,  unless  there 
is  a  real  difference  between  the  parties  as  to  the  amount  of 
the  loss  and  a  failure  to  agree  thereon.  There  is  no  occasion 
for  an  appraisal  until  the  insurer  and   insured   have  met 

»« Bangor  Sav.  Bank  v.  Niagara  Fire  Iris.  Co.,  85  Me.  68,  20  L.  R.  A. 
650;  London.  &  L.  Fire  Ins.  Co.  v.  Stdrrs  (C.  C.  A.),  71  Fed.  120; 
Brock  V.  Dwelling  House  Ins.  Co.,  102  Mich.  583;  Broadway  Ins.  Co. 
V.  Doying,  55  N.  J.  Law,  569. 

'» Harrison  v.  German-American  Fire  Ins.  Co.,  67  Fed.  577;  Spring- 
field F.  &  M.  Ins.  Co.  V.  Payne,  57  Kan.  291,  46  Pac.  315,  26  Ins. 
Law  J.  46. 

«•  London  &  L.  Fire  Ins.  Co.  v.  Storrs  (C.  C.  A.),  71  Fed.  120. 


624r  ARBITRATION    AND   AWARD.  §  211 

and  made  an  honest,  reasonable,  and  ineffectual  attempt 
to  agree  upon  and  settle  the  extent  of  the  damage  between 
themselves.  Until  this  has  been  done,  or  has  been  waived, 
or  is  manifestly  useless  from  the  conduct  and  attitude  of  the 
parties,  no  rights  can  be  gained  by  demanding,  or  loss  by 
failing  to  demand,  an  appraisal.^^ 

A  mere  general  objection  by  the  insurer  to  the  amount 
claimed  by  the  insured  in  his  statement  oi  loss  is  not  such  a 
failure  to  agree  as  makes  a  case  for  arbitration  ;^^  nor  the 
denial  of  liability  by  the  insurer  because  of  the  forfeiture 

*^  Hickerson  v.  German  American  Ins.  Co.,  96  Tenn.  193,  32  L.  R. 
A.  172;  American  Fire  Ins.  Co.  v.  Stuart  (Tex.  Civ.  App.),  38  S.  W. 
395;  Vangindertaelen  v.  Phenix  Ins.  Co.,  82  Wis.  112;  Boyle  v.  Ham- 
burg-Bremen Fire  Ins.  Co.,  169  Pa.  St.  349;  Moyer  v.  Sun  Ins.  Office, 
176  Pa.  St.  579,  35  Atl.  221;  Brock  v.  Dwelling  House  Ins.  Co.,  102 
Mich.  583,  26  L.  R.  A.  623. 

The  Minnesota  standard  policy  provides  that,  "in  case  of  loss 
*  *  *  and  a  failure  of  the  parties  to  agree  as  to  the  amount  of 
loss,  it  is  mutually  agreed  that  the  amount  of  such  loss  shall  be 
referred,"  etc.  Construing  this,  the  supreme  court  of  Minnesota, 
in  Fletcher  v.  German-American  Ins.  Co.,  79  Minn.  337,  82  N.  W. 
648,  said:  "Giving  the  policy  a  broad  and  liberal  construction,  we  in- 
terpret it  to  mean  that,  when  the  parties  are  unable  to  agree  upon 
the  amount  of  the  loss,  the  question  of  such  amount  shall  be  sub- 
mitted to  arbitration.  Until  there  is  some  disagreement  as  to  the 
amount  of  the  loss,  there  is  no  occasion  for  any  arbitration;  there 
is  nothing  to  arbitrate.  In  this  case  the  proof  of  loss  furnished  de- 
fendant specified  the  amount  claimed  by  plaintiff.  Defendant  made 
no  objection  thereto,  and,  after  the  lapse  of  sixty  days,  plaintiff 
brought  this  action.  Defendant,  having  made  no  objection  to  the 
amount  claimed  by  plaintiff,  must  be  taken  to  have  acquiesced 
therein;  at  least,  it  must  be  held  that,  inasmuch  as  no  objection  was 
made  to  the  amount  claimed,  there  was  nothing  to  found  an  arbitra- 
tion upon,  and  none  was  necessary.  This  construction  is  in  harmony 
with  the  objects  and  purposes  of  the  law  and  the  terms  of  the  policy, 
and  w^e  adopt  it  as  the  most  reasonable  and  consistent."  And  see 
Schrepfer  v.  Rockford  Ins.  Co.,  77  Minn.  291,  79  N.  W.  1005. 

"  Hickerson  v.  German  American  Ins.  Co.,  96  Tenn.  193,  32  L.  R. 
A.  172;  Fletcher  v.  German  American  Ins.  Co.,  79  Minn.  337,  82  N.  W. 
C47. 


§  211  WHEN    STIPULATIONS    BECOME    OPERATIVE.  625 

of  the  policy. ^^  But  a  difference  and  disagreement  arise 
where  the  insured  refuses  to  accept  an  offer  made  by  the  in- 
surer in  full  settlement  of  the  amount  of  damages.^^ 

"WTio  Must  Demand  the  Arbitration. 

Where  arbitration  and  award  are  in  case  of  disagreement 
conditions  precedent  to  recovery,  the  insured  must,  if  a  disa- 
gi'eement  occur,  demand  an  arbitration  unless  the  necessity 
therefor  is  waived  by  the  insurer. '^^  Generally  speaking,  un- 
less by  the  terms  of  the  policy  arbitration  is  a  condition  pre- 
cedent to  the  right  to  bring  suit,  an  insurer  which  neglects  to 
or  refuses  to  take  adj-antage  of  the  provision  in  the  policy  look- 
ing towards  arbitration  as  to  the  amount  of  the  loss,  cannot 
complain  if  the  insured  brings  suit  to  compel  payment  without 
arbitration.^*^  Neither  a  demand  for  an  apraisement  made 
by  a  plaintiff  after  the  bringing  of  a  suit,  nor  his  acquiescence 
after  he  has  brought  suit  in  a  demand  for  an  appraisement 
made  by  the  defendant  long  before  suit  was  brought,  is  a  suf- 
ficient compliance  with  the  conditions  of  the  policy  requiring 
an  appraisal  ''if  demanded"  prior  to  the  bringing  of  an  ac- 
tion.^^ 

In  Mosness  v.  German-American  Ins.  Co.,^^  the  supreme 
court  of  Minnesota  held  that  under  a  policy  providing  that  the 

^^  Nelson  v.  Atlanta  Home  Ins.  Co.,  120  N.  C.  302,  27  S.  E.  38. 

"Pioneer  Mfg.  Co.  v.  Phoenix  Assur.  Co.,  106  N.  C.  28;  Murphy  v. 
Northern  British  &  Mercantile  Co.,  61  Mo.  App.  323. 

**  Hutchinson  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  153  Mass.  143,  10  L. 
R.  A.  558;  Mosness  v.  German-American  Ins.  Co.,  50  Minn.  347;  Ham- 
ilton V.  Liverpool  &  L.  &  G.  Ins.  Co.,  136  U.  S.  242,  10  Sup.  Ct.  945; 
McNees  v.  Southern  Ins.  Co.,  69  Mo.  App.  232. 

^Gnau  V.  Masons'  Fraternal  Ace.  Ass'n,  109  Mich.  527,  67  N.  W. 
546;  Germania  Fire  Ins.  Co.  v.  Frazier,  22  111.  App.  327;  Commer- 
cial Ins.  Co.  V.  Robinson,  64  111.  265;  Citizens'  Ins.  Co.  v.  Bland  (Ky.), 
39  S.  W.  825.    See  ante,  "Condition  Precedent." 

"  Zaleslcy  v.  Home  Ins.  Co.,  102  Iowa,  613,  71  N.  W.  566. 

*«50  Minn.  341;  McNees  v.  Southern  Ins.  Co.,  69  Mo.  App.  232. 

KERR,  INS.— 40 


626  ARBITRATION   AND    AWARD.  §  211 

loss  sliall  not  be  payable  until  sixty  days  after  notice  including 
an  award  by  appraisers  "wben  the  appraisal  has  been  re- 
quired," an  appraisal  was  "required"  not  upon  demand,  but 
whenever  the  insurer  and  insured  disagreed  over  the  amount 
of  loss.  The  supreme  court  of  Michigan  arrived  at  a  dif- 
ferent conclusion  in  construing  the  standard  policy  of  that 
state  containing  provisions  almost  identical  with  the  policy 
involved  in  the  Mosness  case.^^  In  Washington  it  is  held 
that  such  a  condition  does  not  require  the  assured  to  demand 
an  appraisal,  but  that  his  refusal  to  submit  to  an  appraisal 
upon  demand  of  the  company  therefor  will  bar  his  right  to 
recovery.^^  If  an  appraisal  is  only  necessary  when  demanded, 
a  demand  must  be  made  before  the  provision  for  appraisal 
becomes  operative.^  ^ 

When  the  Demand  Must  be  Made. 

The  right  to  demand  an  appraisal,  if  an  appraisal  be  neces- 
sary only  when  "required,"  must  be  exercised  within  a  reason- 
able time  after  the  disagreement  of  the  parties.  A  demand 
by  the  insurer  fifty-seven  days  after  proofs  of  loss  have  been 
received  and  retained  without  objection  to  the  amount  of 
damage  claimed,  is  too  late,  where,  by  the  terms  of  the  policy, 
the  amount  becomes  payable  sixty  days  after  the  proofs 
of  loss  have  been  served.  When  a  policy  gives  the  insurer 
an  option  to  take  the  damaged  property  at  its  appraised 
value  or  replace  it  within  a  reasonable  time  on  giving  notice 

"  National  Home  B.  &  L.  Ass'n  v.  Dwelling  House  Ins.  Co.,  106 
Mich.  236,  64  N.  "W.  21;  Brock  v.  Dwelling  House  Ins.  Co.,  102  Mich. 
583,  61  N.  W.  67;  Lesure  Lumber  Co.  v.  Mutual  Fire  Ins.  Co.,  101 
Iowa,  514,  70  N.  W.  76L;  Grand  Rapids  Fire  Ins.  Co.  v.  Finn,  60  Ohio 
St  513,  54  N.  E.  545. 

»» Davis  V.  Atlas  Assur.  Co.,  16  Wash.  232,  47  Pac.  436,  885.  See, 
also,  Schrepfer  v.  Rockford  Ins.  Co.,  77  Minn.  291,  79  N.  W.  1005. 

"  Zalesky  v.  Home  Ins.  Co.,  102  Iowa,  613,  71  N.  W.  566. 


§  211  WHEN    STIPULATIONS    BECOME    OPERATIVE.  627 

\\dthin  thirty  days  after  proofs  of  loss  are  sei'ved,  the  ap- 
praisal must  be  demanded  within  thirty  days.^^ 

An  action  may  be  brought  at  the  expiration  of  sixty  days 
after  the  presentation  of  proofs  of  loss,  when  there  is  no  dis- 
pute as  to  the  amount  of  damage  before  that  time  and  the 
provision  is  for  an  arbitration  within  sixty  days  after  proofs 
are  fumished.^^  A  demand  nearly  a  year  after  a  loss  occurs 
is  too  late.^^  Delay  by  the  insured  in  the  demanding  of  an 
arbitration,  where  one  is  necessary  to  his  right  of  action,  does 
not  defeat  his  right  afterwards  to  make  an  offer  of  arbitra- 
tion and  maintain  his  action  upon  the  refusal  of  the  insurer  to 
arbitrate,  unless  the  insurer  has  been  prejudiced  by  the  delay 
or  an  arbitration  has  become  impracticable  or  impossible 
where  the  insurer  might  itself  have  demanded  an  arbitra- 
tion.^^ 

The  Form  of  the  Demand. 

Any  notice  which  fully  advises  the  party  notified  of  the  in- 
tention of  his  adversary  to  insist  upon  a  reference  or  appraisal 
according  to  the  terms  of  the  policy  is  sufficient  unless  the 
form  and  manner  of  giving  notice  be  designated  in  the  policy ; 
but  when  the  policy  specifies  the  form  of  giving  a  demand, 
and  provides  for  an  appraisal  upon  "the  written  request  of 
either  party,"  an  arbitration  is  only  necessary  when  requested 
in  writing,  and  an  oral  request  is  insufficient ;  and  an  insurer 
failing  to  avail  itself  of  this  right  given  by  the  policy  in  the 
manner  stipulated  therein  cannot  maintain  the  defense  of  no 

'^Zimeriski  v.  Ohio  Farmers'  Ins,  Co.,  91  Mich.  600,  52  N.  W.  55: 
Brock  V.  Dwelling  House  Ins.  Co.,  102  Mich.  583,  61  N.  W.  67;  Numey 
V.  Fireman's  Fund  Ins.  Co.,  63  Mich.  633,  30  N.  W.  350. 

°» Hayes  v.  Milford  Mut.  Fire  Ins.  Co.,  170  Mass.  492,  27  Ins.  Law 
J.  459. 

"Davis  V.  Atlas  Assur.  Co.,  16  Wash.  232,  47  Pac.  436,  885. 

"Schrepfer  v.  Rockford  Ins.  Co.,  77  Minn,  291,  79  N.  W.  1005;  Mc-- 
Nees  V.  Southern  Ins.  Co.,  69  Mo,  App.  232. 


628  AEBITKATION    AND    AWARD.  §  211 

award.^^  A  letter  to  the  assured  from  tlie  adjuster  of  the  in- 
surer referring  to  a  paper  including  an  agreement  for  arbitra- 
tion executed  bj  the  company,  and  requesting  the  insured  to 
sign  it,  and  a  proposal  dra-^Ti  in  strict  conformity  with  the 
provisions  of  the  policy,  constitute  "a  written  request"  for  ar- 
bitration within  the  meaning  of  that  term  in  a  policy.^''' 
"Where  several  insurers  of  the  same  property  desire  an  ap- 
praisal they  must  make  their  demands  separately.^^  If  two 
fires  follow  one  another  closely,  a  single  demand  and  appraisal 
may  be  sufEcient.^^  Where,  by  the  teitns  of  the  policy,  upon  a 
disagreement,  the  insured  is  to  deposit  with  the  insurer  money 
to  pay  for  an  appraisement  and  the  insurer  is  to  appoint  the 
appraisers,  an  appraisal  had  Avithout  notice  to  the  insurer 
of  the  appointment  of  the  appraisers  and  of  the  time  when 
they  are  to  act,  is  void.^° 

On  Whom  the  Demand  Should  be  Made. 

A  demand  can  be  served  or  made  upon  either  of  the  parties 
or  a  duly  authorized  agent  of  either,  who  is  empowered  to 
act  in  the  premises.  Thus  a  demand  may  be  served  upon  any 
agent  of  the  insurer  who  has  authority  to  issue  policies  and 

=' Davis  V.  Anchor  Mut.  Fire  Ins.  Co.,  96  Iowa,  70,  64  N.  W.  687; 
Wright  V.  Susquehanna  Mut.  Fire  Ins.  Co.,  110  Pa.  St.  29;  Phoenix 
Ins.  Co.  V.  Badger,  53  Wis.  283;  Wallace  v.  German-American  Ins. 
Co.,  2  Fed.  658;  Numey  v.  Firemans'  Fund  Ins.  Co.,  63  Mich.  633; 
German-American  Ins.  Co.  v.  Steiger,  109  111.  254.  Compare  Hutch- 
inson V.  Liverpool  &  L.  &  G.  Ins.  Co.,  153  Mass.  143,  10  L.  R.  A.  558. 

"Pioneer  Mfg.  Co.  v.  Phoenix  Assur.  Co.,  106  N.  C.  28;  Chippewa 
Lumber  Co.  v.  Phenix  Ins.  Co.,  80  Mich.  116;  Zalesky  v.  Home  Ins. 
Co.,  102  Iowa,  613,  71  N.  W.  566. 

=' Connecticut   Fire   Ins.  Co.  v.  Hamilton  (C.  C.  A.),  59    Fed.  258; 
George  Dee  &  Sons  Co.  v.  Key  City  Fire  Ins.  Co.,  104  Iowa,  167,  73 
N.  W.  595;  Harrison  v.  German-American  Fire  Ins.  Co.,  67  Fed.  587. 
But  see  Wicking  v.  Citizens'  Mut.  Fire  Ins.  Co.,  118  Mich.  640,  IT 
N.  W.  277. 

"'  Mechanics'  Ins.  Co.  v.  Hodge,  149  111.  305,  46  111.  App.  479. 

*°  Schreiber  v.  German-American  Hail  Ins.  Co.,  43  Minn.  368. 


§  212  SUBMISSION.  629 

collect  premiums  for  it.^^  But  the  insurer  is  not  affected  by 
service  on  one  who  is  not  commissioned  by  it  where  the  policy 
provides  that  no  person  shall  be  considered  as  an  agent  of  the 
company  except  one  holding  a  commission  from  it.^^  And 
a  notice  served  upon  a  treasurer,  who  has  at  the  time  prac- 
tically entire  management  of  the  business,  and  knowledge  of 
the  meeting  and  proceedings  of  the  appraisers,  is  binding 
iipon  the  corporation  which  he  represents.^^ 

Submission.  ' 

§  212.  Neither  party  is  under  any  obligation  to  make  any 
agreement  for  submission  except  the  one  provided  for  in  the 
policy. 

The  parties  may  waive  or  modify  the  stipulations  of  the  pol- 
icy and  can  agree  upon  a  different  form  of  submission,  which 
when  executed  will  support  a  valid  award. 

An  executed  submission  according  to  the  terms  of  the  con- 
tract is  irrevocable.  A  voluntary  submission  or  common-law 
submission  is  revocable  at  least  until  after  the  award  has  been 
raade. 

The  submission  of  a  disputed  matter  to  arbitrators  is 
usually  evidenced  by  a  written  agi'eement  describing  the 
matters  involved  in  the  arbitration,  the  names  or  means 
of  ascertaining  the  arbitrators,  the  powers  and  duties  of 
the  arbitrators,  and  in  a  general  way  the  methods  to  be 
adopted  for  the  conduct  of  the  proceedings  and  the  time 
and  manner  of  rendering  an  award.  If  the  submission  is  in- 
voluntary, it  must  be  according  to  the  tenns  of  the  policy ; 
but  an  appraisement  of  the  amount  of  a  loss  made  by  per- 
sons appointed  informally  by  the  insurer  and  insured 
is  binding  although  the  proceedings  leading  up  to  the  ap- 
pointment and  appraisal  are  not  in  strict  accordance  with 

"  Phenix  Ins.  Co.  v.  Stocks,  149  111.  319. 
"■  Mechanics'  Ins.  Co.  v.  Hodge,  46  111.  App.  479. 
"'Remington  Paper  Co.  v.  London  Assur.  Corp.,  12  App.  Div.  218, 
43  N,  Y.  Supp.  431. 


630  AKBITKATION    AND    AWARD.  §  212 

the  requirements  of  the  policy,  since  the  parties  are  at 
liberty  to  waive  such  requirements,  and  make  any  la-wful 
submission  which  is  satisfactory  to  themselves.®*  The  in- 
sured has  the  right  to  demand  that  if  an  appraisement  of  dam- 
ages provided  for  by  the  policy  is  made,  it  shall  embrace  all 
property  claimed  by  him  to  be  covered  by  the  policy,  even 
though  there  be  a  dispute  as  to  what  property  is  actually  in- 
sured.*^^  Where  the  policy  contains  a  provision  for  the  sub- 
mission of  all  differences  as  to  the  amount  of  loss,  the  insured 
can  abandon  all  claims  for  insurance  on  specific  articles  and 
demand  an  arbitration  as  to  the  amount  of  damage  on  other 
insured  property.®^ 

A  submission  to  arbitration  and  an  award  pursuant 
thereto  according  to  the  conditions  of  a  policy  of  insurance 
are  not  covered  by  nor  subject  to  the  statutory  regulations  for 
arbitration  unless  specially  included  therein.®^  A  voluntary 
submission  by  a  member  of  a  mutual  benefit  society  of  his 
claim  for  sick  benefits  to  appellate  tribunals  appointed  by  the 
constitution  and  by-laws  of  the  organization  for  that  purpose, 
is  in  the  nature  of  a  submission  to  an  arbitration,  and  a  de- 
cision pursuant  thereto  is  in  the  nature  of  an  award  and 
'binding  upon  him  in  the  absence  of  proof  of  mistake,  fraud 
or  misconduct  on  the  part  of  the  tribunal.  In  such  case  there 
is  an  implied  agreement  on  the  part  of  the  member  to  be 
bound  by  the  judgment  or  award  rendered,  and  it  is  not  neces- 
sary that  there  should  be  any  express  agreement  to  abide  by 
the  award  made,  for  the  law  implies  such  an  agreement  from 
the  very  fact  of  submission.®^ 

** London  &  L.  Fire  Ins.  Co.  v.  Storrs  (C.  C.  A.),  71  Fed.  120.  See 
notes  38-42. 

•"•"  George  Dee  &  Sons  Co.  v.  Key  City  Fire  Ins.  Co.,  104  Iowa,  167, 
73  N.  W.  594. 

•^  Pioneer  Mfg.  Co.  v.  Phoenix  Assur.  Co.,  110  N.  C.  176. 

"Enright  v.  Montauk  Fire  Ins.  Co.,  15  N.  Y.  Supp.  893. 

•»  Robinson  v.  Templar  Lodge,  97  Cal.  62,  31  Pac.  609. 


§  212  SUBMISSION.  631 

Revocability, 

.  A  compulsory  submission  to  arbitration  according  to  tbe 
terms  of  the  policy  is  irrevocable  after  it  is  made,  but  a  volun- 
tary or  common-law  submission  is  ordinarily  revocable,  at 
least  until  after  the  rendition  of  the  award.®^ 

Joint  Submission. 

A  submission  to  arbitration  may  be  made  jointly  by  the 
insured  and  several  insurance  companies  where  the  contro- 
versy of  each  is  the  same  and  where  the  policies  are  all  alike 
except  in  the  names  of  the  companies  and  the  submission  is 
such  as  provided  for  in  the  policy. '^°  Otherwise  where  the 
policies  differ  and  there  are  separate  and  distinct  contro- 
versies.'''^ 

Two  Fires,  One  Loss. 

Where  a  loss  results  by  reason  of  successive  fires  happening 
within  a  short  time  of  each  other,  the  recovery  to  be  had  on 
a  policy  by  reason  of  such  fires  is  a  single  sum,  there  being 
but  one  loss.  Where  successive  fires  have  occurred  within 
a  short  space  of  time  and  the  loss  has  not  been  in  any  maimer 
adjusted,  the  provisions  of  the  policy  requiring  differences 
to  be  submitted  to  arbitration  do  not  contemplate  a  submission 
of  the  different  items  to  different  arbitrators;  the  loss  to  be 
detei-mined  is  the  loss  sustained  by  the  assured  under  the 
terms  of  the  policy.     Whether  tliis  rule  would  apply  where  a 

™  Citizens'  Ins.  Co.  v.  Coit,  12  Ind.  App.  161,  39  N.  E.  766;  Commer- 
cial Union  Assur.  Co.  v.  Hocking,  115  Pa.  St.  407;  Soars  v.  Home 
Ins.  Co.,  140  Mass.  343;  post,  note  133;  Chippewa  Lumber  Co.  v. 
Phenix  Ins.  Co.,  80  Mich.  116. 

"Wicking  v.  Citizens'  Mut.  Fire  Ins,  Co.,  118  Mich.  640,  77  N.  W. 
275. 

"  Connecticut  Fire  Ins.  Co.  v.  Hamilton,  8  C.  C.  A.  114,  59  Fed.  262; 
Hamilton  v.  Phoenix  Ins.  Co.,  9  C.  C.  A.  530.  61  Fed.  385;  Harrison  v. 
German-American  Fire  Ins.  Co.,  67  Fed.  585. 


632  ARBITRATION   AND   AWARD.  §  213 

disagreement  had  occuiTed  and  an  arbitration  had  been  de- 
manded after  the  first  but  prior  to  the  second  fire,  quaere."^^ 

Selection  of  Abitrators  and  Umpire. 

§  213.  The  referees  or  arbitrators  are  sometimes  designated 
in  the  contract,  but  the  more  common  practice  is  simply  to  pro- 
vide suitable  machinery  to  secure  their  selection. 

The  appraisers  and  the  umpire  must  be  competent  and  dis- 
interested. 

They  act  in  a  quasi-judicial  capacity,  and  must  be  so  situated 
with  relation  to  the  parties  and  the  matters  in  dispute  as  to  be 
able  to  deal  fairly  and  impartially  without  bias  or  prejudice. 

There  is  no  objection  to  parties  agreeing  on  the  referee 
or  arbitrators  in  the  pplicy ;  but  the  conditions  more  usually 
provide  for  the  selection  only  when  the  occasion  arises  for 
referees.  In  Pennsylvania  provisions  in  policies  requiring 
arbitration  are  merely  executory,  and  are  not  enforceable  or 
binding  unless  the  arbitrators  are  mentioned  in  the  policy  it- 
self.'^^  A  provision  that  the  amount  of  compensation  to  be 
paid  in  a  given  case  should  be  referred  to  the  decision  of  one 
named  by  the  secretary  of  the  Master  of  the  Rolls  for  the  time 
being  and  that  his  award  shall  be  final,  has  been  sustained.'^^ 
And  a  condition  that  a  life  insurance  policy  will  be  paid  only 
if  in  the  opinion  of  the  surgeon-in-chief  of  the  company  the 
party  assured  should  not  die  of  intemperance,  nor  by  any 
disease  aggTavated  or  caused  thereby,  is  valid  and  binding  on 
the  parties ;  and  its  performance  must  be  pleaded  and  proved 
or  non-performance  properly  accounted  for.  But  if  such 
surgeon  be  a  stockholder  of  the  company  and  his  dividends 
are  to  be  affected  by  the  payment  of  the  claims,  and  these 

«  Mechanics'  Ins.  Co.  v.  Hodge,  46  111.  App.  479,  149  III.  305. 

"Commercial  Union  Assur.  Co.  v.  Hocking,  115  Pa.  St.  407;  Mut- 
ual Fire  Ins.  Co.  v.  Rupp,  29  Pa.  St.  528;  Penn  Plate  Glass  Co.  v. 
Spring  Garden  Ins.  Co.,  189  Pa.  St.  255. 

'*  Braunstein  v.  Accidental  Death  Ins.  Co.,  1  Best  &  S.  783. 


§  213  SELECTION    OF   AKBITKATOKS    AND    UMPIRE.  633 

facts  were  concealed  from  the  insured  at  the  time  the  policy 
was  made  and  accepted,  this  may  constitute  a  sufficient  excuse 
for  the  non-performance.'''^ 

Provisions  are  in  common  use  requiring  the  certificate  of 
«ome  magistrate  or  notary  public  to  be  appended  to  the  state- 
ment of  facts  contained  in  the  proofs  of  loss.'^'^  They  have 
been  held  invalid  where  they  attempt  to  make  the  rights  of  the 
<ilaimant  depend  upon  the  arbitrary  action  of  the  officer  of  the 
insurer.'^^  But  the  mere  fact  that  an  arbitrator  is  a  fellow 
member  with  the  claimant  in  a  mutual  organization  does  not 
disqualify  him  from  acting. "^^ 

After  making  a  submission  each  party  must,  upon  being 
notified  of  the  selection  of  an  appraiser  by  the  other  party, 
proceed  with  reasonable  speed  in  selecting  his  appraiser  and 
in  taking  steps  to  further  the  apx)raisal  proceedings. ^°  A 
party  choosing  an  appraiser  is  under  the  duty  to  select  one  who 
will  act  promptly  in  choosing  an  umpire  if  it  becomes  neces- 
sary ;  one  who  will  act  properly  throughout  the  proceedings ; 
or,  on  his  failure  so  to  do,  to  replace  him  with  another ;  and 
the  other  party  without  fault  of  his  own  "wdll  not  be  made  to 
suffer  for  his  oi^ponent's  dereliction  in  this  respect. ^"^ 

"  Campbell  v.  American  Popular  Life  Ins.  Co.,  1  MacArthur,  D.  C. 
471;  Young  v.  Grand  Council,  A.  O.  A.,  63  Minn.  506;  May,  Ins. 
p.  1110;  Schreiber  v.  German-American  Hail  Ins.  Co.,  43  Minn.  372. 

"  See  post,  "Proofs  of  Loss." 

"  Young  V.  Grand  Council,  A.  0.  A.,  63  Minn.  506. 

'"  Raymond  v.  Farmers'  Mut.  Fire  Ins.  Co.,  114  Mich.  386,  72  N.  AV. 
255. 

'» Schouweiler  v.  Merchants'  Mut.  Ins.  Ass'n,  11  S.  D.  401,  78  N.  W. 
356. 

'"Read  v.  State  Ins.  Co.,  103  Iowa,  307,  72  N.  W.  665;  McCuUough 
v.  Phoenix  Ins.  Co.,  113  Mo.  606;  Chapman  v.  Rockford  Ins.  Co.,  89 
Wis.  572,  28  L.  R.  A.  405.  In  Pennsylvania  the  rule  is  that  one  re- 
fusing or  neglecting  to  appoint  an  appraiser  is  not  concluded  by  the 
amount  fixed  by  the  appraisers  of  the  other  party,  but  is  estopped  to 
claim  the  advantage  of  provisions  making  an  appraisal  a  condition 


634  ARBITRATION    AND    AWARD.  §  213- 

The  policies  often  require  that  the  amount  of  the  loss  Joe  re- 
ferred to  and  determined  by  "disinterested"  or  "competent 
and  disinterested"  apjjraisers.  The  meaning  of  the  word 
"competent"  is  easily  arrived  at.  It  means  simply  that  the 
appraisers  must  have  ordinary  business  experience  and  ability 
which  qualify  them  to  deal  with  the  matters  in  controversy. 
The  word  "disinterested"  does  not  mean  simply  a  lack  of 
pecuniary  interest,  but  requires  the  appraiser  to  be  one  who 
is  not  biased  or  prejudiced,  so  that  by  whomsoever  chosen,  he 
can  decide  matters  submitted  to  him  impartially  and  with  the 
same  judicial  fairness  as  a  judge  or  juror.  Appraisers  ought 
to  enter  upon  the  discharge  of  their  duty  in  such  a  frame  of 
mind,  and  occupying  such  a  position  with  relation  to  both 
parties,  as  leaves  them  free  to  act  in  a  quasi- judicial  capacity 
as  a  court  selected-  by  tlT,e  parties,  free  from  any  partiality 
or  bias  in  favor  of  either  party ;  and  so  as  to  do  equal  and 
exact  justice  between  them.  It  is  the  duty  of  the  appraisers 
to  give  a  fair  and  just  award,  one  which  shall  fairly  and  hon- 
estly represent  the  real  loss  actually  sustained;  and  it  is  not 
a  duty  of  either  appraiser  to  see  how  far  he  can  depart  from 
that  purpose  and  still  obtain  the  consent  or  agreement  of  his 
associate,  or  in  case  of  his  refusal,  then  the  consent  or  agree- 
ment of  the  umpire.  It  is  proper,  and  to  be  expected,  that 
all  of  the  facts  which  may  be  favorable  to  the  party  noaninat- 
ing  him  shall  be  brought  out  by  an  appraiser  so  that  due 
weight  may  be  given  to  them ;  but  the  appraiser  is  in  no  sense,, 
for  the  purpose  of  the  appraisal,  the  agent  of  the  party  ap- 
pointing or  nominating  him ;  and  he  remains  at  all  times 
under  the  duty  to  be  fair  and  unprejudiced  or  in  the  language 
of  the  policy  "disinterested."^^ 

precedent.  Penn  Plate  Glass  Co.  v.  Spring  Garden  Ins.  Co.,  189  Pa. 
St.  255.  See  ante,  "Demand  for  Arbitration, "  and  post,  "Waiver  of 
Arbitration." 

"Bradshaw  v.  Agricultural  Ins.  Co.,  137  N.  Y.  137;  Read  v.  State 


§  213  SELECTION    OF   ARBITRATORS    AND    UMPIRE.  035 

Tlie  mere  fact  that  the  person  selected  as  appraiser  is  a 
public  adjuster  of  fire  losses  will  not  render  him  incompetent. 
]n  Meyerson  v.  Hartford  Fire  Ins.  Co.,^^^  the  plaintiff  nom- 
inated three  persons,  each  of  whom  was  successively  rejected 
by  the  company.  The  last  person  nominated  by  plaintiff  had 
been  a  partner  of  the  person  who  was  in  charge  of  plaintiff's 
business.  The  company  objected  to  him  on  this  account  and 
the  court  said:  "The  [mere]  fact  that  *  *  *  [the 
party  proposed]  had  about  two  months  previously  been  a 
partner  of  *  *  *  [the  plaintiff's  agent]  did  not  jyer  so 
make  him  interested;  *  *  *  nor  did  the  fact  that  he 
had  formerly  been  an  insurance  adjuster  ne-cessarily  make 
him  interested;  hence  the  question  whether  there  was  any 
force  in  the  objection  [of  the  insurance  company  to  the  ap- 
praiser suggested  by  plaintiff  on  the  grounds  of  interest]  was 
*  *  *  properly  submitted  to  the  jury,  and  their  finding 
should  *  *  *  be  regarded  as  conclusive.  The  fact 
that  *  *  *  [one  of  the  men  proposed  by  plaintiff]  had 
been  an  insurance  adjuster  would  certainly  tend  to  prove  his 
competency  for  the  task  he  was  to  assume,  and  the  condition 
of  the  policy  requires  the  appraiser  to  be  not  only  disinter- 
ested, but  competent."  An  award  is  not  void  because  one  of 
the  appraisers  had  been  an  employee  of  the  insurance  com- 

Ins.  Co.,  103  Iowa,  307,  72  N.  W.  665;  Meyerson  v.  Hartford  Fire  Ins. 
Co.,  17  Misc.  Rep.  121,  39  N.  Y.  Supp.  329;  Chandos  v.  American  Fire 
Ins.  Co.,  84  Wis.  184;  Pullman  v.  North  British  Mercantile  Ins.  Co., 
159  Mass.  118,  34  N.  B.  169;  Hickerson  v.  German  American  Ins.  Co., 
96  Tenn.  193,  32  L.  R.  A.  172;  Brock  v.  Dwelling  House  Ins.  Co.,  102 
Mich.  583;  Niagara  Fire  Ins.  Co.  v.  Bishop,  154  111.  9;  McCullough  v. 
Phoenix  Ins.  Co.,  113  Mo.  606;  Bishop  v.  Agricultural  Ins.  Co.,  130- 
N.  Y.  488;  Springfield  F.  &  M.  Ins.  Co.  v.  Payne,  57  Kan.  291,  46  Pac. 
315;  Union  R.  Co.  v.  Dull.  124  U.  S.  173,  8  Sup.  Ct.  433;  Young  v. 
Grand  Council,  A.  O.  A.,  63  Minn.  506;  Campbell  v.  American  Popular 
Life  Ins.  Co.,  1  MacArthur,  D.  C.  471;  Levine  v.  Lancashire  Ins.  Co., 
66  Minn.  138,  68  N.  W.  855;  post,  notes  147-149. 
»i»  39  N.  Y.  Supp.  329. 


<)36  ARBITRATION    AND    AWARD.  §  213 

pany,  while  the  other  had  been  in  employ  of  the  insured  and 
the  two  agi-eed  on  the  extent  of  the  loss  without  an  umpire.^- 
The  prior  service  of  an  arbitrator  in  the  same  capacity  does 
not  necessarily  render  him  incompetent  to  act  in  subsequent 
matters.  Any  known  disqualification  of  an  arbitrator  is 
waived  by  failure  to  promptly  except  to  his  appointment.^^ 

The  Umpire. 

Some  policies  provide  for  the  selection  of  three  disinter- 
ested and  competent  persons  to  appraise  the  loss,  one  selected 
by  each  of  the  parties  to  the  controversy  and  these  two  in  turn 
selecting  a  third  of  like  qualifications.  In  such  case  there 
tire,  three  appraisers  of  equal  and  co-ordinate  powers  and 
duties.  Other  policies  provide  for  the  selection  of  an  umpire 
only  in  case  the  arbitrators  cannot  agree.  There  is  then  no 
occasion  for  the  selecting  of  an  umpire  until  after  it  becomes 
apparent  that  the  arbitrators  cannot  arrive  at  an  award.  The 
umpire  should  be  chosen  with  the  same  care  as  the  apprais- 
ers and  should  have  the  same  qualifications.  If  a  suitable^ 
man  can  be  found  living  in  the  vicinity  of  the  loss,  he  should 
be  selected.  In  Brock  v.  Dwelling  House  Ins.  Co.,^^  the  de- 
fendant's appraiser  insisted  upon  the  appointment  of  a  per- 
son with  whom  he  was  presumably  acquainted  and  who  was 
a  stranger  to  the  locality  of  the  loss  and  to  plaintiff's  ap- 
praiser. The  latter  offered  the  names  of  twelve  persons  resi- 
dent in  the  locality  from  which  the  jury  in  case  of  suit  would 

«- Remington  Paper  Co.  v.  London  Assur.  Corp.,  43  N.  Y.  Supp.  431; 
Union  R.  Co.  v.  Dull,  124  U.  S.  173,  8  Sup.  Ct.  433. 

»'  Stemmer  v.  Scottish  U.  &  N.  Ins.  Co.,  33  Or.  65,  53  Pac.  498. 
The  mere  failure  of  the  insured  to  choose  a  competent  and  un- 
prejudiced appraiser  does  not  of  itself  work  a  forfeiture  of  his  de- 
mand for  an  appraisal,  nor  excuse  the  insurer  from  taking  steps  to 
secure  other  appraisers.  Germania  Fire  Ins.  Co.  v.  Frazier,  22  111. 
App.  327. 

"  102  Mich.  583. 


I 


§  213  SELECTION    OF    ARBITRATOKS  AND    UMPIRE.  G37 

be  clraAvn.  No  valid  reason  was  assigned  for  the  refusal  to 
accept  one  of  the  twelve.  The  court  said :  "The  agreement 
[stipulation  in  the  policy]  docs  not  contemplate  that  the  um- 
pire shall  be  selected  at  random,  or  without  some  knowledge 
on  the  part  of  both  appraisers  as  to  his  competency  and  fitness. 
Parties  living  in  the  locality  [of  the  fire]  would  naturally  bo 
best  qualified  to  pass  upon  the  question  of  values,  and  an 
appraiser  would  not  be  under  obligation  to  make  trips  to 
other  localities  than  that  of  the  fire  to  ascertain  as  to  the 
propriety  of  appointing  the  person  suggested  as  an  umpire. 
The  agreement  contemplates  an  inexpensive  mode  of  settle- 
ment. Strangers  to  the  locality  are  not  usually  selected  as 
appraisers,  and,  in  case  of  the  inability  of  the  appraisers  to 
agree,  a  third  party,  known  to  both,  and  in  whom  both  have 
confidence,  is  supposed  to  be  selected.  *  *  *  The  re- 
quirement that  plaintiff's  appraiser  should  go  into  other  por- 
tions of  the  state  to  make  inquiry  as  tO'  the  fitness  of  the 
l^ersons  named  [as  appraisers]  was  not  a  reasonable  one. 
The  suggestion  that  some  one  be  selected  from  the  locality  of 
the  fire  was  not  unreasonable ;"  and  such  conduct  on  the  part 
of  the  appraiser  of  the  insurer  amounts  to  a  refusal  to  pro- 
ceed with  the  appraisal,  and  warrants  the  insured  in  bringing 
suit  without  an  appraisal.'^^ 

If  an  umpire  is  not  chosen,  owing  to  the  interference  or  mis- 
conduct of  either  party  with  the  purpose  of  delaying  or  pre- 
venting a  submission  or  an  award,  such  party  is  estopped  from 
interposing  the  defense  of  no  arbitration ;  and  the  arbitrav}-- 
or  unreasonable  conduct  or  delay  of  the  arbitrator  in  choosing 
an  umpire  when  one  becomes  necessary  is  imputed  to  the 

''Hickerson  v.  German  American  Ins.  Co.,  96  Tenn.  193,  32  L.  R. 
A.  172;  Niagara  Fire  Ins.  Co.  v.  Bishop,  154  111.  9;  Bishop  v.  Agri- 
cultural Ins.  Co.,  130  N.  Y.  488;  Uhrig  v.  Williamsburgh  City  Fire 
Ins.  Co.,  101  N.  Y.  362. 


638  ARBITKATIOX   AND   AWARD.  §  213 

party  appointing  liim.^^  Any  irregularities  in  tlie  choosing 
of  an  umpire,  or  any  disqualifications  of  either  umpire  or 
appraisers,  are  waived  by  the  parties  proceeding  to  a  hearing 
with  knowledge  of  these  facts;  and  the  failure  to  select  an 
umpire  is  waived  by  the  insured  when  he  makes  an  award 
the  basis  of  a  suit.^''^ 

Time  of  Choosing  Umpire. 

The  proper  time  to  choose  the  umpire  must  be  determined 
from  the  w^ording  of  the  policy.  Where  it  reads:  "The 
amount  of  damage  in  case  of  disagreement  shall  be  ascertained 
by  appraisers,  one  to  be  selected  by  each  party,  and  the  two 
so  chosen  shall  first  select  an  umpire  to  act  with  them  in  case 
of  their  disagreement;  and,  if  the  said  appraisers  fail  to 
agree,  they  shall  refer  their  differences  to  such  umpire,  and 
the  award  of  any  two  in  wi'iting,  under  oath,  shall  be  binding 
and  conclusive," — the  omission  of  the  appraisers  to  appoint 
an  umpire  before  they  proceed  to  appraise  the  loss  does  not 
invalidate  the  award.  "Such  third  person  is  not  strictly  an 
umpire.  *  *  *  J£e  is  a  third  arbitrator,  to  be  called 
in  to^  act  with  the  others  after  disagreement,  and  then  any 
two  of  them  make  the  award.  *  *  *  The  time  when  an 
act  is  to  be  done  *  *  *  is  not  essential  when  it  may  as 
well  be  done  later.  *  *  *  The  umpire  here  can  act 
only  after  disagreement  of  the  arbitrators.  Until  then  an 
umpire  is  not  necessary.  *  *  *  The  time,  therefore, 
fixed  in  the  contract,  is  not  essential  or  material."^^    But  if 

''Read  v.  State  Ins.  Co.,  103  Iowa,  307,  72  N.  W.  665.  See  post, 
"Waiver  of  Arbitration." 

"Morris  V.  German-American  Ins.  Co.,  14  Ky.  Law  Rep.  859: 
Finch,  Appraisal  and  Award,  §  11.    See  cases  supra. 

«^Chandos  v.  American  Fire  Ins.  Co.,  84  Wis.  184,  54  N.  W.  393; 
Caledonian  Ins.  Co.  v.  Traub,  83  Md.  524,  35  Atl.  13;  Morse,  Arbitra- 
tion, 241-243,  341;  Enright  v.  Montauk  Fire  Ins.  Co.,  15  N.  Y.  Supp. 
893;  Knowlton  v.  Homer,  30  Me.  552.    But  see  Adams  v.  New  York 


I  214  CONDUCTING  APPRAISAL.  G30 

the  submission  requires  the  appointment  of  an  umpire  an 
award  by  the  appraisers  without  choosing  an  umpire  is 
void.8» 

Conducting  Appkaisal. 

§  214.  The  appraisal  must  be  conducted  in  good  faith  and 
■with  proper  diligence  so  as  to  carry  out  the  intent  and  purpose 
of  the  submission. 

The  appraisers  should  be  governed  in  their  proceedings  by 
business  sense,  prudence  and  judgment  rather  than  by  strict 
rules  of  law. 

The  powers  of  the  appraisers  are  exhausted  when  an  award 
is  returned. 

It  is  the  duty  of  the  appraisers  after  being  selected  to  pro- 
ceed fairly  and  honestly  and  with  reasonable  celerity  in  ap- 
praising the  loss  or  damage.  They  may  conduct  the  investiga- 
tion according  to  their  own  best  judgment  and  may  take  or  re- 
ject evidence  as  they  see  fit.  They  are  not  forced  to  follow 
the  strict  iiiles  of  law  unless  it  be  a  condition  of  the  submis- 
sion that  they  shall  do  so.^*^  If  they  act  in  good  faith,  neither 
party  will  be  permitted  to  avoid  the  award  by  showing  that 
they  erred  in  judgment,  either  respecting  the  facts  or  respect- 
ing the  law  where  the  submission  does  not  require  them  to  fol- 
low the  law.  The  evidence  should  be  produced  by  the  con- 
tending parties  and  all  proper  evidence  offered  should  be  re- 
ceived and  considered.  All  matters  submitted  to  them  should 
be  passed  upon.*^^  If  persons  are  selected  as  arbitrators  by 
reason  of  special  knowledge  or  skill  possessed  by  them  with 

Bowery  Fire  Ins.  Co.,  85  Iowa,  6,  51  N.  W.  1149;  Hartford  Fire  Ins. 
Co.  V.  Bonner  Mercantile  Co.  (C.  C.  A.),  56  Fed.  378. 

'"Mutual  Fire  Ins.  Co.  v.  Alvord,  61  Fed.  752. 

*"Remelee  v.  Hall,  31  Vt.  583;  Raymond  v.  Farmers'  Mut.  Ins.  Co.. 
114  Mich.  386,  72  N.  W.  254. 

"  6  Wait's  Actions  and  Defences,  553 ;  Merritt  v.  Merritt,  11  111. 
565;  Moore  v.  Barnett,  17  Ind.  349;  Fudickar  v.  Guardian  Mut.  Life 
Ins.  Co.,  62    N.  Y.  392;    Boston   Water   Power   Co.  v.  Gray,    6    Mete. 


640  AKBITKATION    AND    AWARD.  §  214 

reference  to  tlie  matter  in  controversy,  so  that  it  is  apparent 
that  the  parties  intended  to  rely  upon  their  personal  informa- 
tion, investigation  and  judgment  rather  than  upon  their  con- 
sideration of  evidence  brought  before  them,  they  may  even 
be  justified  in  refusing  altogether  to  hear  evidence.^ ^  They 
may  consult  experts  and  make  inquiries  for  their  own  infor- 
mation in  the  absence  of  the  parties  and  each  in  the  absence 
of  the  other,  and  this  will  not  invalidate  an"  award  unless  it 
appears  that  one  party  was  prejudiced  and  the  decision  was 
affected  thereby.^^  The  mere  statement  of  the  insured  to  the 
appraisers  that  he  was  willing  to  produce  witnesses  on  value 
and  the  reply  of  the  appraisers  that  if  they  needed  witnesses^ 
they  could  get  them  themselves,  is  not  sufficient  to  put  the  ap- 
praisers in  the  position  of  rejecting  relevant  evidence.^'* 

The  presumption  is  that  the  arbitrators  proceeded  properly 
and  that  everything  was  rightly  done ;  that  they  did  not  exceed 
their  powers  and  that  they  only  appraised  the  proper  loss.^^ 
Eut  an  award  is  not  binding  where  one  of  the  appraisers 
never  saw  the  destroyed  property  and  afforded  the  insured  no 
opportunity  to  produce  or  impart  information  or  evidence 
as  to  the  character  and  value  of  the  property  j^*^  nor  where  the 

(Mass.)  131;  Goddard  v.  King,  40  Minn.  164;  Canfield  v.  Watertown 
Fire  Ins.  Co.,  55  Wis.  419. 

»"  Morse,  Arbitration,  143;  Wiberly  v.  Matthews,  91  N.  Y.  648;  Eads 
V.  Williams,  24  L.  J.  Ch.  531;  Caledonian  Ry.  Co.  v.  Lockhart,  3 
Macq.  H.  L.  Cas.  808;  Johnston  v.  Cheape,  5  Dow,  247. 

»=  Morse,  Arbitration,  127,  167;  Finch,  Appraisal,  12;  Bangor  Sav. 
Bank  v.  Niagara  Fire  Ins.  Co.,  85  Me.  68,  20  L.  R.  A.  650;  Straw  v. 
Truesdale,  59  N.  H.  109;  Springfield  Jf .  &  M.  Ins.  Co.  v.  Payne,  57 
Kan.  291,  46  Pac.  315;  Adams  v.  Bushey,  60  N.  H.  290. 

"*  Stemmer  v.  Scottish  U.  &  N.  Ins.  Co.,  33  Or.  65,  53  Pac.  498. 

•'Karthaus  v.  Ferrer,  1  Pet.  (U.  S.)  222;  Lutz'v.  Linthicum,  8  Pet. 
(U.  S.)  165;  Williams  v.  Paschall,  4  Ball.  (U.  S.)  284;  Fire  Ass'n  of 
Philadelphia  v.  Colgin  (Tex.  Civ.  App.),  33  S.  W.  1004, 

""Springfield  F.  &  M.  Ins.  Co.  v.  Payne,  57  Kan.  291,  46  Pac.  315; 
Mosness  v.  German-American  Ins.  Co.,  50  Minn.  341. 


§  214  CONDUCTi;^^G   APPRAISAL.  641 

umpire  receives  the  statement  of  the  facts  from  the  arbitrators 
alone  in  the  absence  of  the  parties  and  without  hearing 
them.^'^  And  both  parties  are  entitled  to  notice  of  the  time 
and  place  of  the  meeting  and  to  appear  before  the  arbitra- 
tors.^^ In  acquiring  information  and  knowledge  upon  which 
to  base  their  conclusions,  the  arbitrators  should  act  together 
and  as  far  as  possible  upon  information  obtained  bj  them 
collectively.^^  Directions  indorsed  upon  submission  but  not 
signed,  are  no  part  of  the  agreement  and  need  not  be  fol- 
lowed. ^^^  The  fraud  or  dishonesty  of  the  appraiser  of  either 
party  or  his  refusal  to  proceed  promptly  and  according  to  the 
terms  of  the  submission,  or  his  unreasonable  and  arbitrary 
insistence  upon  proceeding  in  an  unusual,  or  unfair  way,  or 
his  refusal  to  make  reasonable  endeavors  to  agree  upon  an 
umpire,  will  justify  the  other  in  withdrawing  from  the  ap- 
praisal. ^^^ 

Wliere  the  policy  provides  that  the  two  appraisers  shall 
choose  an  umpire  to  whom  they  shall  refer  their  differences, 
the  umpire  can  only  act  when  the  arbitrators  cannot  agree/ 
and  the  combined  action  of  the  two  appraisers  on  the  various 
items  of  the  loss  and  their  failure  to  agree  are  essential  to 
the  validity  of  an  estimate  made  by  one  of  them  and  the  um- 

"' Falconer  v.  Montgomery,  4  Dall.  (U,  S.)   232. 

»«Phcenix  Ins.  Co.  v.  Moore  (Tex.  Civ.  App.),  46  S.  W.  1131. 

"  Citizens'  Ins.  Co.  v.  Hamilton,  48  111.  App.  593. 

'""  Enright  v.  Montauk  Fire  Ins.  Co.,  15  N.  Y.  Supp.  893. 

"'Chapman  v.  Rockford  Ins.  Co.,  89  Wis.  572,  62  N.  W.  422;  Read 
V.  State  Ins.  Co.,  103  Iowa,  307,  72  N.  W.  665;  Hickerson  v.  German 
American  Ins.  Co.,  96  Tenn.  193,  32  L.  R.  A.  172;  Brock  v.  Dwelling 
House  Ins.  Co.,  102  Mich.  583,  26  L.  R.  A.  623;  Powers  Dry  Goods 
Co.  V.  Imperial  Fire  Ins.  Co.,  48  Minn.  380;  Braddy  v.  New  York 
Bowery  Fire  Ins.  Co.,  115  N.  C.  354;  Niagara  Fire  Ins.  Co.  v.  Bishop, 
154  111.  9;  McCullough  v.  Phcenix  Ins.  Co.,  113  Mo.  606;  Bishop  v. 
■Agricultural  Ins.  Co.,  130  N.  Y.  488.  And  the  refusal  by  an  ap- 
praiser appointed  by  the  insured  to  go  on  with  the  arbitration  unless 
all  the  property  is  appraised,  including  a  part  claimed  by  the  com- 
KERR,  INS.— 41 


642  ARBITRATION   AND    AWARD.  215 

pire.^^^  And  if  the  appraisers  agree,  the  umpire  is  not  re- 
quired to  participate. -^^^  Where  two  arbitrators  are  ap- 
pointed, and  thej,  on  failing  to  agree,  choose  an  umpire,  an 
award  made  without  notice  to  all  is  invalid.  ^^^  In  New 
Jersey  it  is  held  that  after  a  disagreement  of  the  arbitrators 
as  to  the  auiount  of  damage,  either  of  them  may  request  the 
umpire  to  attend  at  a  specified  time  and  place  to  complete 
the  appraisal.  Of  this,  he  must  give  his  fellow  arbitrator 
due  notice,  and  if  the  latter  in  bad  faith  endeavors  to  prevent 
or  delay  further  action  by  refusing  to  attend  or  participate, 
the  former,  with  the  umpire,  can  make  a  valid  appraisement 
and  award.  ^^^     But  the  law  on  this  point  is  in  dispute. -^^^ 

By  the  making  and  rendition  of  an  award,  the  appraisers 
exhaust  their  powers  as  such,  and  they  have  thereafter  no 
right  to  alter  or  amend  the  award  they  have  made,  nor  to  make 
an  additional  or  supplemental  award  without  the  consent  of 
all  parties.  ^°^^ 

Failure  of  Arbitrators  to  Agree. 

§  215.  Where  the  failure  of  an  appraisal  is  due  to  the  im- 
proper interference,  fraud  or  misconduct  of  either  party  to  the 

pany  not  to  be  covered  by  the  policy,  without  specifying  the  damage 
on  each  class  of  property  separately,  is  unreasonable,  and  will  pre- 
vent an  action  on  the  policy.  Michel  v.  American  Cent.  Ins.  Co.,  17 
App.  Div.  87,  44  N.  Y.  Supp.  832. 

"=  Caledonian  Ins.  Co.  v.  Traub,  83  Md.  524,  35  Atl.  13;  Manufact- 
urers' &  B.  Fire  Ins.  Co.  v.  Mullen,  48  Neb.  620,  67  N.  W.  445;  Hills 
v.  Home  Ins.  Co.,  129  Mass.  345,  9  Ins.  Law  J.  814.  But  see  Broad- 
way Ins.  Co.  V.  Doying,  55  N.  J.  Law,  569. 

103  Enright  v.  Montauk  Fire  Ins.  Co.,  15  N.  Y.  Supp.  893. 

"*Linde  v.  Republic  Fire  Ins.  Co.,  18  Jones  &  Sp.  (N.  Y.)  362. 

^"^  Broadway  Ins.  Co.  v.  Doying,  55  N.  J.  Law,  569.  See  note  107; 
Yendel  v.  Western  Assur.  Co.,  21  Misc.  Rep.  349,  47  N.  Y.  Supp.  141. 

^""Caledonian  Ins.  Co.  v.  Traub,  83  Md.  524,  35  Atl.  13;  Manufact- 
urers' &  B.  Fire  Ins.  Co.  v.  Mullen,  48  Neb.  620,  67  N.  W.  445;  Hills 
V.  Home  Ins.  Co.,  129  Mass.  345,  9  Ins.  Law  J.  814. 

106a  Edfjy  y   London  Assur.  Corp.,  65  Hun,  308,  20  N.  Y.  Supp.  216. 


4 


§  215.  FAILURE    OF   ARBITRATORS    TO   AGREE.  043 

submission,  the  other  party,  if  himself  innocent,  is  absolved 
from  compliance  with  the  conditions  of  the  policy  regarding 
an  appraisal. 

The  authorities  disagree  as  to  the  effect  of  the  failure  of  an 
appraisal  when  both  parties  have  honestly  but  ineflfectually 
endeavored  to  obtain  an  award  in  accordance  with  the  terms 
of  the  contract. 

Where  arbitration  in  case  of  disagreement  as  to  the  amount 
of  damage  is  by  the  terms  of  the  policy  a  condition  precedent 
to  the  maintenance  of  an  action  on  the  policy,  and  the  arbi- 
trators having  been'  duly  selected  cannot  discharge  their  duty 
in  any  particular,  for  instance,  cannot  agi'ee  upon  the  selection 
of  an  umpire,  or  cannot  agree  upon  an  award  with  or  without 
an  umpire,  the  rule  is  that,  if,  all  parties  having  acted  in 
good  faith,  and  having  honestly  endeavored  to  arrive  at  an 
award,  the  arbitrators  cannot  agree  upon  an  umpire,  or  if  the 
umpire,  being  chosen,  one  of  the  arbitrators  and  the  umpire, 
or  so  many  as  be  necessary  cannot  agree  upon  an  award,  new 
appraisers  and  a  new  umpire  ought  to  be  chosen ;  if  the  insured 
refuses  to  submit  to  the  terms  of  the  policy,  or  if  a  failure 
to  agree  either  upon  an  umpire  or  an  award  is  due  to  the  bad 
faith  or  misconduct  of  the  insured,  or  his  agent,  or  the  ap- 
praiser selected  by  him,  the  insured  cannot  recover ;  if  the  fail- 
ure to  select  an  umpire  or  to  arrive  at  an  award  is  due  to  the 
fraud  or  misconduct  of  the  insurer,  or  its  agent,  or  appraiser, 
it  mil  be  estopped  to  plead  the  defense  of  no  award.^^'^ 

'"  Hamilton  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  136  U.  S.  242,  10  Sup. 
Ct.  945;  Summerfield  v.  North  British  &  M.  Ins.  Co.,  62  Fed.  249; 
Davenport  v.  Long  Island  Ins.  Co.,  10  Daly  (N.  Y.),  535;  Read  v. 
State  Ins.  Co.,  103  Iowa.  307,  72  N.  W.  667;  Braddy  v.  New  York 
Bowery  Fire  Ins.  Co.,  115  N.  C.  354;  Caledonian  Ins.  Co.  v.  Traub, 
83  Md.  524,  35  Atl.  13;  Powers  Dry  Goods  Co.  v.  Imperial  Fire 
Ins.  Co.,  48  Minn.  389;  Bishop  v.  Agricultural  Ins.  Co.,  130  N.  Y.  488; 
Stockton  Combined  H.  &  A.  Works  v.  Glens  Falls  Ins.  Co.,  98  Cal. 
557;  Phoenix  Ins.  Co.  v.  Moore  (Tex.  Civ.  App.),  46  S-.  W.  1131.  See 
ante,  notes  101,  105,  106;  post,  183. 


644:  AKBITRATION    AND    AWARD.  §  215- 

Where  the  parties  in  their  contract  fix  on  a  certain  mode  by 
which  the  amount  to  be  paid  shall  be  ascertained,  the  party 
that  seeks  an  enforcement  of  the  agreement  must  show  that 
he  has  done  everything  in  his  power  which  can  be  done  ta 
carry  it  into  effect.  He  cannot  compel  the  payment  of  the 
amount  claimed  unless  he  shall  procure  the  kind  of  evidence- 
required  by  the  contract  or  show  that  by  time,  or  accident,  or 
through  improper  interference  of  the  other  party,  he  was  un- 
able so  to  do.  The  making  of  an  appraisal  and  award  a  con- 
dition precedent  to  the  maturity  of  the  liability  of  the  in- 
surance company  and  to  the  maintenance  of  his  action,  casts 
the  burden  of  bringing  about  the  appraisal  upon  the  insured, 
because  the  company  is  not  required  to  act  or  to  pay  until  this 
appraisal  is  procured ;  and  the  insured  has  the  option  to  pro- 
cure it,  or  attempt  to  procure  it,  and  to  press  his  claim,  or 
to  abandon  it.  The  mere  appointment  by  the  insui*ed  of  an 
appraiser  who  could  not  or  would  not  agree  with  his  associ- 
ate upon  an  umjDire,  and  whose  disagreement  necessarily  pre- 
vented the  appraisal  and  award,  falls  far  short  of  a  compli- 
ance with  the  rule  requiring  an  insured  to  show  that  he  has 
done  ever}i;hing  in  his  power  which  can  be  done.  The  in- 
sured might  have  revoked  the  appointment  and  have  selected 
another  appraiser.  He  might  have  caused  his  appraiser  to 
propose  a  number  of  unexceptionable  men  as  umpires  and  to 
request  the  appraiser  of  the  company  to  choose  from  them. 
He  might  have  caused  his  appraiser  to  request  his  associate 
to  propose  such  men  and  to  permit  him  to  choose.  He  might 
have  requested  the  insurer  to  agree  Avitli  him  upon  other  ap- 
praisers. These  are  but  the  ordinary  means  to  choose  an  um- 
pire which  would  occur  at  once  to  everyone,  wdio  really  sought 
to  secure  a  choice,  and  without  resorting  to  all  of  them  or 
taking  action  .to  procure  an  appraisal  other  than  the  appoint- 
ment of  an  inactive  appraiser,  the  insured  has  not  done  all 


§  215  FAILURE    OF   ARBITRATORS  TO    AGREE.  G45 

that  he  can  do  to  bring  about  an  appraisal  and  award.  In 
such  a  case  the  insured  is  bound  to  do  everything  in  his 
power  to  have  the  damage  ascertained  according  to  the  mode 
provided  for.^^^ 

In  Wolff  V.  Liverpool  &  L.  &  G.  Ins.  Co.,  the  fact  tliat 
two  appraisers  had  been  appointed  under  a  stipulation  in  a 
policy  making  arbitration  a  condition  precedent  to  suit,  but 
liad  gone  no  further  and  had  made  no  award,  Avas  held  fatal 
to  plaintiff's  right  to  recover;  and  in  Carroll  v.  Girard  Fire 
Ins.  Co.,  the  supreme  court  of  California  held  that  under 
a  similar  stipulation  a  complaint  which  showed  a  disagree- 
ment stated  no  cause  of  action  unless  it  either  pleaded 
an  award,  or  the  fact  that  a  fair  award  had  been  prevented 
by  the  fraudulent  conduct  of  the  insurer.  In  Hood  v.  Harts- 
horn, three  arbitrators  had  been  appointed  but  had  failed 
to  agi'ee  under  a  stipulation  in  a  lease  to  the  effect  that 
the  lessee  should  receive  from  the  lessor  the  amount  found 
by  them  to  be  the  value  of  his  improvements.     The  court 

1"^  United  States  v.  Robeson,  9  Pet.  (U.  S.)  319;  Read  v.  State  Ins. 
Co.,  103  Iowa,  307,  72  N.  W.  665;  Davenport  v.  Long  Island  Ins.  Co., 
10  Daly  (N.  Y.),  535;  Wolff  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  50  N.  J. 
Law,  453;  Carroll  v,  Girard  Fire  Ins.  Co.,  72  Cal.  297;  Yendel  v. 
Western  Assur.  Co.,  21  Misc.  Rep.  349,  47  N.  Y.  Supp.  141;  Hood  v. 
Hartshorn,  100  Mass.  117;  Levine  v.  Lancashire  Ins.  Co.,  66  Minn. 
138,  68  N.  W.  855.  "If  the  contract  provides  for  arbitration,  and  the 
appraisers  severally  appointed  by  the  company  and  the  insured  fail 
to  agree  on  a  third,  this  does  not  justify  suit.  The  insured  should 
propose  a  new  selection  of  appraisers."    May,  Ins.  §  496b. 

In  Davenport  v.  Long  Island  Ins.  Co.,  10  Daly  (N.  Y.),  535,  two  ap- 
praisers, who  had  been  appointed,  had  failed  to  agree  upon  a  third. 
The  insured  then  brought  his  action.  The  court  held  that,  as  arbitra-  ■ 
tion  was  a  condition  precedent,  the  action  could  not  be  maintained, 
sayiug:  "I  do  not  think  that  the  plaintiff  has  complied  with  the  rule, 
*  *  *  which  requires  him  to  do  everything  in  his  power  to  have 
the  agreement  carried  into  effect,  and  the  damage  ascertained  in  the 
mode  provided  for  in  the  contract.  Having  been  notified  by  the  ap- 
praiser selected  by  him  of  the  failure  of  the  two  selected  to  agree 
upon  a  third  as  an  umpire,  it  was  his  duty  at  least  to  propose  to  tho 


64lQ  arbitkation  and  award.  §  215 

said:  "In  the  present  case  no  appraisers  are  named  [in 
the  contract],  but  each  party  is  to  act  in  their  selection.  If 
then  one  set  of  appraisers  fail  to  agree,  or  if  they  act  in  such 
a  manner  as  to  render  them  absolutely  unfit  to  decide  the 
matter,  another  appointment  should  be  made;  and  a  fair  in- 
terpretation of  the  contract  requires  tlie  lessee  to  use  all 
reasonable  efforts  in  his  power  in  order  to  obtain  suitable 
appraisers  who  will  agree.  He  must  continue  to  act  until 
he  puts  the  lessor  in  the  wrong,  or  else  makes  it  manifest 
that  no  suitable  persons  can  be  obtained  to  do  the  service  with- 
in a  reasonable  time." 

This  rule  may  not  apply  where  arbitration  is  not  a  condi- 
tion precedent  to  the  insured's  right  of  action,  but  is  simply 
an  optional  right  of  which  either  party  may  avail  himself. 
There  is  then  no  greater  duty  resting  upon  the  insured  to 
secure  an  arbitration  and  an  award  than  there  is  upon  the 
defendant.  After  an  agreement  had  been  signed,  it  would  bo 
the  duty  of  both  parties  to  act  in  good  faith  to  have  the  loss 
ascertained  as  provided  in  the  policy  and  if  either  party, 
either  personally  or  through  his  appraiser,  prevented  such 
ascertainment  by  refusing  to  proceed,  or  by  insisting  upon 
the  selection  of  an  improper  umpire,  or  by  undue  interfer- 
ence after  the  umpire  had  been  selected,  or  in  any  other  way, 
the  opposite  party  would  be  thereby  absolved  from  further 
obligation  to  arbitrate.  If  such  fraud  were  attributable  to  the 
insured,  it  would  be  a  defense  to  any  action  on  the  policy ;  if 
to  the  insurer  the  lack  of  an  award  would  not  be  available  as  a 
defense  to  defeat  a  recovery.  If  both  parties  had  done  all 
that  could  reasonably  be  expected  of  them  to  secure  an  award, 

defendants  that  they  should  each  select  new  appraisers,  that  the  con- 
dition precedent  might  in  good  faith  be  complied  with." 

See,  also,  dissenting  opinion  of  Judge  Sanborn  in  Western  Assur. 
Co.  V.  Decker,  98  Fed.  381,  39  C.  C.  A.  383,  29  Ins.  Law  J.  312. 


§  215  FAILURE   OF   ARBITEATORS   TO   AGREE.  6^7 

there  woiild  be  no  breach  of  duty  on  the  part  of  either  of 
which  the  other  could  complain  and  they  would  be  relegated  to 
the  ordinary  remedy  at  law.-^^^ 

The  insured  performs  his  duty  in  attempting  to  have  an  ap- 
praisement pursuant  to  a  submission,  by  making  reasonable 
efforts  to  get  the  attendance  of  the  arbitrator  of  the  insurer 
at  a  meeting  with  his  OAvn  arbitrator,  and  by  serving  notice 
on  the  insurer  of  a  proper  time  and  place  of  meeting.  ^^^  In 
a  North  Carolina  case  the  arbitrators  were  duly  appointed, 
but  disagreed,  and  refused  to  go  on,  and  finally  separated 
without  making  an  award.  Subsequent  attempts  to  agree 
upon  another  board  failed,  and  the  court  laid  do\vn  the  rule 
that  where  the  arbitrators  or  a  majority  of  them  failed  to  agree 
upon  an  award,  the  insured,  in  the  absence  of  any  evidence  of 
bad  faith  or  improper  conduct,  is  not  compelled  to  submit  to 
another  arbitration  and  another  delay,  but  may  forthwith  bring 
his  action  in  the  courts. ^^^  Where  the  arbitrators  properly 
chosen  are,  after  the  investigation  of  the  loss  in  question,  un- 
able to  agi-ee  and  refuse  to  go  further,  it  is  not  unreasonable 
for  the  insured  to  refuse  to  enter  on  a  second  arbitration  pro- 
posed a  month  later  by  the  insiu'er,  unless  the  latter  will  con- 
sent to  waive  a  condition  in  the  policy  that  damages  shall  not 
become  due  until  sixty  days  after  notice  of  the  amoimt 
awarded. "2  Some  policies  provide  for  a  new  arbitration  in 
case  of  failure  of  the  first  attempt.     In  such  case  the  second 

"■^  Harrison  v.  German-American  Fire  Ins.  Co.,  67  Fed.  577;  Con- 
necticut Fire  Ins.  Co.  v.  Hamilton,  8  C.  C.  A.  114,  59  Fed.  265;  West- 
ern Assur.  Co.  V.  Hall,  120  Ala.  547,  24  So.  939;  Western  Assur.  Co. 
V.  Decker,  98  Fed.  381,  39  C.  C.  A.  383,  29  Ins.  Law  J.  312. 

""Harrison  v.  German-American  Ins.  Co.,  67  Fed.  577. 

"^  Pretzfelder  v.  Merchants'  Ins.  Co.,  116  N.  C.  496. 

^  Michel  V.  American  Cent.  Ins.  Co.,  17  App.  Div.  87,  44  N.  Y. 
Supp.  832. 


64:8  ARBITRATION    AND   AWARD.  §  216 

demand  and  proper  effort  to  secure  an  award  pursuant  thereto 
are  as  essential  as  the  first,  where  these  latter  have  proved 
futile."^ 

Who  Bound  by  Award. 

§  216.  An  arbitration  and  award  binds  only  those  parties 
who  have  been  properly  requested  or  notified  to  join  in  it,  and 
those  parties  who  have  actually  participated  in  the  proceed- 
ings. 

AU  parties  interested  in  the  loss,  and  whose  riglits  are 
recognized  in  the  policy,  or  have  been  recognized  by  the  in- 
surer and  insured,  should  be  requested  to  join  in  the  ap- 
praisal. The  appraisal  and  award  will  bind  only  those  par- 
ties who  have  been  properly  notified  and  requested  to  join  in, 
or  those  who  have  actually  joined  in  them.  A  mortgagee  is 
entitled  to  be  a  party  to  an  arbitration  on  a  loss  under  an 
insurance  policy  taken  out  by  the  mortgagor  and  delivered  to 
him  with  an  indorsement  that  the  loss,  if  any,  should  be  pay- 
able to  the  mortgagee  as  his  interest  may  appear,  or  to  a 
specified  amount,  Avhere  the  policy  pro\ddes  for  an  arbitra- 
tion on  the  request  of  either  party.  And  an  arbitration 
and  award  by  the  mortgagor  and  insurer  without  notice  to 
the  mortgagee  and  without  his  participation  does  not  bind 
the  latter. ^^"^  But  an  award  as  to  the  amoimt  of  a  loss  made 
under  an  agreement  between  the  company  and  the  insured, 
is,  until  vacated  for  fraud  or  other  sufficient  reason,  binding 

»"  Russell  V.  North  American  Ben.  Ass'n,  116  Mich.  699,  75  N.  W. 
137. 

"* Bergman  v.  Commercial  Assur.  Co.,  92  Ky.  494,  15  L.  R,  A.  270; 
Georgia  Home  Ins.  Co.  v.  Stein,  72  Miss.  943;  Hathaway  v.  Orient 
Ins.  Co.,  134  N.  Y.  409,  17  L.  R.  A.  514;  Hall  v.  Fire  Ass'n  of  Phila- 
delphia, 64  N.  H.  405;  Brown  v.  Roger  Williams  Ins.  Co.,  5  R.  I.  394. 
Contra,  Chandos  v.  American  Fire  Ins.  Co.,  84  Wis.  184,  19  L.  R.  A. 
321;  Wunderlich  v.  Palatine  Fire  Ins.  Co.,  104  Wis.  395,  80  N.  W.  474. 


§  217  VALIDITY   AND    EFFECT    OF    AWARD.  6i9 

upon  the  mortgagee  to  whom  the  loss  is  made  payable,  Avhere 
he  participated  in  the  arbitration,  ^^^ 

Validity  and  Effect  of  Award. 

§217.  An  award  made  by  the  appraisers  in  substantial  accord- 
ance with  the  terms  and  requirements  of  the  submission  to 
them,  is  prima  facie  valid  and  binding  upon  the  insured  and 
insurer  as  to  all  matters  acted  upon  by  the  appraisers  within 
the  scope  of  their  powers  and  duties. 

Any  award  may  be  set  aside  by  the  courts  upon  a  proper 
showing. 

Where  insurer  and  insured  pursuant  to  the  provisions  of 
a  policy  enter  into  a  written  contract  submitting  the  amount 
of  the  loss  or  damage  to  a  board  of  appraisers  properly  chosen, 
and  proceedings  are  honestly  and  fairly  conducted  under  such 
contract  of  submission  finally  terminating  in  an  award,  such 
award  is  valid  and  binding  on  them.  By  it  the  parties  are 
iDOund ;  and  to  the  amount  awarded  the  insured  is  limited  in 
his  right  to  recover,  unless  such  fraud  or  improper  conduct 
or  procedure  is  shown  as  will  in  law  avoid  the  effect  of  the 
award. ^^^  The  award  need  not  conform  to  the  statutory  pro- 
visions regulating  arbitration  unless  specially  included  within 
such.^^'^  It  is  not  essential  that  it  should  l^e  accepted  or  acted 
upon  by  the  parties  in  order  to  make  it  effective  and  con- 
clusive.-^^^  Nor  is  it  rendered  contingent  by  the  fact  that  an 
agent  acting  for  one  of  the  parties  failed  to  furnish  formal 
evidence  of  his  authority  in  advance. -^^^ 

"'  Scania  Ins.  Co.  v.  Johnson,  22  Colo.  476,  45  Pac.  431,  25  Ins.  Law 
J.  525;  2  Wood,  Fire  Ins.  370. 

"•Burchell  v.  Marsh,  17  How.  (IT.  S.)  344;  Hanover  Fire  Ins.  Co.  v. 
Lewis,  28  Fla.  209;  Springfield  F.  &  M.  Ins.  Co.  v.  Payne,  57  Kan.  291. 
46  Pac.  315;  Scania  Ins.  Co.  v.  Johnson,  22  Colo.  476,  45  Pac.  431; 
Hartwell  v.  Penn  Fire  Ins.  Co.,  60  N.  H.  293. 

"'  Enright  v.  Montauk  Fire  Ins.  Co.,  15  N.  Y.  Supp.  893. 

""Hanover  Fire  Ins.  Co.  v.  Lewis.  28  Fla.  209,  10  So.  297. 

"» Royal  Ins.  Co.  v.  Roodhouse,  25  111.  App.  61. 


650  ARBITRATION    AND    AWARD.  §  217 

The  arbitrators  must  decide  the  Tvliole  matter  submitted 
to  them.  The  award  must  be  certain,  final  and  conclusive 
and  must  not  extend  to  matters  not  comprehended  in  the  sub- 
mission. An  award  uncertain  as  to  the  amount  of  damages 
is  void.  ^  2^  It  is  also  void  unless  it  includes  all  matters  em- 
braced in  the  submission,  as  where  the  arbitrators  only  ap- 
praised a  portion  of  the  articles  damaged  and  undertook  to 
determine  that  certain  other  articles  enumerated  in  the  sub- 
mission were  not  covered  by  the  policy. -^^^  A  mere  assump- 
tion of  unauthorized  powers  by  the  arbitrators  will  not  affect 
the  validity  of  an  award  properly  arrived  at  within  the  lines- 
of  their  duty.-^^^  A  valid  award  is  binding  upon  both  parties 
although  a  submission  to  appraisers  was  not  a  condition  pre- 
cedent to  the  commencement  of  the  action  because  neither 
party  had  made  a  written  demand  therefor  as  required  by  the 
policy. ^^^  An  award  is  not  valid  when  arrived  at  by  the  um- 
pire and  only  one  appraiser  without  any  showing  of  difference 
between  the  two  appraisers.  It  is  necessary  that  there  be 
action  by  both  of  the  appraisers,  conference  together  and  a 
result  reached  if  possible  by  their  combined  action.  The 
umpire  has  no  authority  to  act  except  when  the  appraisers 
differ  in  their  estimates. -^^^ 

""  St.  Paul  F.  &  M.  Ins.  Co.  v.  Gotthelf,  35  Neb.  351,  53  N.  W.  137; 
Carnochan  v.  Christie,  11  Wheat.  (U.  S.)  446;  Chandos  v.  American 
Fire  Ins.  Co.,  84  Wis.  184,  54  N.  W.  390;  York  &  C.  R.  Co.  v,  Myers, 
18  How,  (U.  S.)  246. 

"^  Thompson  v.  Blanchard,  2  Iowa,  44;  Adams  v.  New  York  Bowery- 
Fire  Ins.  Co.,  85  Iowa,  6,  51  N.  W.  1149. 

'"  Nichols  V.  Rensselaer  County  Mut.  Ins.  Co.,  22  Wend.  (N.  Y.) 
125. 

1"  Springfield  F.  &  M.  Ins.  Co.  v.  Payne,  57  Kan.  291,  46  Pac.  315. 
See  ante,  "When  Award  Condition  Precedent." 

^^'^  Manufacturers'  &  B.  Fire  Ins.  Co.  v.  Mullen,  48  Neb.  620,  67 
N.  W.  445;  Caledonian  Ins.  Co.  v.  Traub,  83  Md.  524,  35  Atl.  13;  Hills 
V.  Home  Ins.  Co.,  129  Mass.  345,  9  Ins.  Law  J.  814.  But  see  Broad- 
way Ins.  Co.  V.  Doying,  55  N.  J.  Law,  569. 


§  217  VALIDITY    AND    EFFECT    OF    AWARD.  C51 

In  a  Wisconsin  case  the  policy  described  the  property  in- 
sured as  "a  pulp-mill  and  the  machinery  therein"  and  provided 
for  a  decision  by  arbitrators  as  to  the  amount  of  loss.  A  fire 
occurred  damaging  the  j^roperty  insured  and  also  a  tram-way 
connected  with  and  used  with  it.  A  disagreement  as  to  the 
extent  of  damage  existing,  a  reference  was  made  to  arbitrators 
who  did  not  include  in  their  aAvard  any  damage  on  account  of 
the  tram-way  which  was  not  included  in  the  schedules  sub- 
mitted to  them  nor  was  it  called  to  their  attention.  The 
award  was  held  valid,  since  there  was  nothing  in  the  descrip- 
tion of  the  property  that  would  suggest  a  tram-way,  and 
since  it  was  the  fault  of  the  insured  that  the  tram-way  was  not 
considered  if  it  ought  to  have  been.^"^ 

A  recovery  is  not  limited  to  the  amount  of  the  award 
which  through  the  fault  of  the  adjuster  for  the  insurer  in- 
cludes only  damages  to  such  goods  as  were  visible  at  the  time 
of  the  appraisement.  In  such  case  the  insured  can  recover 
the  loss  on  goods  covered  by  the  policy  and  not  examined  by 
the  appraisers  ;^^^  at  least  where  the  insured  was  not  to 
blame  for  failure  to  have  the  entire  loss  appraised  and  no  new 
appraisal  was  permitted  by  the  insurer. ^^^  An  award  signed 
when  incomplete  in  reliance  upon  the  assurance  of  the  ad- 
justers for  the  insurer,  and  in  misapprehension  of  the  true 
facts,  is  not  conclusive  upon  the  insured.  ^^^ 

"Where  an  award  is  pleaded  as  the  basis  of  an  action,  or  as 
matter  of  defense  to  a  suit  brought  on  the  policy,  the  opposing- 
party  may  plead  and  prove  facts  avoiding  it ;  and  the  one  so 
doing  takes  upon  himself  the  burden  of  proving  facts  which 

'"  Chandos  v.  American  Fire  Ins.  Co.,  84  Wis.  184,  54  N.  W.  390. 
'=•  Hong  Sling  v.  Scottish  U.  &  N.  Ins.  Co.,  7  Utah,  441,  27  Pac.  170. 
"'  Lang  V.  Eagle  Fire  Co.,  12  App.  Div.  39,  42  N.  Y.  Supp.  539. 
•"Herndon  v.  Imperial  Fire  Ins.  Co.,  110  N.  C.  279;   Bradshaw  v. 
Agricultural  Ins.  Co.,  137  N.  Y.  137. 


652 


ARBITRATION    AND   AWARD. 


§218 


constitute  groimcls  for  avoidance. ^^^^  The  death  of  the  in- 
sured after  submission  of  the  question  as  to  the  amount  of 
■damage  to  arbitrators  and  before  the  rendition  of  the  award, 
does  not  revoke  the  submission.  ^^"^ 

Setting  Aside  Award. 

§  218.  Every  presumption  exists  in  favor  of  the  honesty  and 
validity  of  an  award. 

It  will  only  be  set  aside  upon  clear  and  strong  proof  of  fraud, 
or  misconduct,  or  when  shown  by  such  proof  to  be  palpably 
and  manifestly  unfair,  unreasonable  and  injust. 

Arbitrators  are  judges  chosen  by  the  parties  to  decide  the 
matter  submitted  to  them  finally  and  without  appeal.  As  a 
mode  of  settling  disputes  arbitration  should  receive  every 
encouragement  from  the  courts.  If  the  award  is  within  the 
submission,  and  contains  the  honest  decision  of  the  arbitrators 
after  a  full  and  fair  hearing  of  the  parties,  a  court  will  not  set 
it  aside  either  for  error  of  law  or  of  fact.  A  contrary  course 
Avould  substitute  the  judgment  of  the  court  in  place  of  the 
judgment  of  those  chosen  by  the  parties  to  decide  the  con- 
troversy, and  would  make  the  award  the  commencement  and 
not  the  end  of  litigation. ^^^ 

An  award  will  not  be  set  aside  for  misrepresentation  in  its 
procurement,  where  the  insured  was  induced  to  sign  an 
agreement  to  submit  to  arbitration  by  the  misrepresentation 

"'Mosness  v.  German-American  Ins.  Co.,  50  Minn.  341;  Connecticut 
Fire  Ins.  Co.  v.  O'Fallon,  49  Neb.  740,  69  N.  W.  118;  Remington  Paper 
Co.  V.  London  Assur.  Corp.,  43  N.  Y.  Supp.  431;  Canfield  v.  Water- 
town  Fire  Ins.  Co.,  55  Wis.  419,  13  N.  W.  252. 

As  to  effect  of  award  by  committee  in  mutual  societies  as  a  bar 
to  a  right  of  action,  see  ante,  notes  3-8. 

"» Citizens'  Ins.  Co.  v.  Coit,  12  Ind.  App.  161,  39  N.  E.  766. 

'^^Stemmer  v.  Scottish  U.  &  N.  Ins.  Co..  33  Or.  65,  53  Pac.  498; 
Burchell  v.  Marsh,  17  How.  (U.  S.)  344;  Campbell  v.  American 
Popular  Life  Ins.  Co.,  2  Bigelow,  Life  &  Ace.  Cas.  25,  1  MacArthur, 
D.  C.  471. 


§  218  SETTIXG    ASIDE    AWARD.  653 

of  the  agent  of  tlie  insurer  that  such  a  proceeding  was  neces- 
sary, when  thereafter,  and  before  signing  the  submission,  he 
had  the  opportunity  to  examine  the  policy  and  ascertain  its. 
contents  ;^^^  nor  because  it  was  procured  by  misrepresentation 
of  law,  nor  because  of  the  partiality  of  the  arbitrator  of  which 
the  parties  had  knowledge  prior  to  the  making  of  the  award. 
The  proper  remedy  of  the  insured  would  be  to  revoke  the  sub- 
mission before  the  award  w^as  made.-^"^^  But  an  award  will  be 
set  aside  by  the  courts  at  the  suit  of  a  party  not  himself  at 
fault  upon  a  proper  showing  that  the  other  party  has  been 
guilty  of  fraud,  or  conspiracy,  or  misconduct,  either  per- 
sonally, or  by  the  agent,  or  appraiser  selected  to  act  and  acting- 
for  him.  Until  so  set  aside  the  award  fixes  the  amount  of 
recovery  absolutely.  Every  presumption  must  be  made  in 
favor  of  the  honesty  and  fairness  of  the  award,  and  it  should 
not  be  set  aside  except  upon  clear  and  strong  proof. •^^'* 

If  the  material  facts  in  an  action  to  set  aside  an  award  are 
founded  upon  transactions  and  conversations  between  and 
within  the  exclusive  knowledge  of  two  persons  who  flatly  con- 
tradict each  other,  the  relief  sought  must  be  denied,  since  na 
more  credit  can  be  given  in  such  case  to  the  one  who  alleges 
a  fact  than  to  him  who  denies  it.^'"'^  The  fact  that  the  ar- 
bitrators agree  as  to  the  extent  of  the  damage  is,  in  the 
absence  of  any  showing  of  conspiracy  or  collusion,  almost 
conclusive  evidence  of  good  faith  and  fair  dealing. ^^^ 

"-  Wheeler  v.  Watertown  Fire  Ins.  Co.,  131  Mass.  1. 

"'Indiana  Ins.  Co.  v.  Brehm,  88  Ind.  578;  Virginia  Home  Ins.  Co. 
V.  Gray,  61  Ga.  515. 

"*  Mosness  v.  German-American  Ins.  Co.,  50  Minn.  348;  Levine  v. 
Lancashire  Ins.  Co.,  66  Minn.  147;  Brush  v.  Fisher.  70  Mich.  469,  SS 
N.  W.  446;  Overby  v.  Thrasher,  47  Ga.  10;  Liverpool  &  L.  &  G.  Ins. 
Co.  V.  Goehring,  99  Pa.  St.  13;  Connecticut  Fire  Ins.  Co.  v.  O'Fallon, 
49  Neb.  740,  69  N.  W.  118. 

"'Tilton  V.  United  States  Life  Ins.  Co.,  8  Daly  (N.  Y.),  84. 

''"  Chanaos  v.  American  Fire  Ins.  Co.,  84  Wis.  184,  54  N.  W.  390. 


654  AKUITEATION    AND    AWARD.  §  218 

It  must  always  be  borne  in  mind  tliat  the  arbitrators  are  not 
bound  by  tbe  same  strict  rules  that  govern  judicial  procedure ; 
thus  an  award  is  not  defective  because  the  arbitrators  or  the 
umpire  were  not  sworn,  unless  the  submission  requires  the 
award  to  be  made  under  oath;^^'^  nor  because  the  arbitrators 
excluded  evidence  that  would  be  admissible  in  a  court  of 
law;^^^  nor  because  they  consulted  experts  and  made  personal 
investigation  of  facts  concerning  matters  in  dispute,  apart 
from  the  evidence  produced  by  either  party.  ^^^  But  both  par- 
ties are  entitled  to  a  fair  hearing,  and  to  introduce  evidence  as 
to  the  amount  of  loss  or  damage,  and  the  exclusion  of  perti- 
nent and  material  evidence  by  the  arbitrators  is  usually  fatal 
to  the  award  where  it  appears  probable  that  prejudice  resulted 
to  either  party. •^'^'^ 

Errors  in  receiving  improper  evidence,  or  in  excluding  evi- 
dence which  would  be  admissible  in  a  court  of  law,  are  not 
alone  sufficient  grounds  for  setting  aside  an  award,  providing 
the  appraisers  have  given  their  honest  judgment  on  the  subject 
matter  after  a  full  and  fair  hearing. ^^^  The  mere  statement 
of  the  insured  to  the  appraisers  that  he  was  willing  to  pro- 
duce witnesses  on  value,  and  the  reply  of  the  appraisers  that 
if  they  needed  they  would  get  witnesses  themselves,  are  not 
sufficient  to  put  the  appraisers  in  the  position  of  rejecting 
relevant  evidence.  ^^^  An  action  may  be  properly  brought 
to  set  aside  an  award  and  to  recover  on  the  policy.     All  the 

"'Zallee  v.  Laclede  Mut.  F.  &  M.  Ins.  Co.,  44  Mo.  530;  Hall  v.  Nor- 
walk  Fire  Ins.  Co.,  57  Conn.  105;  Remelee  v.  Hall,  31  Vt.  583. 

^'^  Raymond  v.  Farmers'  Mut.  Ins.  Co.,  114  Mich.  386,  72  N.  W.  255. 
See  cases  supra. 

^^  Morse,  Arbitration,  143;  Bangor  Sav.  Bank  v.  Niagara  Fire  Ins. 
Co.,  85  Me.  68,  20  L.  R.  A.  650. 

^*°  Mosness  v.  German-American  Ins.  Co.,  50  Minn.  347. 

***Burcliell  v.  Marsh,  17  How.  (U.  S.)  344.     See  cases  supra. 

^*^  Stemmer  v.  Scottish  U.  &  N.  Ins.  Co.,  33  Or.  65,  53  Pac.  498. 


§  218  SETTING    ASIDE   AWARD. 


G55 


relief  souglit  can  be  granted  in  tlie  same  action  and  an  arLi- 
trator  is  a  comi:)etent  witness  upon  tlie  trial  of  such  an  action 
and  can  testify,  to  matters  concerning  the  appraisal. ^^^ 

Neither  error  of  judgment  on  the  part  of  the  appraisers, 
nor  a  mistake  of  fact  made  by  them  in  ai-riving  at  a  conclusion, 
■will  justify  the  setting  aside  of  an  award  unless  the  error  be 
clearly  prejudicial,  or  the  mistake  gross  or  palpable.^**  But 
an  appraisal  will  be  set  aside  where  it  is  grossly  below  the 
actual  loss  sustained  and  it  appears  that  one  of  the  appraisers 
was  not  disinterested. ^^^  'The  party  who  seeks  to  set  aside 
an  award  upon  the  ground  of  mistake  must  show  from  the 
award  itself  that  but  for  the  mistake  the  aw^ard  would  have 
been  different.  *  *  *  The  merits  of  an  award,  however 
unreasonable  or  unjust  it  may  be,  cannot  be  re-investigated, 
for  otherwise  the  award,  instead  of  being  the  end  of  litigation, 
would  simply  be  a  useless  step  in  its  progress.  *  *  *  In 
the  absence  of  proof  of  corruption,  bad  faith,  or  misconduct 
on  his  [the  arbitrator's]  part,  or  palpable  mistake  appearing 
on  the  face  of  the  estimate,  neither  party  can  be  allowed  to 
prove  that  he  decided  wrong  as  to  the  law  or  facts."^'*^ 

When  a  false  statement  is  made  in  regard  to  the  attitude  of  a 
proposed  appraiser  for  the  purpose  of  inducing  consent  to  his 
appointment  w'hich  is  in  fact  in  that  way  obtained,  and  where 
concealment  is  practiced  in  regard  to  his  real  attitude  to  the 
party  nominating  him,  and  when  in  fact  he  is  not  disinter- 
ested, good  ground  is  shown  for  setting  aside  an  appraisal 
which  is  grossly  below  the  actual  loss  sustained  although  it  has 

1"  Levine  v.  Lancashire  Ins.  Co.,  66  Minn.  147. 

*"  Bates  V.  British  American  Assur.  Co.,  100  Ga.  249,  28  S.  E.  155; 
Liverpool  &  L.  &  G.  Ins.  Co.  v.  Goehring,  99  Pa.  St.  13. 

»«  Royal  Ins.  Co.  v.  Parlin  &  0.  Co.,  12  Tex.  Civ.  App.  572,  34  S.  W. 
401. 

"'  Sweet  V.  Morrison,  116  N.  Y.  19,  33,  quoted  in  Remington  Paper 
Co.  V.  London  Assur.  Corp.,  12  App.  Div.  218,  43  N.  Y.  Supp.  431. 


656  ARBITKATION    AND    AWARD.  §  218 

been  concurred  in  and  agreed  to  by  the  appraiser  nominated 
by  the  other  party.  •^'^^  Within  this  rule  an  appraiser  is  not 
''disinterested"  where  he  has  been  frequently  employed  by 
the  company  in  the  case  as  well  as  by  other  companies  to  es- 
timate losses,  and  where  his  opinion  dominated  that  of  the 
appraiser  chosen  by  the  insured,  and  the  appraisal  is  miich 
below  the  actual  loss.-^^^  The  fact  that  the  arbitrator  ap- 
pointed by  the  insurer  was  instrumental  in  having  an  incom- 
petent umpire  selected  whom  he  practically  controlled,  and 
that  he  refused  to  examine  or  consider  the  evidence  offered 
by  the  insured  as  to  the  amount  of  his  loss,  justified  setting 
aside  the  award. ^^^  And  the  suppression  of  evidence  neces- 
sary and  material  to  the  proper  estimation  of  the  extent  of 
the  loss,  and  the  withholding  of  books  of  account  showing  the 
cost  of  construction  of  the  destroyed  property  by  the  book- 
keeper of  the  insured  without  the  knowledge  or  consent  of  his 
principal,  is  a  sufficient  ground  for  setting  aside  an  award  on 
the  ground  of  fraud  in  suppressing  and  withholding  evidence. 
"The  books  Avould  have  afforded  some  information  to  the 
defendant,  and  to  that  information  it  was  entitled,  not  only 
under  the  terms  of  the  policy  issued  by  it  [defendant  to  the 
plaintiff],  but  also  ujdou  the  plainest  principles  of  right  and 

"'Bradshaw  v.  Agricultural  Ins.  Co.,  137  N.  Y.  137;  Kiernan  v. 
Dutchess  County  Mut.  Ins.  Co.,  150  N.  Y.  190;  Glover  v.  Rochester- 
German  Ins.  Co.,  11  Wash.  143;  Niagara  Fire  Ins.  Co.  v.  Bishop,  154 
111.  9;  Adams  v.  New  York  Bowery  Fire  Ins.  Co.,  85  Iowa,  6;  Hart- 
ford Fire  Ins.  Co.  v.  Bonner  Mercantile  Co..  44,  Fed.  151.  On  question 
of  interest  of  arbitrator,  see  Union  Ry.  Co.  v.  Dull,  124  U.  S.  173,  8 
Sup.  Ct.  433. 

1^  Kiernan  v.  Dutchess  County  Mut.  Ins.  Co.,  150  N.  Y.  190.  See, 
also,  Levine  v.  Lancashire  Ins.  Co.,  66  Minn.  147;  Royal  Ins.  Co.  v. 
Parlin  &  O.  Co.,  12  Tex.  Civ.  App.  572,  34  S.  W.  401. 

"'  Levine  v.  Lancashire  Ins.  Co.,  66  Minn.  147,  68  N.  W.  855,  26  Ins. 
Law  J.  36;  Springfield  F.  &  M.  Ins.  Co.  v.  Payne,  57  Kan.  291,  46  Pac. 
315. 


§  218  SETTING    ASIDE    AWARD.  657 

fair  dealing;  and  tlie  plaintiff  cannot  be  permitted  to  enforce 
an  agreement  wbicli  *  *  *  would  never  have  been  made 
but  for  the  fraud  of  plaintiff's  agent  in  withholding  such  in- 
formation from  the  defendant — an  agreement  by  which^  under 
the  findings  of  the  court,  *  *  *  the  defendant  agreed 
to  pay  more  than  the  value  of  the  property  destroyed." ^^'^ 
And  whether  or  not  the  party  has  acted  fairly  or  unfairly, 
honestly  or  dishonestly  in  the  matters  connected  with  the  ap- 
praisal is  usually  a  question  for  the  jury.^^^ 

Effect. 

Where  by  the  terms  of  the  policy  arbitration  is  a  condition 
precedent  to  a  right  of  action,  and  an  award  is  set  aside 
for  fault  or  misconduct  of  the  arbitrators  not  participated  in 
or  caused  by  the  insurer,  the  agreement  for  an  appraisement 
still  remains  in  force,  and  a  new  appraisement,  if  circum- 
stances have  not  rendered  that  impossible,  will  still  be  a  con- 
dition precedent  to  a  right  of  action,  unless  Avaived.^^-  But 
upon  the  familiar  rule  that  no  man  can  take  advantage  of  his 
own  wrong,  an  insurer,  to  whose  fraud  or  misconduct  the 
setting  aside  or  failure  of  an  award  is  attributable,  will  not 
be  allowed  to  interpose  the  plea  of  no  award  ;  and  for  a  similar 
reason  if  the  setting  aside  or  failure  of  the  award  be  at- 
tributable solely  to  ths  fault  of  the  insured,  the  insurer  is 
under  no  obligation  to  consent  to  a  new  submission.  ^^^  Where 

''^  Stockton  Combined  H.  &  A.  Works  v.  Glens  Falls  Ins.  Co.,  98 
Cal.  557. 

"'Uhrig  V.  Williamsburgh  City  Fire  Ins.  Co.,  101  N.  Y.  365;  Liver- 
pool &  L.  &  G.  Ins.  Co.  V.  Goehring,  99  Pa.  St.  13;  Rademacher  v. 
Greenwich  Ins.  Co.,  75  Hun,  83,  27  N.  Y.  Supp.  155. 

"'Hiscock  V.  Harris,  80  N.  Y.  402;  Uhrig  v.  Williamsburgh  City 
Fire  Ins.  Co.,  101  N.  Y.  362;  Levine  v.  Lancashire  Ins.  Co.,  66  Minn. 
T47. 

'"'Braddy  v.  New  York  Bowery  Fire  Ins.  Co.,  115  N.  C.  354;  Chap- 
man V.  Rockford  Ins.  Co.,  89  Wis.  572,  62  N.  W.  422;  Brock  v.  Dwel- 

KERR,  INS.— 42 


658  ARBITRATION    AND    AWARD.  §§  219,  220 

an  award  has  been  made,  wliicli  tlie  insured  claims  was 
fraudulent  and  void,  and  rejected  it  in  consequence,  and  so 
notified  tlie  insurer,  the  failure  of  the  latter  to  ask  for  or  sug- 
gest a  new  appraisement  and  its  insistence  on  the  validity  of 
the  award  already  made,  both  before  suit  and  in  its  answ^er 
after  action  brought  to  recover  on  the  policy,  constitute  a 
w^aiver  of  the  right  to  a  new  appraisement. -^^^ 

Effect  of  Demanding  or  Participating  in  Award. 

§  219.  The  effect  of  a  demand  for  or  a  submission  to  arbitra- 
tion as  to  the  amount  of  loss  upon  other  rights  or  defenses  of 
the  parties  depends  upon  the  particular  terms  of  the  contract 
and  the  agreement  for  submission,  construed  in  the  light  of  the 
dealings  of  the  parties  with  each  other  and  the  facts  and  cir- 
cumstances of  each  case. 

§  220.  A  demand  for  §,  submission  often  waives 

(a)  Stipulations  regulating  the  time  within  which 

suit  must  be  brought,  or 

(b)  Stipulations  giving  to  the  insurer  the  right  to  re- 

build the  damaged  property,  unless  the  effect 
of  such  stipulations  is  specially  reserved  and 
protected. 

The  mere  submission  of  the  amount  of  a  loss  to  arbitration 
is  not  of  itself  an  admission  by  the  insurer  that  any  liability 
existed  against  it  under  a  policy  covering  the  loss,  nor  does 
it  raise  an  implied  promise  on  the  part  of  the  insurer  to  pay 
the  amount  of  the  award.  The  distinction  between  adjust- 
ing the  amount  of  damage  done  and  the  sum  for  which  the 
insurer  is  liable,  is  very  apparent.  In  the  first  case  there 
would  be  a  recognition  of  the  extent  of  damage  done  by  the 
fire;  in  the  latter  a  recognized  liability  properly  adjusted. ^'^^ 

ling  House  Ins.  Co.,  102  Mich.  583;  Powers  Dry  Goods  Co.  v.  Imperial 
Fire  Ins.  Co.,  48  Minn.  389. 

'^*  Levine  v.  Lancashire  Ins.  Co.,  66  Minn.  147;  Adams  v.  New  York 
Bowery  Fire  Ins.  Co.,  85  Iowa,  6,  51  N.  W.  1149. 

'"Willoiighby  v.  St.  Paul  German  Ins.  Co.,  68  Minn.  375;  2  Wood, 
Fire  Ins.  §  450. 


§§  219,  220       DEMANDING    OR    PARTICIPATING    IN    AWARD.  G59 

An  arbitration  and  award  merely  as  to  the  amount  of  the 
loss,  even  if  procured  at  the  instance  of  the  insurer,  does  not 
interfere  Avith  its  right  subsequently  to  deny  liability  upon 
the  gi-ound  that  the  policy  was  void  for  reasons  known  to  the 
assured  at  the  time  when  the  arbitration  was  instituted ;  espe- 
cially where  the  policy  contains  a  stipulation  that  the  arbitra- 
tion and  award  "shall  not  decide  the  liability  of  the  com- 
pany."^^^  "Where  the  policy  does  not  contain  any  limitation 
■as  to  the  effect  of  demanding  or  submitting  to  arbitration,  a 
demand  by  an  insurer  acquiesced  in  by  the  insured  for  arbi- 
tration according  to  the  manner  provided  in  the  policy  under 
Avhich  there  has  been  a  fire  loss  Avaives,  (a)  the  furnishing  of 
any  proofs  of  loss  by  the  insured,  or  (b)  any  defects  in  proofs 
Avhich  have  been  previously  furnished,  even  though  the  fur- 
nishing of  proofs  is  a  condition  precedent  to  the  maturing  of 
liability  ;^^'''  but  evidence  of  a  submission  has  been  held  in- 
suificient  proof  of  the  waiver  of  the  condition  requiring  in- 
sured to  furnish  a  particular  account  of  the  loss  upon  which 
to  charge  the  insurers  in  foreign  attachment  as  proceeds  of  the 
insurance  where  any  waiver  is  denied. ^^^  The  fact  that  an 
award  has  been  made  under  the  conditions  of  a  policy  will  not 
prevent  the  insurer  from  ■  thereafter  asserting  all  defenses 
otherwise  available  to  it  in  a  suit  upon  the  policy  which  pro- 
vides that  a  submission  to  arbitration  shall  not  be  considered  as 
a  Avaiver  of  any  of  the  rights  or  defenses  of  either  party.  ^°^ 

'■■'Briggs  V.  Firemans'  Fund  Ins.  Co.,  65  Mich.  52,  31  N.  AV.  616; 
Johnson  v.  American  Ins.  Co.,  41  Minn.  396. 

'"  George  Dee  &  Sons  Co.  v.  Key  City  Fire  Ins.  Co.,  104  Iowa,  167, 
73  N.  W.  594:  Home  Fire  Ins.  Co.  v.  Bean,  42  Neb.  537,  60  N.  W.  907;  ' 
Wallter  v.  German  Ins.  Co.,  51  Kan.  725,  33  Pac.  597;  Allemania  Fire 
Ins.  Co.  V.  Pitts.  Exposition  Soc.  (Pa.),  11  Atl.  572. 

"'Pettengill  v.  Hinks,  9  Gray  (Mass.),  169,  4  Bennett,  Fire  Ins. 
Cas.  227.  But  see  Allemania  Fire  Ins.  Co.  v.  Pitts.  Exposition  Soc. 
<Fa.),  11  Atl.  572. 

"•Mutual  Fire  Ins.  Co.  v.  Alvord  (C.  C.  A.),  61  Fed.  752. 


660  ARBITRATION    AND    AWARD.  §§  219,  220 

An  agi'eement  tliat  an  adjustment  shall  be  made  witlioiit 
reference  to  any  other  terms  or  conditions  of  the  policy  is  a 
reservation  of  the  question  of  liability.  ^^'^ 

Effect  on  Stipulations  Regulating  Time  to  Sue. 

Where  a  policy  provides  that  no  action  for  recovery  thereon 
can  be  maintained  unless  commenced  within  twelve  months 
next  after  the  fire,  and  that  no  condition  or  provision  of  the 
contract  or  any  forfeiture  thereof  shall  be  waived  by  any 
act  or  proceeding  relating  to  an  appraisal,  the  submission  of 
the  amount  of  damage  to  appraisers  does  not  excuse  the  f  ailuro 
to  bring  suit  within  the  required  time;  and  this  rule  is  not 
changed  by  the  insolvency  of  the  insurer  even  when  the  in- 
sured seeks  to  participate  in  the  proceeds  of  the  bankrupt  es- 
tate. ^^^  But  stipulations  that  no  suit  shall  be  brought  in 
case  of  disagreement  of  the  parties  as  to  the  amount  of  loss 
until  an  award  shall  have  been  made,  and  that  no  action  can  be 
maintained  unless  brought  within  six  months  after  a  loss 
occurs,  must  be  construed  together,  and  an  action  can  be  main- 
tained if  brought  within  six  months  after  the  award  has  been 
made  though  more  than  six  months  may  have  elapsed  since 
the  fire  took  place.  ^^^ 

Effect  on  Stipulation  Giving  Insurer  Right  to  Rebuild. 

The  submission  of  the  amount  of  loss  to  arbitrators  is  not 
in  itself  a  waiver  by  the  insurer  of  its  right  to  an  election  to 
rebuild  or  repair,  nor  does  it  exclude  the  possibility  of  a 

""Queen  Ins.  Co.  v.  Young,  86  Ala.  424. 

^'^  Willoughby  v.  St.  Paul  German  Ins.  Co.,  68  Minn.  373,  71  N.  W. 
272. 

^"Barber  v.  Fire  &  Marine  Ins.  Co.  of  Wheeling,  16  W.  Va.  658; 
Friezen  v.  Allemania  Fire  Ins.  Co.,  30  Fed.  352;  Vette  v.  Clinton  Fire 
Ins.  Co.,  30  Fed.  668;  Harrison  v.  Hartford  Fire  Ins.  Co.  (Iowa),  80^ 
N.  W.  309.    Compare  Johnson  v.  Humboldt  Ins.  Co.,  91  111.  92. 


§§  221,  222       WAIVER    OF    EIGHT    TO    ARBITRATION.  G61 

previous  waiver,  nor  amount  to  an  election  to  pay  tlie  loss,  nor 
does  it  affect  the  statns  of  the  parties  in  any  other  particular 
\vhere  the  policy  expressly  provides  that  the  appraisement  is 
mthout  reference  to  any  other  question. ^*'^  But  in  the  ab- 
sence of  any  such  provision  a  demand  by  the  insurer  for  arbi- 
tration precludes  it  from  afterwards  exercising  the  option  to 
repair  whether  an  award  was  reached  or  not.  Under  such 
a  policy  in  the  event  of  loss,  the  insurer  can  discharge  its 
obligation  in  two  ways:  (1)  by  repairing  or  rebuilding,  and 
(2)  by  the  payment  of  the  loss.  Without  arbitration  the  in- 
surer can •  ascertain  the  actual  loss;  and  this,  it  would  seem, 
is  quite  sufficient  to  enable  it  to  make  a  just  election  of  the 
method  it  will  pursue  in  making  the  damage  good.  An 
election  to  rebuild  is  a  waiver  of  the  right  to  arbitrate  and 
eo  instante  converts  the  policy  into  a  building  contract.  The 
demand  for  arbitration  is,  in  the  absence  of  any  restrictive 
stipulation,  an  election  to  make  payment.^*''* 

Waiver  of  Right  to  Arbitration. 

§  221.  The  right  to  take  advantage  of  the  provisions  of  a  pol- 
icy concerning  arbitration  may  be  waived  by  either  insurer  or 
insured,  either 

(a)  Expressly,  or 

(b)  By  words  or  conduct  from  which  an  intention  to 

abandon  the  right  is  properly  inferable,  e.  g. 

(1)  By  neglecting  or  refusing  to  comply  with 

the  terms  of  a  policy;  or 

(2)  By  improper  conduct  or  unreasonable  de- 

lay in  the  conducting  of  the  appraisal. 
§  222.  The  insurer  waives  its  right  to  demand  an  appraisal 
by  denying  liability  under  the  policy  before  the  time  to  de- 
mand an  arbitration  has  expired. 

'"Aetna  Ins.  Co.  v.  Piatt,  40  111.  App.  191;  Piatt  v.  Aetna  Ins.  Co., 
153  111.  113,  26  L.  R.  A.  853. 

"*  Wynkoop  V.  Niagara  Fire  Ins.  Co.,  91  N.  Y.  478;  Briggs  v.  Fire- 
mans'  Fund  Ins.  Co.,  65  Mich.  52,  31   N.  W.  616;    McAllaster  v.  Ni- 


662  AKBITRATION    AND    AWAKD.  §§  221,  222 

The  rights  of  both  insurer  and  insured  to  an  appraisal  and 
award,  whether  absohite  or  contingent  under  the  conditions 
of  the  policy,  are  subject  to  the  general  principles  of  the  lav/ 
of  waiver  and  estoj)pel.  The  Avords,  acts  or  conduct  of 
either  of  the  parties  or  both  of  them  may  be  such  as  in  the 
eyes  of  the  law  amount  to  a  waiver  Of  the  right  to  demand 
an  appraisal  and  award,  or  such  as  to  estop  both  parties  from 
insisting  upon  the  exercise  of  that  right.  The  waiver,  if 
express,  may  be  either  oral  or  in  writing ;  if  implied,  the  acts 
constituting  it  must  be  of  such  a  nature  and  done  under  such 
circumstances  as  clearly  to  evince  an  intention  to  abandon  the 
privileges  waived,  and  such  as  are  properly  and  reasonably 
calculated  to  warrant  the  opposite  party  in  believing  that  a 
waiver  was  intended  and  that  a  compliance  with  the  stipula- 
tions of  the  policy  regulating  appraisal  is  not  desired  and 
would  be  of  no  effect.  ^^^ 

A  stipulation  in  a  policy  that  no  agent  shall  be  held  to 
have  waived  any  of  the  conditions  of  a  policy  unless  such 
waiver  be  in  writing  and  indorsed  thereon,  does  not  apply  to 
conditions  to  be  performed  after  the  loss  has  occurred.  There-' 
fore  an  adjuster  can  waive  provisions  making  arbitration  in 
accordance  with  the  terms  of  the  policy  a  condition  precedent 
to  suit  by  making  a  different  agreement  for  arbitration.  ^^^ 
The  refusal  of  an  insurer  to  submit  to  an  appraisal  upon  a  re- 

agara  Fire  Ins.  Co.,  156  N.  Y.  80,  50  N.  E.  502;  Zalesky  v.  Iowa  State 
Ins.  Co.,  102  Iowa,  512,  70  N.  W.  187,  71  N.  W.  433;  Elliott  v.  Mer- 
chants' &  B.  Fire  Ins.  Co.,  109  Iowa,  39,  79  N.  W.  452. 

'"'^  Scottish  U.  &  N.  Ins.  Co.  v.  Clancy,  83  Tex.  113.  See  c.  14, 
"Waiver  of  Proofs  of  Loss." 

"8  Harrison  v.  German-American  Fire  Ins.  Co.,  67  Fed.  577.  As  to 
the  powers  of  agents  to  waive  stipulations  in  policy,  see  c.  14, 
"Waiver  of  Proofs  of  Loss,"  and  c.  8,  "Agents." 

The  provisions  of  the  Massachusetts  statute  to  the  effect  that  the 
failure  by  the  insurer  to  do  certain  things  shall  constitute  a  waiver 


§§  221^  222        WAIVEE    OF    RIGHT    TO    ARBITRATION. 


GC3 


quest  of  the  insured  after  a  previous  refusal  to  arbitrate,  is 
a  waiver  of  its  right  to  an  appraisal  and  of  a  provision  in  the 
policy  making  appraisal  a  condition  precedent  to  the  right 
to  maintain  an  action. ^''^  The  parties  can  orally  waive  the 
arbitration  clause  in  a  policy.  ^^^ 

The  stipulations  and  conditions  in  a  policy  concerning 
arbitration  do  not  restrict  the  right  and  capacity  of  the  parties 

of  the  right  to  arbitration  is  not  exclusive  of  a  waiver  by  other  acts. 
Lamson  C.  Store-Service  Co.  v.  Prudential  Fire  Ins.  Co.,  171  Mass. 
433,  50  N.  E.  943. 

^"  Denton  v.  Farmers'  Mut.  Fire  Ins.  Co.,  120  Mich.  690,  79  N.  W. 
929;  Schrepfer  v.  Rockford  Ins.  Co.,  77  Minn.  291,  79  N.  W.  1005.  In 
this  case,  arbitration  in  case  of  disagreement  was  a  condition  prece- 
dent to  a  right  of  action.  A  total  loss  having  occurred  and  the  par- 
ties having  failed  to  agree  as  to  its  amount,  the  insurer  demanded 
an  appraisal  under  the  policy.  The  insured,  acting  in  good  faith,  bui 
under  incorrect  advice  of  counsel,  refused  to  enter  into  a  submission, 
and  brought  an  action  on  the  policy,  which  action  was,  on  trial,  dis- 
missed, because  of  plaintiff's  having  refused  to  arbitrate.  Thereafter 
the  insurer  offered  to  submit  the  amount  of  the  loss  to  arbitrators, 
but  the  insurer  refused  to  do  so,  claiming  that  the  insured  had  by  her 
previous  conduct  lost  all  rights  under  the  policy.  The  insured  then 
brought  this  action  to  recover  the  amount  of  damage  to  the  property 
insured.  There  was  no  evidence  that  the  insurer  had  lost  any  legal 
right  or  suffered  any  damage  by  the  refusal  and  subsequent  delay  of 
the  insured  to  agree  to  submit  the  amount  of  the  loss  to  arbitration. 
The  court  held  that  the  conduct  of  the  plaintiff  in  the  first  instance 
was  not  an  election  between  inconsistent  remedies  or  rights,  which 
prevented  her  from  afterwards  enforcing  whatever  rights  she  pos- 
sessed; that  her  refusal  at  first  to  arbitrate  merely  amounted  to  a 
waiver  of  her  right  to  an  appraisal,  but  did  not  extinguish  her  right 
to  recover;  that  the  refusal  of  the  insurer  to  arbitrate  upon  the  sub- 
sequent offer  of  the  insured  to  do  so  was  a  waiver  of  its  right  to  an 
appraisal,  which  entitled  the  insured  to  bring  an  action  without  an 
appraisal;  that,  since  the  loss  was  not  payable  until  after  an  award, 
the  insured  was  not  entitled  to  interest  on  the  amount  of  the  loss 
until  she  offered  to  arbitrate.  Johnson  v.  Phoenix  Ins.  Co.,  69  Ma. 
App.  226. 

"'■"  Hutchinson  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  153  Mass.  143,  10  L. 
R.  A.  558;  Georges  v.  Niess,  70  Minn,  248,  73  N.  W.  644. 


664:  ARBITKATION   AXD   AWAED.  §§  221,  222 

to  ma"ko  any  laA^-ful  contract,  a  g.  to  waive  submission  to  ar- 
bitration entirely,  or  to  provide  for  a  material  change  as  to  tbe 
terms,  manner  and  form  of  submission.  The  provisions  of 
tbe  policy  respecting  tbe  powers  and  duties  of  tbe  appraisers 
and  umpire  are  presumptively  superseded  by  a  written  agree- 
ment for  a  submission  entered  into  by  tbe  parties  after  a  loss 
bas  occurred.  ^^^  An  insurer,  by  entering  into  an  agreement 
for  submission  to  arbitration  materially  different  in  its  terms 
and  metbod  from  "tbose  provided  for  in  tbe  policy,  waives  its 
right  to  demand  a  new  appraisal  pursuant  to  the  terms  of  the 
policy.  ^'^^  The  conditions  of  a  policy  which  contemplate  an 
adjustment  before  the  making  of  proofs  of  loss  are  waived  by 
the  insurer  receiving  and  retaining  without  objection  proofs 
furnished  it  without  an  appraisal  having  been  had;  ^^^  and 
by  a  refusal  to  enter  into  a  submission  embracing  all  the  prop; 
erty  claimed  by  tbe  insured  to  be  covered  by  a  policy  though 
tbe  insurer  denies  that  it  is  so  covered. ^^^ 

Where  by  the  terms  of  the  policy  an  appraisal  is  necessary 

•"Hasrison  v.  German- American  Fire  Ins.  Co.,  67  Fed.  578;  Bangor 
Sav.  Bank  v.  Niagara  Fire  Ins.  Co.,  85  Me.  68,  20  L.  R.  A.  650;  Broad- 
way Ins.  Co.  V.  Doying,  55  N.  J.  Law,  569. 

Where,  in  response  to  a  notice  of  a  loss  by  fire,  the  general  agent 
of  the  insurance  company  sent  an  adjuster,  who  examined  the  prem- 
ises, and  agreed  with  the  insured  to  leave  the  question  of  the  amount 
of  the  loss  to  one  who  was  a  carpenter,  and  to  accept  his  estimate, 
after  which  the  company  took  no  further  action  in  the  matter,  such 
action  amounted  to  a  waiver  of  the  proofs  of  loss  required  by  the 
policy,  and  rendered  inapplicable  a  provision  requiring  arbitration 
in  case  of  disagreement.  Wholley  v.  Western  Assur.  Co.,  174  Mass. 
263,  54  N.  E,  548. 

""  Schouweiler  v.  Merchants'  Mut.  Ins.  Ass'n,  11  S.  D.  401,  78  N.  W. 
356;  Davis  v.  Atlas  Assur.  Co.,  16  Wash.  232,  47  Pac.  436,  885.  Com- 
pare Adams  v.  New  York  Bowery  Fire  Ins.  Co.,  85  Iowa,  6,  51  N.  W. 
1150. 

"^American  Fire  Ins.  Co.  v.  Stuart  (Tex.  Civ.  App.),  38  S.  W.  395. 

"'  George  Dee  &  Sons  Co.  v.  Key  City  Fire  Ins.  Co.,  104  Iowa,  167, 
73  N.  W.  594. 


^§  221,  222        WAIVER   OF   RIGHT   TO    ARBITRATION.  665 

only  upon  "written  demand,"  the  right  to  insist  upon  tlie 
appraisal  is  waived  by  a  failure  to  make  demand  in  the 
manner  prescribed  ;^'^^  and  by  a  failure  to  make  seasonable 
•demand  where  a  demand  is  necessary. ^'^^  Under  any  policy 
an  appraisal  is  waived  by  the  failure  of  either  party  to  accede 
within  a  reasonable  time  to  a  demand  for  an  appraisal,  made 
by  the  other  party.  ^'^^  Thus  an  insurer  waives  its  right  to 
ijn  appraisal  where  proofs  of  loss  are  promptly  served  and  an 
agreement  for  submission  forwarded  by  the  insured  to  which 
no  reply  was  made  within  sixty  days  except  by  a  letter  of  in- 
quiry as  to  the  address  of  the  appraiser  suggested  ;^'^^  and  by 
taking  possession  of  an  injured  property  and  proceeding  to 
repair  it  with  a  view  to  making  good  the  loss;^'^'^  and  by  an 
insurer  taking  advantage  of  a  provision  of  the  policy  giving 
it  the  right  of  election  to  rebuild  and  repair  damaged  prop- 
erty. ■''^^  An  insurer  which  neglects  or  refuses  to  take  ad- 
vantage of  a  provision  of  a  policy  in  its  favor  giving  it  the 
right  to  arbitration,  cannot  complain  if  the  insured  brings 
suit  to  compel  payment. -^"^^     The  insured  has  the  right  to 

'"Hickerson  v.  German  American  Ins.  Co.,  96  Tenn.  193,  32  L.  R. 
A.  172;  Phoenix  Ins.  Co.  v.  Badger,  53  Wis.  283;  Nurney  v.  Firemans' 
Fund  Ins.  Co.,  63  Mich.  633;  German-American  Ins.  Co.  v.  Steiger, 
109  111.  254. 

"*Zimeriski  v.  Ohio  Farmers'  Ins.  Co.,  91  Mich.  600,  52  N.  W.  55; 
McNees  v.  Southern  Ins.  Co.,  69  Mo.  App.  233;  Brock  v.  Dwelling 
House  Ins.  Co.,  102  Mich.  583,  61  N.  W.  67. 

'"Zalesky  v.  Home  Ins.  Co.,  102  Iowa,  613,  71  N.  W.  566;  Hooker  v. 
Phoenix  Ins.  Co.,  69  Mo.  App.  141;  Schouweiler  v.  Merchants'  Mut. 
Ins.  Ass'n,  11  S.  D.  401,  78  N.  W.  356. 

""  Silver  v.  Western  Assur.  Co.,  33  App.  Div.  450,  54  N.  Y.  Supp.  27. 

"'  Harrison  v.  Hartford  Fire  Ins.  Co.  (Iowa),  83  N.  W.  820;  Cobb  v. 
New  England  Mut.  Marine  Ins.  Co.,  6  Gray  (Mass.),  193. 

"' Wynkoop  v.  Niagara  Fire  Ins.  Co.,  91  N.  Y.  478;  ante,  note  164. 

"'Wallace  v.  German-American  Ins.  Co.,  41  Fed.  742;  Hickerson 
V.  German  American  Ins.  Co.,  96  Tenn.  193,  32  L.  R.  A.  172;  Man- 
chester Fire  Ins.  Co.  v.  Simmons,  12  Tex.  Civ.  App.  607,  35  S.  W.  722. 


666  AKBITKATION    AND   AWARD.  §§  221,  222 

consider  an  appraisement  waived  when  tlie  insurer  lias  made 
a  demand  for  an  appraisement  and  lias  subsequently  aban- 
doned the  same  without  any  fault  on  the  part  of  the  in- 
sured i^^*^  or  when  the  insurer  makes  an  imreasonable  demand 
concerning  the  appointment  of  an  umpire. ^^^ 

If  an  award  is  set  aside  foi'  cause  not  attributable  to  either 
party,  the  condition  is  still  effectual,  but  where,  after  the 
making  of  an  award,  it  was  rejected  by  the  insured,  who 
claimed  it  was  improper,  fraudulent  and  void,  the  insurer, 
by  insisting  upon  its  validity  and  notifying  the  insured  that 
any  claim  under  the  policy  must  be  on  the  basis  of  that  award 
and  no  other,  waives  its  right  to  a  new  appraisement. ^^^ 

Delay  or  Bad  Faith  or  Misconduct  During  the  Appraisal. 

After  the  provisions  of  the  policy  requiring  an  arbitration 
become  operative,  both  insurer  and  insured  are  bound  to  act 
in  good  faith  to  have  the  loss  ascertained  in  accordance  with 
the  provisions  of  the  policy,  and  if  either  party  acts  in  bad 
faith  so  as  to  defeat  the  real  object  of  the  arbitration  as  by  re- 
fusing to  proceed  or  by  insisting  on  the  selection  of  improper 
arbitrators  or  umpire,  or  by  undue  interference  with  any  of 
them  after  their  selection,  the  other  party  is  absolved  from 
further  obligation  to  arbitrate  and  is  not  bound  to  enter  into 
a  new  agreement  for  another  arbitration.  If  such  an  arbitra- 
tion is  essential  to  the  rights  of  the  insured  to  maintain  an 
action  on  the  policy  and  the  failure  of  the  appraisement  is  in 
any  way  caused  by  his  agency  or  procurement,  that  fact  will 

""  Northern  Assur.  Co.  v.  Samuels,  11  Tex.  Civ.  App.  417,  33  S.  W. 
239. 

^^  Hickerson  v.  German  American  Ins.  Co.,  96  Tenn.  193,  32  L.  R. 
A.  172. 

"=Levine  v.  Lancashire  Ins.  Co.,  66  Minn.  149;  Adams  v.  New  York 
Bowery  Fire  Ins.  Co.,  85  Iowa,  6,  51  N.  W.  1149;  Read  v.  State  Ins, 
Co.,  103  Iowa,  307,  72  N.  W.  667. 


§§  221,  222        WAIVER   OF    EIGHT    TO    AKBITKATION.  667 

destroy  whatever  of  his  rights  depend  upon  an  appraisal  and 
will  prevent  his  recovery.  If  the  fault  be  that  of  the  insurer,, 
it  will  be  estopped  to  defend  upon  the  grounds,  (1)  that  there 
has  been  no  appraisal,  and  (2)  that  the  insured  has  neglected 
to  attempt  to  secure  another  appraisal.  Neither  a  claimant 
nor  an  insurer  can  be  tied  up  forever  without  his  fault  and 
against  his  will  by  an  ineffectual  arbitration.  ■^^■'^ 

Each  party  is  bound  by  the  acts  of  the  appraiser  selected  by 
him.  Thus  the  unreasonable  demand  of  an  appraiser  for  the 
selection  of  an  improper  umpire,  or  his  refusal  to  proceed 
with  the  appraisal  without  unreasonable  delay  or  his  insisting 
upon  proceeding  in  an  unusual,  prejudiced,  biased  or  unfair 
manner  or  contrary  to  the  terms  of  the  submission  or  his  in- 
sisting on  adopting  and  adhering  to  dishonest  or  dilatory 
tactics  amounts  to  a  waiver  of  the  right  of  his  principal  to  an 
award. ■^^■^  The  failure  of  either  party  to  have  its  agent  or 
appraiser  present  at  the  time  fixed  for  the  appraisement  fol- 
lowed by  a  subsequent  demand  for  another  appraisal  is  an 
abandonment    of    the    original    submission.  ^^^     An    insurer 

I'^Uhrig  V.  Williamsburgh  City  Fire  Ins.  Co.,  101  N.  Y.  362; 
Powers  Dry  Goods  Co.  v.  Imperial  Fire  Ins.  Co.,  48  Minn.  389; 
Bishop  V.  Agricultural  Ins.  Co.,  130  N.  Y.  488;  Hickerson  v.  German 
American  Ins.  Co.,  96  Tenn.  193,  32  L.  R.  A.  172;  Stockton  Com- 
bined H.  &  A.  Works  v.  Glens  Falls  Ins.  Co.,  98  Cal.  557;  Liverpool 
&  L.  &  G.  Ins.  Co.  V.  Goehring,  99  Pa.  St.  13;  Caledonian  Ins.  Co.  v. 
Traub,  83  Md.  524,  35  Atl.  13;  Zalesky  v.  Home  Ins.  Co.,  102  Iowa, 
613,  71  N.  W.  566;  Western  Assur.  Co.  v.  Hall,  120  Ala.  547,  24  So. 
936;  Wainer  v.  Milford  Mut.  Fire  Ins.  Co.,  153  Mass.  335,  11  L.  R.  A. 
598. 

^'■' Hickerson  v.  German  American  Ins.  Co.,  96  Tenn.  193,  32  L.  R. 
A.  172;  Brock  v.  Dwelling  House  Ins.  Co.,  102  Mich.  583,  26  L.  R.  A. 
623;  Braddy  v.  New  York  Bowery  Fire  Ins.  Co.,  115  N.  C.  354;  Chap- 
man V.  Rockford  Ins.  Co.,  89  Wis.  572,  62  N.-W.  422;  Read  v.  State 
Ins.  Co.,  103  Iowa,  307,  72  N.  W.  665;  McCullough  v.  Phoenix  Ins.  Co., 
113  Mo.  606;  Niagara  Fire  Ins.  Co.  v.  Bishop,  154  111.  9. 

^'^  Northe'-n  Assur.  Co.  v.  Samuels,  11  Tex.  Civ.  App.  417,  33  S.  W. 
239. 


668  ARBITRATION   AND   AWARD.  §§  221,  222 

wliicli  fails  to  participate  in  an  appraisal  when  one  is  de- 
manded is  not  bound  bj  tlie  amount  of  the  award,  but  is 
estopped  to  avail  itself  of  the  absence  of  an  appraisal.^*® 

The  insured  is  not  bound  to  participate  in  an  arbitration 
M'here  he  claims  that  the  arbitrator  appointed  bj  the  insurer  is 
not  disinterested  and  so  infomis  the  company,  if  his  claim  be 
well  founded ;  and  where  after  such  an  objection  the  insurer 
takes  no  action  for  a  period  of  three  weeks,  the  question 
whether  or  not  the  arbitrator  was  disinterested  and  whether 
or  not  the  insurer  should  be  held  by  its  delay  to  have  aban- 
doned the  arbitration  are  properly  questions  to  be  determined 
by  a  jury.^^'^  Where  the  policy  makes  arbitration  in  case  of 
disagreement  a  condition  precedent  to  the  bringing  of  a  suit, 
and  gives  the  insurer  the  right  to  take  the  damaged  property 
at  the  value  fixed  by  the  award,  the  insured  by  revoking  a 
submission  to  arbitration  and  selling  the  goods  avoids  the 
policy  and  forfeits  his  right  to  recovery,  but  the  insurer  by 
afterwards  examining  the  insurer  under  oath  according  to  the 
provisions  of  the  policy  waives  this  forfeiture  on  the  part  of 
the  insured. ^^^ 

Waiver  by  Denial  of  Liability. 

An  insurer  by  denying  all  liability  under  a  policy  when  the 
insured  in  proper  form  and  within  the  proper  time  demands 
an  arbitration,  waives  the  provisions  of  the  policy  providing 
for  arbitration  and  award,  even  though  these  be  conditions 
precedent  to  the  bringing  of  an  action  on  the  policy;  since, 

""  Penn  Plate  Glass  Co.  v.  Spring  Garden  Ins.  Co.,  189  Pa.  St.  255, 
28  Ins.  Law  J.  223. 

'^'  Rademacher  v.  Greenwich  Ins.  Co.,  75  Hun,  83,  27  N.  Y.  Supp. 
155;  McManus  v.  Western  Assur.  Co.,  22  Misc.  Rep.  (N.  Y.)   269. 

"SMorley  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  85  Mich.  210,  48  N.  W. 
503.  Compare  Schrepfer  v.  Rockford  Ins.  Co.,  77  Minn.  291,  79 
N.  W.  1005. 


§§  221,  222        WAIVER   OF    RIGHT   TO    ARBITRATION.  GQO 

under  such  circumstances,  there  would  be  nothing  left  to  arbi- 
trate. Thus  the  provision  for  arbitration  is  waived  where 
the  company  without  referring  to  such  provision  upon  receiv- 
ing proofs  of  loss,  admits  its  liability  for  part  of  the  goods 
destroyed  and  denies  further  liability  solely  on  the  ground 
that  the  other  goods  mentioned  in  the  proofs  of  loss  and  actu- 
ally damaged  were  not  covered  by  the  policy  ;^^®  or  by  deny- 
ing liability  on  any  ground  that  goes  to  the  foundation  of  the 
contract  ;^^°  as  for  instance  that  the  policy  has  been  can- 
celled. ^^^  An  insurer  cannot  demand  an  appraisal  and  arbi- 
tration while  denying  all  liability  under  the  policy  ;^''^  and 
waives  its  rights  to  arbitration  where,  after  receiving  a  state- 
ment of  claim  (which  it  insisted  was  not  in  proper  form)  and 
a  demand  by  the  insured  for  the  amount  due  under  the  policy, 
it  made  no  request  for  arbitration  and  expressed  a  willing- 
ness to  test  the  matter  in  the  courts  ;^^^  and  by  refusing  to 

>''Read  v.  State  Ins,  Co.,  103  Iowa,  307,  72  N.  W.  665;  Westfield 
Cigar  Co.  v.  Insurance  Co.  of  North  America,  169  Mass.  382,  47  N.  E. 
1026;  George  Dee  &  Sons  Co.  v.  Key  City  Fire  Ins.  Co.,  104  Iowa, 
167,  73  N.  W.  594. 

'"» Yost  V.  McKee,  179  Pa.  St.  381 ;  Hickerson  v.  German  American 
Ins.  Co.,  96  Tenn.  193,  32  L.  R.  A.  172;  Hamberg  v.  St.  Paul  F.  & 
M.  Ins.  Co.,  68  Minn.  335,  71  N.  W.  388;  Wainer  v.  Milford  Mut.  Fire 
Ins.  Co.,  153  Mass.  335,  11  L.  R.  A.  598;  Stephens  v.  Union  Assur. 
Soc,  16  Utah,  22,  50  Pac.  626. 

The  rejection  by  an  insurer  of  a  claim  for  loss  waives  a  clause  in 
the  policy  providing  that,  if  the  assured  does  not  within  a  given  time 
demand  an  arbitration  of  his  claim,  he  will  be  bound  by  the  award 
of  the  auditors  of  the  company,  and  leaves  the  assured  at  liberty 
to  sue.  Denton  v.  Farmers'  Mut.  Fire  Ins.  Co.,  120  Mich.  690,  19 
N.  W.  929. 

"^  Douville  v.  Farmers'  Mut.  Fire  Ins.  Co.,  113  Mich.  158. 

•"'  Hickerson  v.  German  American  Ins.  Co.,  96  Tenn.  193,  32  L.  R. 
A.  172. 

'"^Gnau  V.  Masons'  Fraternal  Ace.  Ass'n,  109  Mich.  527,  67  N.  W. 
546;  Hamberg  v.  St.  Paul  F.  &  M.  Ins.  Co.,  68  Minn.  335,  71  N.  W. 
388. 


670  ARBITEATION    AND    AWARD.  §  223 

submit  to  an  appraisal  according  to  the  conditions  of  the  policy 
nnless  certain  additional  duties  were  imposed  v.]X)n  the  arbi- 
trators.-'^^ 

But  to  constitute  a  waiver,  a  denial  of  liability  must  be 
made  before  the  rights  of  the  insured  to  demand  an  arbitra- 
tion cease  to  exist;  and  a  denial  of  all  liability  after  the  in- 
sured has  refused  to  sigTi  a  submission  to  arbitration  is  no 
Avaiver.'^^  Neither  the  failure  of  the  insurer  to  admit 
liability,  nor  its  demand  for  arbitration,  amounts  to  a  denial 
of  liability  which  waives  arbitration.^^^  And  a  denial  of  lia- 
bility after  the  amount  of  the  loss  has  been  ascertained  by  ap- 
praisement, does  not  waive  the  right  of  the  insurer  to  insist 
that  the  appraisement  is  conclusive  as  to  the  amount  of  loss 
where  there  is  an  express  stipulation  that  the  appraisal  shall 
not  waive  any  of  the  conditions  of  the  policy. -'^^ 

Same  —  Denting  Liability  in  Pleadingt. 

§  223.  An  insurer  does  not  waive  any  rights  by  denying  lia- 
bility in  its  answer  when  sued. 

An  insurer  is  and  ought  to  be  permitted  to  plead  and  prove 
all  the  defenses  it  may  have  to  any  action  brought  against  it 
without  w^aiving  any  rights  by  so  doing ;  and  a  defendant  in- 
surer does  not,  by  denying  in  its  answer  all  liability  under  the 
policy  because  of  fraud  of  the  insured  or  because  of  his  failure 
to  comply  with  the  terms  of  the  policy  or  by  denying  liability 
on  any  other  gTound,  waive  any  other  rights  secured  to  it  by 
the  policy,  or  the  defense  of  no  arbitration.     Speaking  of 

"*  Hamilton  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  136  U.  S.  242,  10  Sup. 
Ct  945;  Summerfield  v.  North  British  &  M.  Ins.*  Co.,  62  Fed.  249. 

"=  Pioneer  Mfg.  Co.  v.  Phoenix  Assur.  Co.,  106  N.  C.  28.  See  §§  199- 
200,  "Denial  of  Liability." 

"« Western  Assur.  Co.  v.  Hall,  120  Ala.  547,  24  So.  936. 

'"  American  Cent.  Ins.  Co,  v.  Bass,  90  Tex.  380,  38  S,  W.  1119. 


\ 


■§  223  DENYING    LIABILITY    IN    PLEADING.  671 

this  matter  a  federal  court  has  said:  "This  denial  of  liability 
in  toto  appears  for  the  first  time  in  the  answer  of  the  defend- 
ant in  this  suit.  Up  to  that  time  the  company  had  offered  to 
pay  its  proportion  of  what  it  claimed  was  the  actual  loss  of  the 
insured.  *  -5^  *  Jt  [the  company]  might  waive  any  objec- 
tion to  the  cause  of  the  fire  and  offer  to  settle  to  avojd  litiga- 
tion, but  this  would  not  affect  its  right  when  sued  to  set  up  in 
its  answer  any  legal  defense  it  had  to  the  action."^^^  In 
Nebraska  and  Louisiana  a  contrary  doctrine  prevails,  but  the 
■courts  of  these  states  seem  to  have  overlooked  the  difference 
between  the  voluntary  denial  of  liability  by  an  insurer  when 
an  appraisal  is  demanded  and  an  involuntary  announcement 
of  its  legal  position  after  suit  has  been  brought. ^^^ 

Illustrations  —  No  Waiver. 

The  pendency  of  negotiations  for  a  compromise  does  not 
excuse  a  party  from  compliance  with  a  demand  that  arbitra- 
tion proceedings  go  on.-^''  The  mere  silence  of  .the  insurance 
company  is  not  a  waiver  of  the  arbitration  clause,  where,  after 
recei'V'ing  proofs  of  loss  from  plaintiff,  the  company  wrote  the 
latter  that  it  disputed  the  amount,  and  demanded  an  estima- 
tion under  the  contract  ;^'^^  nor  is  the  action  of  an  adjuster  of 
the  company  in  examining  the  scene  of  a  fire  and  the  extent 

"'Kahnweiler  v.  Phoenix  Ins.  Co.,  57  Fed.  562;  Yendel  v.  Western 
Assur.  Co.,  21  Misc.  Rep.  (N.  Y.)  349;  Balmford  v.  Grand  Lodge, 
A.  O.  U.  W.,  19  Misc.  Rep.  (N.  Y.)  1;  Murphy  v.  Northern  British 
&  Mercantile  Co.,  61  Mo.  App.  323;  La  Plant  v.  Firemens'  Ins.  Co.. 
68  Minn.  82;  Employers'  Liability  Assur.  Corp.  v.  Rochelle,  13  Tex. 
Civ.  App.  232,  35  S.  W.  869. 

"'Lewis  Baillie  &  Co.  v.  Western  Assur.  Co.,  49  La.  Ann.  658; 
Omaha  Fire  Ins.  Co.  v.  Dierks,  43  Neb.  473,  61  N.  W.  743. 

'™  Powers  Dry  Good«  Co.  v.  Imperial  Fire  Ins.  Co.,  48  Minn.  380. 

='"'  Chippewa  Lumber  Co,  v.  Phenix  Ins.  Co.,  80  Mich,  116,  44  N.  W. 
1055. 


672  ARBITRATION    AND   AWARD.  §  225 

of  the  loss.^°^  Tlie  presentation  of  a  builder's  affidavit  as 
to  the  amount  of  loss  and  the  waiver  by  the  insurer  of  formal 
proofs  of  loss  do  not,  either  separately  or  together,  constitute 
a  demand  for  an  appraisal ;  nor  does  the  failure  of  the  insurer 
to  act  thereon  give  a  right  of  action  on  a  policy  which  pro- 
vides for  an  award  or  for  appointment  of  arbitrators  at  the 
written  request  of  either  party  before  bringing  action 
thereon.  ^*^^ 

^'"  Scottish  U.  &  N,  Ins.  Co.  v.  Clancy,  83  Tex.  113. 
""^  Hutchinson  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  153  Mass.  143,  10 
L.  R.  A.  558. 


CHAPTER  XVI. 

PROCEEDS    OF    POLICY. 

§  224-226.  Payment. 
227-230.  Assignment. 

231.  Right  to  Change  Beneficiary. 

232.  Rights  of  Creditors, 

Payment. 

§  224.  The  proceeds  of  a  policy  of  insurance  are  primarily 
payable  (upon  a  proper  showing)  to  the  designated  obligee. 

§  225.  The  effect  of  a  "loss  payable"  clause  in  a  policy  of 
fire  insurance  is  to  make  an  appointment  (either  conditional 
or  absolute)  of  the  one  named  as  payable  of  the  whole  or  a 
part  of  the  proceeds. 

§  226.  The  insurable  interests  of  an  owner  and  mortgagee  are 
separate  and  distinct.  A  mortgagee  has  not,  by  mere  virtue  of 
his  holding  a  lien  upon  insured  property,  any  right  in  or  to  the 
proceeds  of  the  policy  of  insurance  taken  out  by  an  owner  of 
that  property  for  his  own  protection. 

Fire. 

A  contract  of  fire  insurance  is  essentially  a  contract  for  the 
indemnity  of  the  insured.  Its  only  legitimate  purpose  is  to ' 
protect  him  against  the  damage  which  may  be  done  to  his 
property  through  or  by  fire.  The  extent  and  liability  of  the 
insurer,  and  the  conditions  and  limitations  of  the  risk,  are 
fixed  by  the  contract  When  a  loss  or  damage  occurs  to  the 
insured  property  through,  by,  or  on  account  of  fire,  and  under 
the  circumstances,  and  within  the  time  and  location  described 
in  the  contract,  which  is  in  full  force  and  effect;  and  when 
the  insured,  or  one  substituted  in  his  place,  and  to  his  rights 
KERR,  INS.— 43 


674:  PROCEEDS   OF   POLICY.  g§  224-226 

under  tlie  contract  witli  the  consent  of  the  insurer,  thereby 
suffers  a  damage  from  which  the  insurer  has  undertaken  to 
save  him,  the  insured  is  entitled  to  recover  of  the  insurer  the 
amount  of  his  actual  loss  or  damage,  without  distinction  be- 
tween a  partial  and  a  total  loss,  not  exceeding,  however,  the 
limit  of  liability  fixed  by  the  contract.  The  actual  loss  sus- 
tained by  the  insured  is  the  full  measure  of  the  indemnity  to 
which  he  is  entitled.  As  a  condition  precedent  to  any  re- 
covery, therefore,  the  insured  must  show,  first,  that  he  had 
at  some  time  during  the  running  of  the  risk,  and  at  the  time  of 
the  loss,  an  insurable  interest  in  the  property  insured ;  second, 
that  the  insurer  has  contracted  to  indemnify  him  in  whole  or 
in  part,  against  the  loss  and  damage ;  and  third,  that  damage 
has  occurred  to  the  property  insured,  whereby  he  suffered 
pecuniary  loss.-^ 

An  insurable  interest  does  not  imply  absolute  ownership. 
It  may  be  equitable  or  legal,  vested  or  contingent.^  A 
bailee,  or  commission  merchant,  or  person  holding  goods  in 
trust,  may  insure  them  in  his  own  name,  and  recover  for  their 
entire  value,  holding  in  trust  for  the  owners,  the  excess  over 
his  own  interest,^  The  amount  of  recovery  is  not  limited  to 
the  amount  of  loss  sustained  by  the  individual  interest  of  the 
assured,  but  includes  damage  to  all  interests  covered  by  the 

^Post  V.  Hampshire  Mut.  Fire  Ins.  Co.,  12  Mete.  (Mass.)  555; 
Illinois  Mut.  Fire  Ins.  Co.  v.  Andes  Ins.  Co.,  67  111.  362;  Glendale 
Woolen  Co.  v.  Protection  Ins.  Co.,  21  Conn.  19,  54  Am.  Dec.  311; 
Morrison's  Adm'r  v.  Tennessee  M.  &  F.  Ins.  Co.,  18  Mo.  262,  59  Am. 
Dec.  299;  Allen  v.  Home  Ins.  Co.  (Cal.),  65  Pac.  138,  30  Ins.  Law  J. 
711. 

^  See  ante,  c.  9,  "Insurable  Interest." 

'California  Ins.  Co.  v.  Union  Compress  Co.,  133  U.  S.  387;  Pitts- 
burgh Storage  Co.  v.  Scottish  U.  &  N.  Ins.  Co.,  168  Pa.  St.  522,  32 
Atl.  58;  Hope  Oil  M.  C.  &  M.  Co.  v.  Phoenix  Assur.  Co.,  74  Miss.  320, 
21  So.  132;  Ferguson  v.  Pekin  Plow  Co.,  141  Mo.  161,  42  S.  W.  711; 
Home  Ins.  Co.  v.  Peoria  &  P.  U.  Ry.  Co.,  178  111.  64,  52  N.  E.  862. 


§§  224-226  PAYMENT.  675 

policy,  so  far  as  tliey  are  represented  by  liim,  "whether  as  his 
own  or  by  the  precedent  authority  or  subsequent  ratification 
of  others,^  A  policy  in  favor  of  a  supposed  corporation, 
Avhicli  was  not  legally  organized,  is  enforceable.'^  Where  the 
policy  agrees  to  maJ^e  good  to  the  insured,  his  executors,  ad- 
ministrators, or  assigns,  all  loss  or  damage,  after  the  death 
of  the  assured,  the  administrator  or  executor,  as  the  case  may 
be,  is  the  proper  party  to  bring  suit.^  The  phrase  "estate  of 
A.  B.  deceased,"  has  been  held  sufficient  designation  of  an 
insured  so  as  to  extend  the  protection  of  the  insurance  to 
those  beneficially  interested  in  the  estate,''  but  this  is  doubtful 
law.  The  contract  must  be  mutually  binding  upon  parties 
capable  in  law  of  contracting.  This  an  "estate"  is  unable  to 
do.^^ 

It  has  been  held  that,  in  the  absence  of  fraud  or  mistake, 
imless  otherwise  provided  by  the  contract  of  insurance,  if  the 
insured  has  some  insurable  interest  in  the  property  covered  by 
the  contract,  the  whole  amount  of  damages  to  the  property, 
not  exceeding  that  named  in  the  policy,  is  recoverable  by  him, 
if  the  damages  reached  that  sum,  or  if,  by  the  contract  itself, 
and  the  law  governing  the  subject,  the  face  value  of  the  con- 
tract must  be  taken  as  liquidated  damages.^  During  the  year 
of  redemption  the  mortgagoi:  is  entitled  to  recover  the  whole 

*  Trade  Ins.  Co.  v.  Barracliff,  45  N.  J.  Law,  543;  Clement  v.  Brit- 
ish American  Assur.  Co.,  141  Mass.  298. 

^  Holbrook  v.  St.  Paul  F.  &  M.  Ins.  Co.,  25  Minn.  229. 

«Germania  Fire  Ins.  Co.  v.  Curran,  8  Kan.  9;  Appeal  of  Nichols, 
128  Pa.  St.  428,  5  L.  R.  A.  597;  Savage  v.  Howard  Ins.  Co.,  52  N.  Y. 
502. 

'  Phoenix  Ins.  Co.  v.  Hancock,  123  Cal.  222,  55  Pac.  905. 

»»  Kenaston  v.  Lorig,  81  Minn.  454,  84  N.  W.  323. 

« Andes  Ins.  Co.  v.  Fish,  71  111.  620;  Trade  Ins.  Co.  v.  Barracliff, 
45  N.  J.  Law,  543;  Trustees  of  St.  Clara  Female  Academy  v.  North- 
western Nat.  Ins.  Co.,  98  Wis.  257,  73  N.  W.  770;  Clement  v.  British 
American  Assur.  Co.,  141  Mass.  29&, 


670  PROCEEDS   OF  POLICY.  §§  224-22& 

amount  of  damage,  up  to  tlie  amount  insured,  irrespective  of 
the  value  of  his  redeemable  interest.^  A  tenant  for  life  of 
insured  premises  may  recover  their  full  value  to  the  extent 
of  the  sum  for  vrhich  they  were  insured  by  him,  and  is  not 
accountable  to  the  remaindennan  for  any  portion  thereof. ^^ 

A  policy  in  the  name  of  A,  on  account  of  whom  it  may  con- 
cern, or  with  other  equivalent  terms,  will  enure  to  the  benefit 
of  the  party  for  whom  it  was  intended  by  A,  provided  he,  at 
the  time  of  effecting  the  insurance,  had  the  requisite  authority 
so  to  do  from  such  party,  or  the  latter  subsequently  ratified  the 
act;  and  extrinsic  evidence  is  admissible  to  show  who  is  the 
real  party  concerned.  ^^ 

Loss  Payable  Clause. 

A  policy  of  insurance,  issued  to  the  owner  of  goods,  with  the- 
provision,  "loss,  if  any,  payable  to  Jones,  as  his  interest  may 
appear,"  does  not  constitute  a  contract  between  the  company 
and  Jones,  by  which  the  separate  interest  of  the  latter  in  the 
property  is  insured.  The  legal  effect  of  such  a  clause  is  to- 
entitle  him  to  receive,  to  the  extent  of  his  interest,  the  amoimt 
due  from  the  insurer  on  account  of  the  loss.  The  right  of 
the  appointee  is  not  an  independent  right.  He  can  only  re-, 
cover  when  the  insured  himself  is  entitled  to  recover,  and  is 
bound  by  any  acts  of  forfeiture  of  the  insured.  ^^ 

»Buck  V.  Phoenix  Ins.  Co.,  76  Me.  586;  Kane  v.  Hibernia  Mut.  Fire- 
Ins.  Co.,  38  N.  J.  Law,  441,  As  to  rights  of  purchaser  of  equity  or 
sheriff's  certificate,  see  Carlson  v.  Presbyterian  Board  of  Relief,  67 
Minn.  437;  Cushing  v.  Thompson,  34  Me.  496. 

"Harrison  v.  Pepper,  166  Mass.  288.  See,  also,  "Welsh  v.  London^ 
Assur.  Corp.,  151  Pa.  St.  607,  31  Am.  St.  Rep.  786;  Western  Assur. 
Co.  V.  Stoddard,  88  Ala.  606;  Andes  Ins.  Co.  v.  Fish,  71  111.  620; 
Green  v.  Green,  50  S.  C.  514,  46  L.  R.  A.  525,  27  S.  E.  952. 

"Fire  Ins.  Ass'n  v.  Merchants'  &  Miners'  Transp.  Co.,  66  Md.  339; 
Hooper  v.  Robinson.  98  U.  S.  528;  Sturm  v.  Boker,  150  U.  S.  312. 

"Wunderlich  v.  Palatine  Fire  Ins.  Co.,  104  Wis.  395,  80  N.  W.  471: 


§§  22i-226  PAYMENT.  67T 

Rights  of  Mortgagor  and  Mortgagee. 

A  moiigagor  and  a  mortgagee  may  each  separately  insure 
his  own  distinct  interest  in  mortgaged  property.  If  the  mort- 
gagee insures  on  his  own  account  it  is  an  insurance  of  his 
debt,  and  upon  payment  of  his  debt  his  insurance  ceases.  If 
insurance  is  effected  by  the  mortgagor  on  his  o^^ti  account,  he 
will,  in  case  of  loss,  be  entitled  to  recover  the  full  amount, 
not  exceeding  the  insurance,  since  the  whole  loss  is  his  own.^'^ 
The  mortgagee  is  not  entitled  to  the  proceeds  of  a  policy 
taken  out  by  the  mortgagor  or  owner  of  the  equity  of  redemp- 
tion, in  his  o^\ai  name,  in  the  absence  of  any  contract  that  the 
property  shall  be  kept  insured  for  the  benefit  of  the  mort- 
gagee. But  a  mortgagee  is  entitled  to  an  equitable  lien  on  the 
proceeds  of  a  policy  obtained  by  the  mortgagor,  v/here  the 
mortgage  contains  a  covenant  that  the  mortgagor  will  insure 
for  the  benefit  of  the  mortgagee,  or  where  the  mortgagor  con- 
tracted to  insure  for  the  benefit  of  the  mortgagee,  or  where 
the  policy  is  payable  to  the  mortgagee  as  his  interest  may  ap- 
pear.^'* The  mortgagor  is  not  entitled  to  the  benefit  of  any 
insurance  taken  out  by  the  mortgagee  for  himself.  ^^ 

Ermentrout  v.  American  Fire  Ins.  Co.,  60  Minn.  418  (this  case  dis- 
tinguishes between  "loss  payable  to"  and  "loss  payable  to — as  inter- 
est may  appear").  Bates  v.  Equitable  Ins.  Co.,  10  Wall.  (U.  S.)  33; 
Hathaway  v.  Orient  Ins.  Co.,  134  N.  Y.  409,  17  L.  R.  A.  514;  Hock- 
ing V.  Virginia  F.  &  M.  Ins.  Co.,  99  Tenn,  729,  39  L.  R.  A.  148,  42 
S.  W.  451;  Scania  Ins.  Co.  v.  Johnson,  22  Colo.  476,  25  Ins.  Law  J. 
525,  45  Pac.  431;  Chandos  v.  American  Fire  Ins.  Co.,  84  Wis.  184,  54 
N.  W.  392. 

"Carpenter  v.  Providence  W.  Ins.  Co.,  16  Pet.  (U.  S.)  495. 

''Chipman  v.  Carroll,  53  Kan.  163;  Carpenter  v.  Providence  W. 
Ins.  Co.,  16  Pet.  (U.  S.)  495;  Hall  v.  Philadelphia  Fire  Ass'n,  64 
N.  H.  405;  Reid  v.  McCrum,  91  N.  Y.  412;  Wheeler  v.  Factors'  & 
Traders'  Ins.  Co.,  101  U.  S.  439;  Cromwell  v.  Brooklyn  Fire  Ins.  Co., 
44  N.  Y.  42. 

'=*Ely  V.  Ely,  80  111.  532.  See,  also,  Grange  Mill  Co.  v.  Western 
Assur.  Co.,  118  111.  396;  Ames  v.  Richardson,  29  Minn.  330;  Ridley 


678  PROCEEDS   OF   TOLICY.  §§  22-l-22(> 

ITnion  Mortgage  Clause  —  Standard  Policies. 

The  insertion  in  a  standard  l)olicj,  issued  to  an  owner  o£ 
property  and  insuring  his  interest,  of  the  clause  known  as 
the  "union  mortgage  clause,"  whereby  loss,  if  any,  is  payable 
to  a  mortgagee  named  "as  his  interest  may  appear,"  with  a 
proviso  that  the  mortgagee's  interest  shall  not  be  invalidated 
by  any  act  or  neglect  of  the  OAvner,  is  sometimes  held  to  have 
the  effect  of  making  the  designated  mortgagee  a  party  to  the 
contract,  at  least  to  the  extent  of  his  insurable  interest. -^^  But 
this  is  not  the  law.  In  such  cases  the  contract  is  with  the 
mortgagor  and  for  the  insurance  of  his  interest.  The  owner  is 
still  the  insured  and  the  insurance  is  upon  his  property  and 
not  on  the  interest  of  the  mortgagee.  The  latter  is  only  con-, 
ditionally  designated  to  receive,  to  the  extent  of  his  interest 
if  any  is  made  to  appear,  the  proceeds  of  the  insurance,  if  any, 
due  under  the  contract  between  the  OAvner  and  the  insurer ; 
and  the  only  proper  function  of  this  clause  is  to  estop  the  in- 
surer from  asserting  as  against  such  mortgagee  certain  causes 
of  forfeiture  which  might  be  available  in  defense  of  an  action 
brought  by  the  owner.  A  contract  made  in  statutory  fonn 
ought  not  to  be  interpreted  in  favor  of  either  party.  ^^^ 

V.  Ennis,  70  Ala.  463;  Billings  v.  German  Ins.  Co.,  34  Neb.  502,  52 
N.  W.  397;  Heins  v.  Wicke,  102  Iowa,  396,  71  N.  W.  345;  Phenix  Ins. 
Co.  V.  Omaha  Loan  &  Trust  Co.,  41  Neb.  834,  25  L.  R.  A.  679;  Wilcox 
V.  Allen,  36  Mich.  160.  And  the  mortgagee  may  maintain  action  in 
his  own  name:  Hartford  Fire  Ins.  Co.  v.  Olcott,  97  111.  449;  Hast- 
ings V.  Westchester  Fire  Ins.  Co.,  73  N.  Y,  141. 

'^Eddy  V.  London  Assur.  Corp.,  143  N.  Y.  311,  25  L.  R.  A.  686; 
Syndicate  Ins.  Co.  v.  Bohn  (C.  C.  A.),  27  L.  R.  A.  614,  65  Fed.  165: 
Phenix  Ins.  Co.  v.  Omaha  Loan  &  Trust  Co.,  41  Neb.  834;  McKee  v. 
Susquehanna  Mut.  Fire  Ins.  Co.,  135  Pa.  St.  544;  National  Bank  of 
D.  O.  Mills  &  Co.  V.  Union  Ins.  Co.,  88  Cal.  497. 

"»  Ermentrout  v.  American  Fire  Ins,  Co.,  60  Minn.  420;  Maxcy  v. 
New  Hampshire  Fire  Ins.  Co.,  54  Minn.  275;  Chandos  v.  American 
Fire  Ins.  Co.,  84  Wis.  184,  19  L.  R.  A.  321;  Whitney  v.  Burkhardt, 
60  N.  E.  1;  cases  in  note  12,  ante. 


§§  22J:-226  PAYMENT.  679 

Life, 

A  life  insTirance  policy  will  be  construed  as  far  as  possible 
in  the  nature  of  a  will,  and  the  courts  will,  as  far  as  possible, 
construe  it  so  as  to  give  the  proceeds  of  the  policy  to  the  party 
or  class  evidently  intended  by  the  parties  to  be  designated  as 
the  payees  or  beneficiaries.^"^  The  beneficiary  of  a  policy  has, 
upon  its  issuance,  in  the  absence  of  any  reservation  to  the  con- 
trary, an  absolute  and  vested  right  in  it,  and  to  its  proceeds, 
and  of  this  right  he  cannot  be  divested  without  his  assent.  ^^ 
A  joint  tenancy  is  created  in  the  beneficiaries,  and  where  the 
proceeds,  without  any  direction  for  division,  are  made  pay- 
able to  two  persons  named,  on  the  death  of  one  of  them 
during  the  life  of  the  insured,  the  other  takes  the  whole 
amount  of  the  benefit.  ^^  One  who  has  received  the  proceeds 
of  a  life  insurance  policy  made  payable  to  her,  on  her  express 
agreement  to  hold  it  as  trustee,  cannot  refuse  to  pay  the 
money  to  the  beneficiaries  agreed  upon,  on  the  ground  that 
they  have  no  insurable  interest  in  the  life  insured. 2<^  Where 
an  association,  in  the  absence  of  fraud,  voluntarily  issues  a 
certificate,  in  which  a  beneficiary  is  designated  by  name,  the 
beneficiary  not  being  expressly  prohibited  from  l>eing  so 
named,  and  there  being  no  question  of  public  policy  involved, 
and  thereafter,  for  a  term  of  years,  collects  and  receives  as- 
sessments from  the  member,  it  will  not  be  allowed  to  defeat 
a  recovery  on  the  certificate  on  the  ground  that  the  beneficiary 
could  not  be  named  as  such,  and  that  the  certificate  was  ultra 
vires.^^     When  a  person  effects  insurance  on  his  own  life, 

"  Chartrand  v.  Brace,  16  Colo.  19,  12  L.  R.  A.  209. 
"Allis  V.  Ware,  28  Minn.  166.     See  post,  "Right  to  Change  Bene- 
ficiary;" Gould  V.  Emerson,  99  Mass.  154. 

^^  Farr  v.  Grand  Lodge,  A.  0.  U.  W.,  83  Wis.  446. 

=°  Hurd  V.  Doty,  86  Wis.  1. 

"Bloomington  Mut.  Ben.  Ass'n  v.  Blue,  120  111.  121,  11  N.  E.  331; 


680  PROCEEDS  OF  roLicY.  §§  224—226 

and  designates  another  as  payee  in  the  policy,  -witliout  any 
fraud  being  practiced  upon  the  insurer,  the  person  named  may 
maintain  an  action  upon  the  policy  without  showing  an  insur- 
able interest  in  the  life  of  the  insured.  ^^  No  one  except  the 
insurer  can  tai:e  advantage  of  the  fact  that  the  payee  named 
in  the  policy  is  not  within  the  class  which,  by  the  constitution 
of  the  insurer,  is  entitled  to  take  the  benefit.  ^^  A  creditor 
has  an  insurable  interest  in  the  life  of  his  debtor,  and  may  in- 
sure it  in  an  amount  proportionate  to  the  amount  of  the  debt, 
and  the  expense  of  keeping  the  policy  alive.  But  the  amount 
of  the  policy  must  not  be  so  great  as  to  make  the  transaction 
a  speculative  or  wagering  one.^* 

A  recovery  may  be  had  although  the  statute  of  limitation 
has  run  against  the  debt  since  the  insurance  was  effected.  ^^  A 
life  policy,  originally  valid,  does  not  cease  to  be  so  by  the 
cessation  of  the  payee's  interest  in  the  life  insured.  Thus  a 
wife  may  recover  upon  a  policy  on  the  life  of  one  who  was  her 
husband  when  it  was  issued,  though  she  be  afterwards  divorced 
from  him;^^  unless  the  contract  provides  to  the  contrary.  ^^ 
A  policy  of  insurance  procured  by  a  man  in  favor  of  a  woman 

Gruber  v.  Grand  Lodge,  A.  O.  U.  W.,  79  Minn.  59,  81  N.  W.  743;  Gib- 
son V.  Imperial  Council,  O.  of  U.  F.,  168  Mass.  391,  47  N.  E.  101. 

"Pacific  Mut.  Life  Ins.  Co.  v.  Williams,  79  Tex.  633;  Vivar  v.  Su- 
preme Lodge,  K.  of  P.,  52  N.  J.  Law,  455;  Kentucky  L.  &  A.  Ins.  Co. 
V.  Hamilton  (C.  C.  A.),  63  Fed.  93;  Hill  v.  United  Life  Ins.  Ass'n,  154 
Pa.  St.  29;  Campbell  v.  New  England  Mut.  Life  Ins.  Co.,  98  Mass. 
38L 

»  Johnson  v.  Knights  of  Honor,  53  Ark.  255,  8  L.  R.  A.  732. 

"Ulrich  V.  Reinoehl,  143  Pa.  St.  238,  13  L.  R.  A.  433;  Rittler  v. 
Smith,  70  Md.  261,  2  L.  R.  A.  844;  Grant's  Adm'rs  v.  Kline,  115  Pa. 
St.  618. 

"Rawls  V.  American  Life  Ins.  Co.,  36  Barb.  (N.  Y.)  357.  See 
ante,  c.  9,  "Insurable  Interest." 

=°  Connecticut  Mut.  Life  Ins.  Co.  v.  Schaefer,  94  U.  S.  457. 

"  Tyler  v.  Odd  Fellows  Mut.  Relief  Ass'n,  145  Mass.  134,  13  N.  B. 
360. 


f§  224-226  PAYMENT.  681 

living  with  him  as  his  wife,  and  described  in  the  policy  as 
such,  is  payable  to  her  instead  of  to  his  legal. wife. ^^  All  the 
beneficiaries  share  equally  in  a  policy  of  insurance  payable  to 
the  widow  and  children  of  the  insured. ^^  A  gi-andchild  by  a 
deceased  child  does  not  share  in-  the  proceeds  of  a  policy  for 
the  benefit  of  the  widow  and  the  surviving  children.^"  A 
posthumous  child  has  no  share  in  a  policy  payable  to  desig- 
nated children  of  the  insured.^  ^  One  whose  life  is  insured 
for  the  benefit  of  his  wife  and  children  by  a  tontine  policy 
which  agi-ees  to  pay  to  them  as  "the  assured,"  has  neither  the 
legal  title  to  the  policy,  nor  any  right  as  trustee  entitling  him 
to  its  benefits  at  maturity,  although  he  has  always  had  pos- 
session and  control  of  the  policy,  and  paid  the  premiums,  and 
the  beneficiaries  did  not  know  of  the  existence  of  the  insur- 
ance.^2  A  policy  payable  to  the  wife  of  the  insured,  with  a 
proviso  that  in  case  of  her  death  before  that  of  her  husband 
It  should  be  payable  to  her  children,  vests  an  interest  in  the 
■children,  which  cannot  be  destroyed  by  the  assignment  of  the 
policy  by  the  husband  and  wife.'^^  A  policy  payable  to  a 
designated  person,  or  her  children  or  their  guardian  in  case 
-of  her  death  before  that  of  the  assured,  belongs  to  her  gi-and- 
<3hildren  if  her  children  die  before  the  policy  becomes  pay- 
able.^^  If  payable  to  the  wife  of  the  insured  upon  his  death, 
and  in  case  of  her  death  to  his  children,  the  right  to  the 
policy  vests  in  her  if  she  survives  him,  and  the  proceeds  bo- 

^  Overbeck  v.  Overbeck,  155  Pa.  St.  5.  See,  also,  Watson  v.  Cen- 
tennial Mut.  Life  Ass'n,  21  Fed.  698;  Story  v.  Williamsburgh  Mut. 
Ben.  Ass'n,  95  N.  Y.  476;  Bolton  v.  Bolton,  73  Me.  299. 

'» Taylor  v.  Hill,  86  Wis.  99,  56  N.  W.  738. 

'"  Small  V.  Jose,  86  Me.  120. 

""  Spry  V.  Williams,  82  Iowa,  61,  10  L.  R.  A.  863. 

»^New  York  Life  Ins.  Co.  v.  Ireland  (Tex.),  14  L.  R.  A.  278. 

5^  Brown's  Appeal,  125  Pa.  St.  303. 

"In  re  Conrad's  Estate,  89  Iowa,  396,  56  N.  W.  535;  Walsb  v,  Mut- 
tial  Life  Ins.  Co.,  133  N.  Y.  408. 


682  PROCEEDS  OF  POLICY.  §§  224-226' 

come  a  part  of  lier  estate,  thougli  slie  died  before  collecting 
the  same.^^ 

The  term  "children  of  the  insured"  includes  offspring  hy 
different  wives.^^  The  word  "heirs,"  used  in  a  life  insur- 
ance policy  as  descriptive  of  those  entitled  to  the  proceedsy 
where  there  is  no  context  to  modify  or  limit  the  ordinar)'' 
signification  of  the  word,  means  the  parties  who  are  by  law 
entitled  to  the  undevised  property  of  the  deceased.^"^  The 
proceeds  of  a  policy  of  insurance  belong  to  the  beneficiaries, 
and  not  to  the  estate  of  the  deceased,  when  the  policy  is  pay- 
able to  the  heirs  at  law  of  the  insured.^^  A  policy  payable 
to  the  "legal  representatives"  of  the  insured,  belongs  to  his- 
heirs  or  next  of  kin,  rather  than  to  his  executors  or  admin- 
istrators.^^    The  proceeds  of  a  policy  payable  to  one's  exec- 

"Chartrand  v.  Brace,  16  Colo.  19,  12  L.  R.  A.  209.  See,  also,  on 
construction  of  rights  of  wife  and  children,  Hooker  v.  Sugg,  102 
N.  C.  115,  3  L.  R.  A.  217;  Garner  v.  Germania  Life  Ins.  Co.,  110  N.  Y. 
266,  1  L.  R.  A.  256;  Hoffman  v.  Hoke.  122  Pa.  St.  377,  1  L.  R.  A.  229; 
Ricker  v.  Charter  Oak  Life  Ins.  Co.,  27  Minn.  193. 

^«  Koehler  v.  Centennial  Mut.  Life  Ins.  Co.,  66  Iowa,  325.  But  only 
children  common  to  both  the  assured  and  his  designated  wife  are  re- 
ferred to  in  a  policy  payable  to  the  wife  and  their  children.  Evans 
V.  Opperman,  76  Tex.  293.  See,  also,  as  to  "children,"  Connecticut 
Mut.  Life  Ins.  Co.  v.  Baldwin,  15  R.  I.  106;  Stowe  v.  Phinney,  78 
Me.  244;  McDermott  v.  Centennial  Mut.  Life  Ass'n,  24  Mo.  App.  73; 
Felix  V.  Grand  Lodge,  A.  0.  U.  W.,  31  Kan.  81;  Covenant  Mut.  Ben. 
Ass'n  V.  Hoffman,  110  111.  603;  Conigland  v.  Smith,  79  N.  C.  303; 
Lockwood  V.  Bishop,  51  How.  Prac.  (N.  Y.)  223;  Stigler's  Ex'r  v. 
Stigler,  77  Va.  163. 

^■Gauch  v.  St.  Louis  Mut.  Life  Ins.  Co.,  88  111.  251;  Hubbard  v. 
Turner,  93  Ga.  752;  Johnson  v.  Knights  of  Honor,  53  Ark.  255,  8  L- 
R.  A.  732;  Mullen  v.  Reed,  64  Conn.  240,  24  L.  R,  A.  664;  Lyons  v. 
Yerex,  100  Mich.  214,  58  N.  W.  1112. 

''Northwestern  Masonic  Aid  Ass'n  v.  Jones,  154  Pa.  St.  99;  Mullen 
V.  Reed,  64  Conn.  240,  24  L.  R.  A.  664;  Cutchin  v.  Johnston,  120  N.  C. 
51,  26  S.  E.  698.  As  to  "legal  heirs,"  see  Brown  v.  Iowa  Legion  of 
Honor,  107  Iowa,  439,  78  N.  W.  73. 

"Schultz  V.  Citizens'  Mut.  Life  Ins.  Co.,  59  Minn.  308,  61  N.  W. 


§§  224-226  PAYMENT.  683 

iitors,  administrators,  or  assigns,  may  be  disposed  of  by  -will, 
as  they  fomi  a  part  of  bis  estate.^"  Where  tbe  express  pur- 
pose of  a  beneficial  association  is  to  secure  moneys  to  tbe 
family  or  heirs  of  tbe  insured,  upon  his  death,  and  a  policy  is 
issued  payable  to  the  wife  of  the  insured,  and  her  heirs,  ad- 
ministrators, or  assigns,  and  she  dies  before  the  insured, 
leaving  no  children,  the  heirs  of  the  husband  become  entitled 
to  the  benefits,  and  not  the  heirs  of  the  wife.^^  Where  a 
policy  on  a  father's  life  is  payable  to  a  trustee,  in  trust  for  a 
minor  child,  the  proceeds  belong  to  the  tnistee,  and  not  to 
the  estate  of  the  assured.^^  ^  person  has  an  insurable  interest 
in  his  o^^-n  life,  and  can  insure  it  for  the  benefit  of  his  heirs, 
or  even  for  a  stranger,  and  his  executor  cannot  recover  the 
proceeds  of  a  policy  procured  by  the  insured  himself,  and 
payable  to  designated  parties  who  did  not  hav€  an  insurable 
interest.'*^ 

No  Valid  Designation  of  a  Beneficiary  Who  Can  Receive  the 
Proceeds.  , 

It  sometimes  happens,  especially  in  the  case  of  the  issuance 
of  certificates  in  fraternal  or  benevolent  organizations,  that 
there  is  no  sufficient  designation  of  a  payee  or  beneficiary  in 
the  contract,  or  that  the  one  designated  is  for  some  reason 
prohibited  from  collecting  the  moneys  due  on  the  certificate  at 
maturity.  The  desigiiation  of  the  beneficiary  in  the  certifi- 
cate of  a  mutual  benefit  society  is  not  always  essential.  It  is 
a  formality  which  neither  goes  to  the  substance  of  the  contract 

331.  See,  also,  Sulz  v.  Mutual  Reserve  Fund  Life  Ass'n,  145  N.  Y. 
563,  28  L.  R.  A.  379;  Griswold  v.  Sawyer,  125  N.  Y.  411. 

^McCauley's  Appeal,  93  Pa.  St.  102;  Kerman  v.  Howard,  23  Wis.' 
108;  Williams  v.  Corson  (Tenn.),  5  Bigelow,  Life  &  Ace.  Rep.  524. 

"  Michigan  Mut.  Ben.  Ass'n  v.  Rolfe,  76  Mich.  146,  42  N.  W.  1094. 

«  Cables  v.  Prescott,  67  Me.  582. 

"  Northwestern  Masonic  Aid  Ass'n  v.  Jones,  154  Pa.  St.  99,  26  Atl. 
253. 


68-1  PKOCEEDS  OF   POLICY.  §§  224-226 

of  membersliip,  nor  affects  its  express  object.  It  maj  be 
waived,  and  if  this  is  done  those  who  might  prove  to  be  the 
heirs  or  legatees  of  the  member  at  his  death,  cannot  be  heard 
to  object  because  they  have-  no  vested  right  whatever  in  the 
benefit  during  the  lifetime  of  the  member. 
'  A  verbal  designation  of  the  beneficiary,  made  by  the  mem- 
ber after  issuance  of  a  certificate  without  any  desigTiation, 
may  be  accepted  by  the  society  as  sufficient,  and  will  be  con- 
sidered as  an  original  designation,  and  not  as  a  change  of  bene- 
ficiaries.^'* Unless  the  policy  points  out  to  whom  the  insur- 
ance money  shall  be  paid  in  case  the  beneficiary  die  before  the 
insured,  the  appointment  of  the  beneficiary  is  revoked  by  his 
death. ■^^  It  has  been  held  that  the  proceeds  of  a  policy,  pay- 
able to  the  devisees  of  a  member  of  a  benevolent  society,  did 
not,  upon  the  death  of  the  member,  form  any  part  of  his  estate, 
nor  are  they  recoverable  by  his  executor  or  administrator  ;'*^ 
and  that  where  a  policy,  issued  upon  the  life  of  a  woman,  is 
made  payable  to  her  children,  and  she  dies  before  any  chil- 
dren are  bom,  her  executor  cannot  maintain  an  action  at  law 
for  the  amount  of  the  insurance, ^'^  But  in  the  case  of  New- 
man V.  Covenant  Mut.  Ins.  Ass'n,^^  it  is  held  that  where  a 
certificate  was  made  payable  to  "the  devisees  of  (the  member), 
as  designated  in  his  last  will  and  testament,"  and  the  member 
made  no  will,  that  the  right  to  the  insurance  money  descended 
to  his  heirs,  the  same  as  any  other  property  or  chose  in  action. 

"  Hanson  v.  Minnesota  S.  R.  Ass'n,  59  Minn.  123, 

«  Given  v.  Wisconsin  Odd  Fellows'  Mut.  Life  Ins.  Co.,  71  Wis.  547, 
37  N.  W.  817;  Ryan  v.  Rothweiler,  50  Ohio  St.  595. 

**Worley  v.  Northwestern  Masonic  Aid  Ass'n,  10  Fed.  227;  Hellen- 
berg  V.  District  No.  1,  I.  O.  of  B.  B.,  94  N.  Y.  580. 

*'  McElwee  v.  New  York  Life  Ins.  Co.,  47  Fed.  798. 

*«76  Iowa,  61,  40  N.  W.  89,  citing  Smith  v.  Covenant  Mut.  Ben. 
Ass'n,  24  Fed.  685:  Covenant  Mut.  Ben.  Ass'n  v.  Sears,  114  111.  113. 
See,  also,  Fenn  v.  Lewis,  10  Mo.  App.  478,  81  Mo.  259;  In  re  Negus, 
27  Misc.  Rep.  165,  58  N.  Y.  Supp.  377. 


§§  227, 228  ASSIGNMENT.  685 

"Where  a  member  of  a  benefit  society  designates  a  creditor 
as  the  beneficiary  in  a  certificate  issued  to  him,  in  violation 
of  the  statute,  the  whole  contract  is  not  void,  and  the  executor 
of  the  member's  estate  is  entitled  to  the  money  due  on  the 
certificate,  to  be  held  by  him  in  trust  for  the  benefit  of  those 
who,  at  the  time  the  contract  was  made,  were  entitled  to  be 
named  as  beneficiaries.'*^  An  invalid  or  inoperative  attempt 
to  change  a  beneficiary  will  not  destroy  the  rights  of  the  bene- 
ficiary.^*^- A  beneficiary  in  an  insurance  policy,  who  murders 
the  insured,  forfeits  all  rights  under  the  policy,^  ^  but  the 
liability  of  the  company  is  not  thereby  terminated.  The 
benefits  revert  to,  and  become  a  part  of  the  estate  of  the  as- 
sured, and  his  administrator  can  recover  them,  for  the  benefit 
of  those  who  would  have  been  entitled  to  the  insurance,  had 
no  beneficiary  been  designated.^ ^ 

ASSIGN"MENT. 

§  227.  A  fire  insurance  policy  is  not,  before  loss,  assignable 
without  the  consent  of  the  insurer. 

§  228.  A  life  insurance  policy  is  usually  considered  to  be  as- 
signable, unless  an  assignment  is  expressly  prohibited  by  the 
terms  of  the  policy. 

*"  Supreme  Council,  A.  L.  of  H.,  v.  Perry,  140  Mass.  580,  5  N.  E. 
634;  Clarke  v.  Schwarzenberg,  162  Mass.  98,  38  N.  E.  17. 

"■"  Elsey  V.  Odd  Fellows'  Mut.  Relief  Ass'n,  142  Mass.  224,  7  N.  E. 
844;  Grace  v.  Northwestern  Mut.  Relief  Ass'n,  87  Wis.  562,  58  N.  W. 
1041. 

"New  York  Mut.  Life  Ins.  Co.  v.  Armstrong,  117  U.  S.  591; 
Schreiner  v.  High  Court,  C.  O.  of  F.,  35  111.  App.  576. 

"Shea  V.  Massachusetts  Ben.  Ass'n,  160  Mass.  289;  Palmer  v. 
Welch,  132  111.  141;  Schmidt  v.  Northern  Life  Ass'n  (Iowa),  83  N.  W.- 
803;  Schonfield  v.  Turner,  75  Tex.  324,  7  L.  R.  A.  189.  As  to  desig- 
nation of  beneficiary  not  entitled  to  proceeds,  see,  also.  Beard  v. 
Sharp,  100  Ky.  606;  Love  v.  Clune,  24  Colo.  237,  50  Pac.  34;  North- 
western Masonic  Aid  Ass'n  v.  Jones,  154  Pa.  St.  99;  Hurd  v.  Doty, 
86  Wis.  ];  Peek's  Ex'r  v.  Peek's  Ex'r,  101  Ky.  423;  Mayher  v.  Man- 
hattan Life  Ins.  Co.,  87  Tex.  169. 


686  PKOCEEDS   OF   POLICY.  §§  227-230 

§  229.  The  effect  of  an  assignment  of  a  policy,  with  the  con- 
sent of  the  insured,  is  to  create  a  new  contract  between  the 
insurer  and  the  assignee. 

^  230.  The  rights  of  a  payee  after  maturity  of  a  policy  are 
assignable. 

Assignment  of  Fire  Insurance  Policy. 

Policies  of  fire  insurance  are  not,  in  their  nature,  assign- 
able, nor  is  tlie  interest  in  them  ever  intended  to  be  transfer- 
able from  one  to  another,  without  the  consent  of  the  insurer. 
They  are  not  insurances  of  the  specific  thing  mentioned  to  be 
insured,  and  do  not  attach  to  the  property,  or  in  any  manner 
follow  the  same  as  incident  thereto,  by  any  conveyance  or 
assignment.  They  are  only  special  agreements  to  indemnify 
the  assured  mentioned  therein,  against  such  loss  or  damage 
as  he  may  sustain  from  the  peril  specified.^^  "When  insured 
property  is  transferred,  and  a  policy  thereon  assigned  to  the 
purchaser,  with  the  assent  of  the  insurer,  the  purchaser  be- 
comes the  insured,  and  his  rights  are  unaffected  by  any  acts 
of  forfeiture,  or  default  of  the  assignor,  occurring  before  the 
assignment.  A  new  relation  is  created  between  the  insurer 
and  the  assignee,  just  as  if  the  original  policy  was  surrendered, 
and  a  new  one  issued.^'*  By  consenting  to  the  transfer  and 
assignment  of  the  policy,  the  insurer  waives  all  defenses  to 
the  validity  of  the  policy,  at  the  time  the  consent  is  given,  and 
validates  the  policy,  even  if  it  had  before  been  void.^^ 

"New  V.  German  Ins.  Co.,  5  Ind.  App.  82,  31  N.  E.  475;  Williams 
V.  Lilley,  67  Conn.  50,  37  L.  R.  A.  150;  White  v.  Robbins,  21  Minn. 
370;  Carpenter  v.  Providence  W.  Ins.  Co.,  16  Pet.  (U.  S.)  495;  Fogg 
V.  Middlesex  Mut.  Fire  Ins.  Co.,  10  Cush.  (Mass.)  345. 

'•^  Continental  Ins.  Co.  v.  Munns,  120  Ind.  30,  22  N.  E.  78;  Bullman 
V.  North  British  &  M.  Ins.  Co.,  159  Mass.  122,  34  N.  E.  169;  Hall  v. 
Niagara  Fire  Ins.  Co.,  93  Mich.  184. 

"  Rines  v.  German  Ins.  Co.,  78  Minn.  46,  80  N.  W.  839. 


^§  227-230  ASSIGNMENT.  687 

Assignment  of  Life  Insurance  Policy.  , 

It  is  well  settled  that  a  policy  of  life  insurance,  where  the 
policy  contains  no  provision  to  the  contrary,  is  assignable  as 
any  other  chose  in  action,  at  least  pro\'ided  the  assignee  has 
an  insurable  interest  in  the  life  of  the  insured.^®  And  it  is 
often  held  that  if  the  policy  be  taken  out  in  good  faith,  and 
not  as  a  cover  for  a  wager,  it  may  be  assigned  to  one  w^ho  has 
no  insurable  interest  in  the  life  of  the  insured.^'  The  weight 
of  authority  cannot  be  said  to  bo  in  favor  of  this  rule,  unless 
the  insurer  expressly  consents  to  the  assignment.^^  A  con- 
dition of  a  policy  that  no  assignment  shall  be  valid  unless 
made  in  writing,  indorsed  thereon,  and  unless  a  copy  of  the 
assignment  be  given  to  the  company,  is  for  the  benefit  of  the 
insurer  alone.^^ 

What  is  an  Assignment. 

A  pledge  of  a  policy  as  collateral  security,  is  not  an  assign- 
ment within  the  terms  of  a  prohibition  of  the  policy  against 
an  assignment. ^*^     A  parol  assignment  of  the  policy,  accom- 

"Rittler  v.  Smith,  70  Md.  261,  2  L.  R.  A.  844;  Milner  v.  Bowman, 
119  Ind.  448;  Hogue  v.  Minnesota  Packing  &  Provision  Co.,  59  Minn. 
39;  Robinson  v.  Hurst,  78  Md.  59,  20  L.  R.  A.  761;  Prudential  Ins. 
Co.  V.  Liersch,  122  Mich.  436,  81  N.  W.  258;  Connecticut  Mut.  Life 
Ins.  Co.  V.  Schaefer,  94  U.  S.  457. 

"Valton  V.  National  Fund  Life  Assur.  Co.,  20  N.  Y.  32;  Dixon  v. 
National  Life  Ins.  Qo.,  168  Mass.  48,  46  N.  E.  430;  Eckel  v.  Renner, 
41  Ohio  St.  232;  Clark  v.  Allen,  11  R,  I.  439;  Bursinger  v.  Bank  of 
Watertown,  67  Wis.  75;  Smith  v.  National  Ben.  Soc,  123  N.  Y.  85. 

'»Warnock  v.  Davis,  104  U.  S.  775;  Missouri  Valley  Life  Ins.  Co. 
V.  McCrum,  36  Kan.  146;  Stevens  v.  Warren,  101  Mass.  564;  Downey 
V.  Hoffer,  110  Pa.  St.  109;  Alabama  Gold  Life  Ins.  Co.  v.  Mobile  Mut. 
Ins.  Co.,  81  Ala.  329;  Schlamp  v.  Berner's  Adm'r  (Ky.),  51  S.  W. 
312.    See  ante,  c.  9,  "Insurable  Interest,"  notes  52-56. 

"  Hogue  V.  Minnesota  Packing  &  Provision  Co.,  59  Minn.  39. 

•"Griffey  v.  New  York  Cent.  Ins.  Co.,  100  N.  Y.  417;  Mahr  v.  Bart- 
lett,  53  Hun  (N.  Y.),  388. 


G88  PROCEEDS   OF   POLICY.  §§  227-230 

panied  by  delivery,  is  sufficient.^  ^  The  validity  of  the  as- 
signment must  be  determined  by  tbe  law  of  tbe  place  where 
it  is  made.^^ 

Assignment  of  Policy  After  Maturity. 

An  assignment  of  a  policy,  and  the  right  to  recover  upon  ity 
aft^r  maturity,  is  valid,  regardless  of  the  conditions  of  the 
policy.  The  assignee  succeeds  to  the  right  of  the  assignor, 
and  his  claim  is  subject  to  any  defenses  which  might  have  been 
asserted  against  the  assignor.^^  An  order  on  the  insurer  for 
the  amount  of  the  loss,  will  constitute  an  equitable  assignment 

"Chapman  v.  Mcllwrath,  77  Mo.  38;  Hogue  v.  Minnesota  Packing 
&  Provision  Co.,  59  Minn.  39. 

"Mutual  Life  Ins.  Co.  v.  Allen,  138  Mass.  24;  Connecticut  Mut. 
Life  Ins.  Co.  v.  Westervelt,  52  Conn.  586.  See,  also,  as  to  assign- 
ment, Briggs  V.  Earl,  139  Mass.  473;  Brick  v.  Campbell,  122  N.  Y. 
337;  Brown  v.  Equitable  Life  Assur.  Soc.  75  Minn.  412.  78  N.  W. 
103,  671,  79  N.  W.  968;  Thompson  v.  Phenix  Ins.  Co.,  136  U.  S.  287 
(change  of  receivers)  ;  Forest  City  Ins.  Co.  v.  Hardesty,  182  111.  39. 
55  N.  E.  139;  Germania  Fire  Ins.  Co.  v.  Home  Ins.  Co.,  144  N.  Y. 
195  (taking  in  a  partner);  Trabue  v.  Dwelling  House  Ins.  Co.,  121 
Mo.  75,  23  L.  R.  A.  719;  Perry  v.  Lorillard  Fire  Ins.  Co.,  6  Lans.  201, 
61  N.  Y.  214;  Dube  v.  Mascoma  Mut.  Fire  Ins.  Co.,  64  N.  H.  527  (as- 
signment in  bankruptcy);  Westchester  Fire  Ins.  Co.  v.  Dodge,  44 
Mich.  420  (death  of  insured);  Georgia  Home  Ins.  Co.  v.  Kinnier's 
Adm'x,  28  Grat.  (Va.)  88;  Brown  v.  Cotton  &  Woolen  Manuf'rs  Mut. 
Ins.  Co.,  156  Mass.  587  (descent  of  property  to  heirs);  Richardson's 
Adm'r  v.  German  Ins.  Co.,  89  Ky.  571,  8  L.  R.  A.  800  (death  of  in- 
sured);  Roby  v.  American  Cent.  Ins.  Co.,  120  N.  Y.  510  (dissolution 
of  firm);  McNally  v.  Phoenix  Ins.  Co.,  137  N.  Y.  389  (appointment  of 
receiver).  See,  also,  Keeney  v.  Home  Ins.  Co.,  71  N.  Y.  396;  Carey 
v.  German  American  Ins.  Co.,  84  Wis.  80;  Orr  v.  Citizens'  Fire  Ins. 
Co.,  159  111.  187,  43  N.  E.  867. 

•"Nease  v.  Aetna  Ins.  Co.,  32  W.  Va.  283;  Bennett  v.  Maryland  Fire 
Ins.  Co.,  14  Blatchf.  422,  Fed.  Cas.  No.  1,321;  West  Branch  Ins.  Co. 
V.  Helfenstein,  40  Pa.  St.  289;  Bonefaut  v.  American  Fire  Ins.  Co., 
76  Mich.  654;  Hall  v.  Dorchester  Mut.  Fire  Ins.  Co.,  Ill  Mass.  53; 
Fenton  v.  Fidelity  &  Casualty  Co.,  36  Or.  283,  56  Pac.  1096,  48  L.  R. 
A.  770;  Spare  v.  Home  Mut.  Ins.  Co.,  17  Fed.  568;  Imperial  Fire  Ins, 
Co.  V.  Dunham,  117  Pa.  St.  460. 


§  231  EIGHT    TO    CHANGE    BENEFICIARY.  689 

to  the  extent  of  tlie  amount  mentioned  in  the  order  ;^^  and  a 
claim  for  damages  against  an  insurer,  because  of  its  failure 
to  deliver  a  paid-up  policy,  is  assignable.®^  Courts  will 
recognize  an  equitable  assig-nment  of  a  claim  to  the  proceeds 
of  a  policy,  and  enforce  the  rights  of  the  assignee.^® 

Pledge  of  Policy. 

A  pledge  of  a  policy  is  not  an  assignment  of  i^.^'^  It  may 
be  effected  by  mere  manual  delivery  of  the  policy,  %vithout 
any  wi'iting,®^  but  delivery  of  the  policy  to  the  pledgee  is  es- 
sential.®^ The  deposit  of  a  policy  of  insurance  with  a  cred- 
itor of  the  assured  as  security  for  a  debt,  gives  the  creditor 
a  lien  on  the  proceeds  of  the  policy,  which  lien  is  binding 
upon  the  insured,  the  insurer,  and  all  persons  who,  without 
notice  of  the  lien,  take  an  interest  in  the  policy  from  the 
insured.'^^  A  pledgee  may  recover  the  full  amount  due  al- 
though a  portion  of  his  debt  is  not  matured,  and  the  amount 
due  on  the  policy  exceeds  the  entire  debt.'^^ 

Right  to  Change  Beneficiaey. 

§  231.  In  the  absence  of  a  provision  reserving  the  right  to 
designate  a  new  beneficiary,  the  rule  is  that  a  beneficiary  in  a 
life  insurance  policy  acquires,  upon  the  execution  and  deliv- 
ery of  the  policy,  a  vested  right  and  interest,  of  which  he 
cannot  be  deprived  without  his  consent. 

"Union  Ins.  Co.  v.  Glover,  9  Fed.  529;  Aultman  v.  McConnell,  31 
Fed.  724. 

•"Missouri  Valley  Life  Ins.  Co.  v.  Kelso,  16  Kan.  481. 

"  In  re  Wittenberg  Veneer  &  Panel  Co.,  108  Fed.  597. 

"Griffey  v.  New  York  Cent.  Ins.  Co.,  100  N.  Y.  417;  Mahr  v.  Bart- 
lett,  53  Hun  (N.  Y.),  388. 

"  Hogue  V.  Minnesota  Packing  &  Provision  Co.,  59  Minn.  39. 

"» In  re  Wittenberg  Veneer  &  Panel  Co.,  108  Fed.  597. 

'"  Ellis  v.  Kreutzinger,  27  Mo.  311,  72  Am.  Dec.  270. 

'^Hale  v.  Life  Ind.  &  Inv.  Co.,  65  Minn.  548,  68  N.  W.  182.  See, 
also,  Brown  v.  Equitable  Life  Assur.  Soc,  75  Minn.  412,  78  N.  W. 
103,  671,  79  N.  W.  968. 

KERR,  INS.— 44 


690  PKOCEEDS  OF  POLICY.  §  231 

Whether  a  beneficiary  acquires  a  vested  interest  in  tlie 
moneys  to  be  paid  npon  tke  death  of  the  insured,  must  be 
detenuined  by  the  terms  and  conditions  of  the  contract  of 
insurance.  The  rule  is  that  in  an  ordinary  life  insurance 
policy,  made  payable  to  a  person  named,  the  rights  of  the 
beneficiary  are  vested  when  the  policy  is  issued,  and  that 
these  rights  cannot  be  divested  without  the  assent  of  the  ben- 
eficiaiy  himself. ''^^  But  policies  may,  and  often  do,  reserve 
such  a  control  to  the  insured  himself  as  to  leave  in  the  bene- 
ficiaiT,  until  the  death  of  the  insured,  nothing  but  a  contingent 
interest. 

It  is  often  said  that  the  certificates  of  beneficial  and  fra- 
ternal associations  differ  from  the  ordinary  life  policies  in 
this,  that  the  beneficiaries  in  the  former  have  only  a  contin- 
gent interest  until  the  death  of  the  insured,  and  that  their  in- 
terests do  not  become  vested  until  the  death  has  occurred 
■without  a  change  of  beneficiaries  being  made.  But  this  dis- 
tinction would  seem  to  rest  more  upon  the  terms  of  the  con- 
tract, than  upon  any  essential  difference  in  the  nature  of  the 
contracts  of  insurance. '^^     Where  the  contract  gives  the  in- 

^^Ricker  v.  Charter  Oak  Life  Ins.  Co.,  27  Minn.  195;  In  re  Kugler, 
23  La.  Ann.  455;  Pingrey  v.  National  Life  Ins.  Co.,  144  Mass.  374; 
Matlack  v.  Mutual  Life  Ins.  Co.,  180  Pa.  St.  360,  36  Atl.  1082;  Wil- 
maser  v.  Continental  Life  Ins.  Co.,  66  Iowa,  417;  Ferdon  v.  Canfield, 
104  N.  Y.  143. 

"Marsh  v.  Supreme  Council,  A.  L.  of  H.,  149  Mass.  515;  Supreme 
Council,  C.  K.  of  A.,  v.  Franke,  137  111.  118;  Jory  v.  Supreme  Coun- 
cil. A.  L.  of  H.,  105  Cal.  20,  45  Am.  St.  Rep.  17,  26  L.  R.  A.  733; 
Kline  v.  National  Ben.  Ass'n,  111  Ind.  462;  Chartrand  v.  Brace,  16 
Colo.  19,  12  L.  R.  A.  209;  Knights  of  Honor  v.  Watson,  64  N.  H.  517; 
Gutterson  v.  Gutterson,  50  Minn.  278,  52  N.  W.  530;  Simcoke  v. 
Grand  Lodge,  A.  O.  U.  W.,  84  Iowa,  383,  15  L.  R.  A.  114.  See,  also. 
Manning  v.  Ancient  Order  of  U.  W.,  86  Ky.  139,  9  Am.  St.  Rep.  270; 
Block  V.  Valley  Mut.  Ins.  Ass'n,  52  Ark.  201,  20  Am.  St.  Rep.  166; 
Metropolitan  Life  Ins.  Co.  v.  O'Brien,  92  Mich.  584,  52  N.  W.  1012; 
Johnson  v.  Van  Epps,  14  Bradw.  (111.)   2C1,  110  111.  551 


§  232  EIGHTS    OF   CREDITOKS.  691 

sured  the  right  to  change  beneficiaries,  and  points  out  the 
method  which  must  be  pursued,  this  method  is  fixed  and  bind- 
ing upon  the  insured,  and  he  has  no  right  to  effect  a  change  of 
beneficiaries  in  any  other  manner.'^'*  But  it  has  been  held 
in  the  absence  of  any  provisions  in  the  contract  providing  ex- 
pressly for  a  change  of  beneficiaries,  or  prohibiting  such 
change,  that,  by  reason  of  the  character  and  purjwses  of  fra- 
ternal and  beneficial  associations,  it  should  l>e  held  that  the 
power  to  change  the  beneficiary  is  vested  in  the  member  during 
his  lifetime.^^  Where  an  attempt  to  change  a  beneficiary 
fails,  a  previous  designation  of  the  beneficiary  remains  in 
force  if  valid."*^  A  change  of  beneficiary,  procured  by  fraud 
and  undue  influence,  is  ineffectual  to  deprive  the  beneficiary 


of  his  rights. ^^ 


Rights  of  Creditors. 


§  232.  Whether  or  not,  in  a  given  case,  creditors  of  an  in- 
sured are  entitled  to  recover  the  proceeds  of  a  life  insurance 
policy,  paid  for  by  moneys  invested  in  fraud  of  creditors,  de- 
pends upon  the  law  of  the  forum. 

The  creditors  of  an  insured  can  reach  the  proceeds  of  a  policy 
after  they  become  a  claim  in  favor  of  the  debtor  against  the 
company. 

'*  Holland  v.  Taylor,  111  Ind.  121;  Stephenson  v.  Stephenson,  64 
Iowa,  534,  21  N.  W.  19;  Supreme  Council,  A.  L.  of  H.,  v.  Smith,  45 
N.  J.  Bq.  466,  17  Atl.  770;  Supreme  Lodge,  K.  of  H.,  v.  Nairn,  60 
Mich.  44,    26  N.  W.  826;  Sanborn  v.  Black,  67  N.  H.  537,  35  Atl.  942. 

"Woodruff  V.  Tilman,  112  Mich.  188,  70  N.  W.  420;  Carpenter  v. 
Knapp,  101  Iowa,  712,  70  N.  W.  764;  Fischer  v.  American  Legion  of 
Honor,  168  Pa.  St.  279,  31  Atl.  1089;  Voigt  v.  Kersten,  164  111.  314, 
45  N.  E.  545. 

'"  Elsey  V.  Odd  Fellows'  Mut.  Relief  Ass'n,  142  Mass.  224,  7  N.  E. 
844;  Smith  v.  Boston  &  Maine, R.  R.  Ass'n,  168  Mass.  213,  46  N.  E. 
626;  Quinn  v.  Supreme  Council,  C.  K.,  99  Tenn.  80,  41  S.  W.  343.  As 
to  validity  of  change,  see  Heasley  v.  Heasley,  191  Pa.  St.  539,  43  Atl. 
364;  Sanborn  v.  Black,  67  N.  H.  537,  35  Atl.  942;  45  Cent.  Law  J.  491. 

"  Cason  V.  Owens,  100  Ga.  142,  28  S.  E.  75. 


692  PKOCEEDS   OF   rOLICY.  §  232 

It  follows,  from  wliat  has  already  been  said  eoncernmg  the 
rights  to  assign  the  proceeds  of  a  policy  after  maturity,  that 
the  creditors  of  the  party  to  whom  the  proceeds  belong  are  en- 
titled to  appropriate  the  same  in  satisfaction  of  their  debts^ 
unless  such  proceeds  are  exempt  from  the  claims  of  credit- 
ors.*^^ Where  an  insured  has  violated  the  conditions  of  a 
policy  his  creditors  have  no  better  right  to  compel  payment  of 
the  policy  under  a  process  of  garnishment  against  the  insured, 
than  the  insured  himself  has.^^  The  proceeds  of  a  policy^ 
covering  the  interest  of  a  mortgagee  during  the  year  of  re- 
demption, where  the  policy  is  procured  and  paid  for  by  the 
mortgagor,  belong  to  the  mortgagee  personally,  and  do  not 
enure  to  the  benefit  of  the  owner  of  the  equity,  where  no  rt^ 
demption  is  made.^°  Where  a  policy  on  the  life  of  an  insured 
is  payable  to  a  desigTiated  creditor  if  living,  if  not,  then  to  the 
rej)r6sentatives  of  the  assured,  the  creditor  must  prove  the 
existence  and  amount  of  his  debt,  in  order  to  recover  upon 
the  policy.^^  Creditors  cannot  claim  the  proceeds  of  a  policy 
issued  on  the  life  of  a  debtor  for  the  benefit  of  his  family, 
without  showing  that  the  premiums  were  paid  in  fraud  of 
their  riglits.^^  The  proceeds  of  a  policy  payable  to  the  as- 
sured or  his  order,^^  or  to  his  heirs,  executors,  administrators 

"  See  ante,  "Assignment  of  Policy  after  Maturity." 

'^Plienix  Ins.  Co.  v.  Willis,  70  Tex.  12;  Bernheim  v.  Beer,  56  Miss. 
149;  McLean  v.  Hess,  106  Ind.  555. 

*°  Carlson  v.  Presbyterian  Board  of  Relief,  67  Minn.  436. 

"Crotty  V.  Union  Mut.  Life  Ins.  Co.,  144  U,  S.  621.  See,  also,. 
Shaffer  v.  Spangler,  144  Pa.  St.  223,  22  Atl.  865;  Ulrich  v.  Reinoehl, 
143  Pa.  St.  238,  22  Atl.  862. 

*^  Pence  v.  Makepeace,  65  Ind.  345;  Weber  v.  Paxton,  48  Ohio  St. 
266;  Mutual  Life  Ins.  Co.  v.  Sandfelder,  9  Mo.  App.  285;  Holmes  v. 
Oilman,  138  N.  Y.  369,  20  L.  R.  A.  566;  Central  Bank  of  Washingtott 
V.  Hume,  128  U.  S.  195. 

"White  V.  Smith,  2  Willson,  Civ.  Cas.  Ct.  App.  (Tex.)  349. 


I 


§  232  -       EIGHTS    OF   CREDITORS.  G93 

or  assigns,^ ^  or  to  tlie  legal  representatives  of  tlie  assured,^*'' 
form  a  part  of  the  estate  of  the  insured,  and  are  for  the  benefit 
of  his  creditors.  Otherwise  if  the  policy  is  payable  to  his 
heirs.^^ 

Where  an  assured  takes  out  a  policy  payable  to  his  wife, 
and  pays  all  the  premiums  from  trust  moneys,  the  cestui  que 
trust  is  entitled  to  the  whole  insurance  fund.  Where,  how- 
ever, only  a  part  of  the  premiums  has  been  paid  with  tiiist 
moneys,  the  cestui  que  trust  is  entitled  to  such  a  proportionate 
share  of  the  proceeds  as  the  amount  of  his  money,  used  in  pay- 
ment of  premiums,  bears  to  the  money  paid  from  other 
sources.^"^  A  man  must  be  just  before  he  is  generous.  A 
husband  cannot  settle  insurance,  or  money,  or  property  in  any 
form,  upon  his  wife  or  friends,  in  fraud  of  creditors.  If  he 
attempts  to  do  so  the  creditors  are  entitled  to  the  aid  of  the 
courts  to  reach  property  so  settled,  in  whatever  form  it  is 
found.^^ 

In  Central  Bank  of  Washington  v.  Hume,^^  it  was  held  by 
the  supreme  court  of  the  United  States,  that  there  was  an  ob- 
vious distinction  between  the  transfer  of  a  policy  taken  out 
by  a  debtor  upon  his  own  life,  and  payable  to  himself  and  his 

"Rawson  v.  Jones,  52  Ga.  458;  Burton  v.  Farinholt,  86  N.  C.  260. 

»=>  People  V.  Phelps,  78  111.  147. 

«» Mullins  V.  Thompson,  51  Tex.  7;  Northwestern  Masonic  Aid 
Ass'n  V.  Jones,  154  Pa.  St.  99,  26  Atl.  253. 

''Dayton  v.  H.  B.  Claflin  Co.,  19  App.  Div.  (N.  Y.)  121.  See,  also, 
Pullis  V.  Robison,  73  Mo.  201. 

«» Merchants'  &  Miners'  Transp.  Co.  v.  Borland,  53  N.  J.  Eq.  282, 
31  Atl.  275. 

«»128  U.  S.  195.  See,  also,  Elliott's  Ex'rs  Appeal,  50  Pa.  St.  75;- 
McCutcheon's  Appeal,  99  Pa.  St.  137;  Aetna  Nat.  Bank  v.  United 
States  Life  Ins.  Co.,  24  Fed.  770;  Pence  v.  Makepeace,  65  Ind.  345; 
Succession  of  Hearing,  26  La.  Ann.  326;  Thompson  v.  Cundiff,  11 
Bush  (Ky.),  567;  Thompson  v.  American  Tontine  L.  &  S.  Ins.  Co., 
46  N.  Y.  675;  Emerson  v.  Bemis,  69  111.  541. 


694  PROCEEDS   OF   POLICY.  §  232 

legal  representatives,  and  the  obtaining  of  a  policy  by  a  per- 
son upon  the  insurable  interest  of  his  wife  and  children  in  his 
life,  the  policy  being  payable  to  them ;  and  that  the  creditors 
of  a  debtor  husband  are  not  entitled  to  recover  the  premiums 
paid  by  him  on  policies  issued  on  his  own  life  for  the  benefit  of 
and  payable  to  his  wife  and  eliildren,  where  there  is  no  evi- 
dence from  which  a  fraudulent  intent  on  the  part  of  the  latter 
or  the  insurance  companies  to  put  the  property  beyond  tho 
reach  of  the  creditors  can  be  inferred. 

The  case  of  Stokes  v.  Amerman  ^^  presents  the  difficult  and 

»«121  N.  Y.  337,  24  N.  E.  819.  See,  also,  Tompkins  v.  Levy,  87  Ala. 
263;  Leonard  v.  Clinton,  26  Hun  (N.  Y.),  288;  Cotton  v.  Vansittart, 
20  Grant  Ch.  (Up.  Can.)  244;  Holmes  v.  Oilman,  138  N.  Y.  369;  Rob- 
erts V.  Winton,  100  Tenn.  484,  41  L.  R.  A.  275 ;  Bartlett  v.  Goodrich, 
153  N.  Y.  421,  47  N.  E.  794;  Hendrie  &  B.  Mfg.  Co.  v.  Piatt,  13  Colo. 
App.  15,  56  Pac.  209;  Andrews  v.  Union  Cent.  Life  Ins.  Co.,  92  Tex. 
584,  50  S.  W.  572;  Lehman  v.  Gunn,  124  Ala.  213,  51  L.  R.  A.  112; 
Sternberg  v.  Levy,  159  Mo.  617,  60  S.  W.  1114,  30  Ins.  Law  J.  506; 
Northwestern  Masonic  Aid  Ass'n  v.  Jones,  154  Pa.  St.  99,  26  Atl.  253. 

In  Hendrie  &  B.  Mfg.  Co.  v.  Piatt,  13  Colo.  App.  15,  56  Pac.  209, 
it  was  held  that  a  creditor  has  no  legal  right  to  enforce  a  claim  to 
the  payment  of  his  debt  against  the  proceeds  of  insurance  upon  the 
life  of  the  deceased  debtor  for  the  benefit  of  his  wife  and  children, 
in  the  absence  of  fraudulent  intent,  unless  it  be  to  the  extent  of 
the  premiums  paid  by  the  debtor  subsequent  to  the  incurring  of  the 
debt  sued  on  and  during  his  insolvency,  if  he  was  insolvent.  And 
the  court  said:  "By  the  authorities  which  have  adjudicated  the 
question  independent  of  statute,  we  find  three  distinct  positions 
announced:  First.  That,  in  the  absence  of  actual  fraud,  the  fund  de- 
rived from  insurance  upon  his  own  life  by  an  insolvent  debtor  in 
favor  of  his  wife  or  child  or  children,  dependent  upon  him,  cannot 
be  reached  by  his  creditors,  and  made  subject  to  the  payment  of  his 
debts,  except,  possibly,  in  certain  contingencies,  which  we  will  here- 
after discuss,  the  amount  of  the  premiums  paid  by  the  insolvent 
debtor  during  insolvency.  In  support  of  this  doctrine,  either  in 
whole  or  in  part,  are  Central  Nat.  Bank  v.  Hume,  128  U.  S.  195,  9 
Sup.  Ct.  41;  Appeal  of  Elliott's  Ex'rs,  50  Pa.  St.  75;  Aetna  Nat.  Bank 
V.  United  States  Life  Ins.  Co.,  24  Fed.  770;  Central  Nat.  Bank  v. 
Hume,  3  Mackey,  D.  C.  360;  In  re  Anderson's  Estate,  85  Pa.  St.  202; 


§  232  BIGHTS    OF    CREDITORS.  C95 

novel  question  of  the  right  of  a  judgment  creditor  to  maintain 
an  action  to  subject  a  policy  to  his  claims,  before  the  policy 

Pence  v.  Makepeace,  65  Ind.  345;  Pinneo  v.  Goodspeed,  120  111.  536, 
12  N.  E.  196;  State  v.  Tomlinson,  16  Ind.  App.  672-675,  45  N.  E. 
1120;  Holmes  v.  Gilman,  138  N.  Y.  369,  34  N.  E.  205;  Stigler's  Ex'r 
V.  Stigler,  77  Va.  163,  2  Bigelow,  Frauds,  p.  129.  To  this  effect  in 
principle  are,  also,  Forrester  v.  Gill,  11  Colo.  App.  410,  53  Pac.  230; 
McLean  v.  Hess,  106  Ind.  555,  7  N.  E.  567.  Another  doctrine,  sup- 
ported by  some  authority,  is  that  the  procurement  of  such  insur- 
ance by  an  insolvent  is  a  voluntary  conveyance  or  gift,  which  is 
void  a.«  to  existing  creditors,  though  no  fraud  may  have  been  in- 
tended, and  that  the  whole  of  the  insurance  would  be  subject  to  the 
debts  of  the  insured.  The  principal  authorities  in  support  of  this 
doctrine  to  which  we  have  been  cited  seem  to  be  Feam  v.  Ward,  80 
Ala.  555,  2  So.  114;  Merchants'  &  Miners'  Transp.  Co.  v.  Borland,  53 
N.  J.  Eq.  282,  31  Atl.  272;  and  Stokes  v.  Coffey,  8  Bush  (Ky.),  553. 
Another  line  of  authorities  holds  that  in  such  cases  the  amount  of 
the  premiums  paid  by  the  insolvent,  and  that  alone,  of  the  proceeds, 
can  be  reached  by  his  creditors.  We  think  that  the  weight  of  au- 
thority is  in  favor  of  the  doctrine  announced  by  the  first  line  of  au- 
thorities, and  that  it  is  better  sustained  upon  reason  and  upon  prin- 
ciple. The  reasoning  by  which  the  courts  holding  to  this  view 
support  their  conclusions  commends  itself  most  highly  to  our  judg- 
ment. In  the  first  place,  it  is  undoubtedly  the  law,  as  held  almost 
if  not  quite  universally,  that  the  policy  is  the  contract  of  insurance, 
and  that,  the  moment  it  is  issued,  its  ownership  vests  in  the  bene- 
ficiary. The  applicant  for  it,  and  he  who  paid  the  premium  which 
secured  it,  cannot  thereafter  change,  assign,  alienate,  or  incumber 
it,  or  any  rights  to  be  secured  under  it  upon  compliance  with  its  pro- 
visions. He  cannot  even  defeat  it  by  a  refusal  to  pay  the  subse- 
quent premiums  required,  if  the  beneficiary  or  any  person  for  her 
pays  them.  The  contract  is  between  the  insurance  company  and  the 
beneficiary.  To  this  effect  are  the  authorities  above  cited,  and  also 
numerous  others  to  which  reference  might  be  made,  including  the 
following:  Wilburn  v.  Wilburn,  83  Ind.  55;  Yore  v.  Booth,  110  Cal. 
238,  42  Pac.  808;  Ricker  v.  Charter  Oak  Life  Ins.  Co.,  27  Minn.  193, 
6  N.  W.  771;  Bliss,  Ins.  §  318.  The  payments  of  subsequent  pre- 
miums do  not  create  new  contracts,  nor,  strictly  speaking,  do  they 
constitute  renewals  of  the  insurance  contract.  They  are  simply  the 
fulfillment  of  conditions  required  by  the  original  contract,  a  failure 
to  comply  with  which  would  work  a  forfeiture.  Besides,  the  con- 
tract is  based  upon  and  its  fruits  finally  realized,  if  at  all,  because 
of  the  insurable  interest  of  the  beneficiary  in  the  life  of  the  assured." 


696  PKOCEEDS  OF  TOLICY.  §  232 

becomes  due.  The  court  says :  "Contracts  for  the  future  pay- 
ment of  money,  depending  upon  conditions  to  be  performed, 
are  not,  for  any  reason  growing  out  of  their  uncertain  char- 
acter, exempt  from  the  claims  of  creditors.  Unmatured  life 
insurance  policies  have  been  treated  by  the  courts  as  possessing 
a  present  value  in  the  distribution  of  the  assets  of  insolvent 
insurance  companies,  *  *  *  and  we  perceive  no  reason 
why  the  interest  of  a  judgment  creditor  in  such  a  contract, 
arising  under  the  statute  permitting  a  wife  to  insure  her  hus- 
band's life,  may  not  be  declared  and  protected  by  the  courts. 
The  wife  cannot  be  compelleti  to  assign  the  policy,  nor  can 
her  interest  therein,  represented  by  premiums  to  the  extent 
of  $500,  be  affected  by  any  proceedings  on  the  part  of  such 
creditor.  [The  New  York  statute  allows  an  exempted  ap- 
propriation by  a  creditor  of  $500,  for  the  purchase  of  life  in- 
surance.] But  the  interest  of  a  creditor,  which  attaches  to  a 
contract  of  life  insurance,  in  virtue  of  the  statute,  and  by 
reason  of  the  fact  of  payment  by  the  judgment  debtor  of  pre- 
miums in  excess  of  $500,  may  be  declared  by  a  court  of  equity, 
and  impressed  upon  the  contract,  in  an  action  where  the  com- 
pany issuing  the  policy,  and  all  persons  interested  therein  are 
parties,  though  the  money  secured  thereby  is  not  due." 

From  the  authorities  cited  a  fair  inference  would  seem  to  be 
that  a  man  is  entitled  to  make  any  provision  he  chooses  for  the 
securing  of  insurance  on  his  own  life  payable  upon  his  death 
to  his  wife  and  children,  provided  he  does  not  thereby  commit 
a  fraud  upon  his  creditors;  that  whether  the  payment  of  a 
given  amount  for  the  procurement  of  such  insurance  payable 
to  his  wife  and  children  constitutes  a  fraud  upon  the  rights 
of  his  creditors,  and  what  if  any  right  the  creditors  have  to 
reach  the  proceeds  of  a  policy  so  bought,  must  depend  upon 
the  circumstances  of  a  given  case,  and  the  law  of  the  state 
where  the  transactions  were  had. 


■§  232  EIGHTS    OF   CREDITORS.  ^  697 

night  of  Assignee  in  Insolvency. 

An  assignee  in  bankruptcy  has  no  Insurable  interest  in  tlio 
life  of  the  bankrupt,  at  least  after  his  discharge.  Upon  a 
policy  on  the  life  of  a  bankrupt,  payable  at  his  death  to  his 
executors,  administrators,  or  assigns,  and  requiring  the  pay- 
ment of  an  annual  premium  during  the  life  of  the  bankrupt, 
the  only  beneficial  interest  which  passes  to  the  assignee  in 
l)ankruptcy  is  its  surrender  value,  or  net  reserve  at  the  time  of 
the  bankruptcy.  If  the  policy  has  no  cash  surrender  value, 
and  no  value  for  any  purpose  except  the  contingency  of  its 
TD'Ocoming  valuable  at  the  death  of  the  bankrupt  if  the  pre- 
miums are  kept  up,  it  does  not  pass  to  the  trustee  as  an  asset 
of  the  estate  of  the  bankrupt.^  ^  If  the  policy  provides  that 
if  the  assured  should  survive  until  a  stated  time,  then  a  stipu- 
lated sum  should  be  paid  to  him,  the  rights  of  the  insured  in 
the  policy  pass  to  his  assignee  in  insolvency,  under  an  assign- 
ment made  about  the  date  of  the  maturity  of  the  policy.*' - 
The  rights  of  the  bankrupt  in  an  endowment  policy  upon  his 
own  life,  pass  to  his  assignee  f^  and  the  proceeds  of  a  policy 
maturing  during  the  term  of  office  of  the  assignee,  belong  to 
him  rather  than  to  the  creditors.®^     An  assignment  by  a  debtor 

"  In  re  Steele,  98  Fed.  78;  Morris  v.  Dodd,  110  Ga.  606,  50  L.  R.  A. 
33;  In  re  Buelow,  98  Fed.  86;  In  re  McKinney,  15  Fed.  535.  See, 
also,  Larue's  Assignee  v.  Larue,  96  Ky.  326;  Barbour  v.  Connecticut 
Mut.  Life  Ins.  Co.,  61  Conn.  240,  23  Atl.  154;  Burton  v.  Farinholt, 
86  N.  C.  260;  Anthracite  Ins.  Co.  v.  Sears,  109  Mass.  383;  Day  v.  New 
England  Life  Ins.  Co.,  Ill  Pa.  St.  507,  56  Am.  Rep.  297,  4  Atl.  748; 
Hurlbut  V.  Hurlbut,  49  Hun,  189,  1  N.  Y.  Supp.  854;  Pace  v.  Pace,  13 
Fla.  438. 

•^'Bassett  v.  Parsons,  140  Mass.  169,  3  N.  E.  547;  Pierce  v.  Charter 
Oak  Life  Ins.  Co.,  138  Mass.  151. 

»» Brigham  v.  Home  Life  Ins.  Co.,  131  Mass.  319. 

"Rhode  Island  Nat.  Bank  v.  Chase,  16  R.  I.  37.  No  question  seems 
to  have  been  raised  as  to  whether  the  deceased's  interest  in  the 
policy  passed  by  deed  of  assignment. 


698  PKOCEEDS   OF   POLICY.  §  232 

of  all  his  property,  under  the  statute,  for  the  benefit  of  his 
creditors,  operates  as  an  assignment  of,  and  renders  void  a 
fire  insurance  policy  held  by  him,  which  contains  a  pro- 
vision that  it  shall  he  void  if  assigned  without  the  consent  of 
the  company.®^ 

"^Dube  V.  Mascoma  Mut.  Fire  Ins.  Co.,  64   N.  H.  527;    Adams  v. 
Rockingham  Mut.  Fire  Ins.  Co.,  29  Me.  292. 


CHAPTER  XVII. 

SUBROGATION. 

§  233.  Definition  and  Explanation.  • 

234.  Right  of  Insurer. 

Definition  and  Explanation". 

§  233.  Subrogation  is  the  substitution  of  one  person  in  place 
of  another,  whether  as  a  creditor  or  as  the  possessor  of  any 
other  rightful  claim,  so  that  he  who  is  substituted  succeeds  to 
the  rights  of  the  other  in  relation  to  the  debt  or  claim,  and  all 
his  rights,  remedies,  or  securities  connected  therewith. 

Subrogation,  as  the  term  is  used  in  the  law  of  insurance,  con- 
sists in  the  substitution  of  the  insurer  in  the  place  of  the  in- 
sured, in  relation  to  the  rights  of  the  latter  to  recover  against 
another  on  account  of  the  subject  matter  of  the  insurance. 

In  fire  insurance,  as  in  marine  insuranex:',  the  insurer,  upon 
paying  to  the  assured  the  amount  of  a  loss  on  the  property 
insured,  is  subrogated,  in  a  corresponding  amount,  to  tlie 
assured's  right  of  action  against  any  other  person  responsible 
for  the  loss.  .  But  the  right  of  the  insurer  against  such  other 
person  does  not  rest  upon  any  relation  of  contract,  or  privity 
between  them.  It  arises  out  of  the  nature  of  the  contract  of 
insurance,  as  a  contract  of  indemnity,  and  is  derived  from 
the  assured  alone,  and  can  be  enforced  in  his  right  only.  By 
the  strict  rules  of  the  conmion  law  it  must  be  asserted  in  the 
name  of  the  insured.  In  a  court  of  equity,  or  under  some 
state  codes,  it  may  be  asserted  by  the  insurer  in  his  own  name. 
But  in  any  form  of  remedy,  the  insurer  can  take  nothing  by 
subrogation  but  the  rights  which  accrued  to  the  insured,  and 


700  SUBKOGATION.  §  233 

if  no  i-iglit  of  action  against  another  accrued  to  the  insured, 
none  passes  to  the  insurer.^ 

If  the  assured  first  applies  to  the  tort-feasor,  whose  negli- 
gence caused  his  loss,  and  receives  damages  from  him,  that 
diminishes  his  loss  pro  tanto.  The  liability  of  the  tort-feasor 
is,  in  legal  effect,  first  and  principal,  and  that  of  the  insurer 
secondary,  not  only  in  order  of  time  but  in  order  of  ultimate 
liability.  The  assured  may  first  apply  to  whichever  h^e 
pleases.  If  he  first  applies  to  the  tort-feasor,  Avho  pays  him, 
he  thereby  diminishes  his  loss,  and  his  claim  against  the  in- 
surer is  only  for  the  balance.  If  he  first  applies  to  the  in- 
surer, and  receives  his  whole  loss,  he  holds  the  claim  against 
the  tort-feasor  in  trust  for  the  insurer.^  "Where  a  policy  pro- 
vides that  the  insured  shall,  on  receiving  payment,  assign  to 
the  insurer  his  claim  against  one  causing  the  loss,  the  covenant 
of  the  insurer  to  pay,  and  of  the  insured  to  assign,  are  de- 
pendent, and  performance  by  one  cannot  be  compelled  without 
performance  or  an  offer  to  perform  by  the  other.  A  release, 
given  by  the  insured  to  the  one  whose  negligence  caused  the 
loss,  is  a  defense  to  an  action  on  the  policy.^  And  if  the  in- 
sured settles  with  the  one  responsible  for  the  loss,  and  after- 
wards, concealing  that  fact  from  the  insurer,  receives  from 
it  payment  under  its  policy,  the  latter  may  recover  from  the 
former  the  pa^onents  so  made.  It  is  a  payment  made  in 
ignorance  of  circumstances  with  which  the  receiver  is  ac- 

» Piatt  V.  Richmond  Y.  R.  &  C.  R.  Co.,  108  N.  Y.  358;  Jackson  Co.  v. 
Boylston  Mut.  Ins.  Co..  139  Mass.  508,  52  Am.  Rep.  728;  Phoenix  Ins. 
Co.  V.  Erie  &  W.  Transportation  Co.,  117  U.  S.  312;  Kernochan  v.  New 
York  Bowery  Fire  Ins.  Co.,  17  N.  Y.  428;  Anderson  v.  Miller,  96  Tenn. 
35,  31  L.  R.  A.  604;   54  Cent.  L.  J.  51. 

=  Hart  V.  Western  R.  Corp.,  13  Mete.  (Mass.)   99. 

'Niagara  Fire  Ins.  Co.  v.  fidelity  T.  &  T.  Co.,  123  Pa.  St.  516,  16 
Atl.  790;  Chickasaw  County  Farmers'  Mut.  Fire  Ins.  Co.  v-.  Weller, 
98  Iowa,  731,  68  N.  W.  443. 


§  234  KIGUT    OF    IXSUKEK.  TOl 

quainted,  but  docs  not  disclose,  and  which,  if  disclosed,  would 
prevent  the  payment,  and  the  suppression  of  facts  is  there- 
fore fraudulent.^ 

Right  of  Insurer. 

§  234.  The  right  of  the  insurer  to  subrogation  exists  inde- 
pendent of  contract. 

An  insurer  who  has  paid  the  loss  for  which  another,  because 
of  his  negligence,  was  primarily  liable,  stands  in  the  position 
of  a  surety,  and  becomes  subrogated  to  the  rights  of  the  in- 
sured as  against  such  other  to  the  extent  of  the  amount  paid. 

An  ii^surer  which  has  been  compelled  to  pay  the  owner  for 
property  destroyed  by  fire,  has  a  right  of  action  against  the 
one  who  wrongfully  caused  the  loss,  without  any  express  as- 
signment of  such  right  by  the  assured,  and  under  most  codes 
may  sue  in  its  own  name.^  If  the  insurer  pays  to  the  o^^n^ier 
the  money  due  him  on  the  contract  of  insurance,  the  owmer  can- 
not properly  thereafter  sue  the  tort-feasor  for  the  loss  of  the 
property  without  making  the  insurer  a  party  plaintiff,  or,  in 
case  it  refuses,  a  party  defendant.^  And  a  release  or  discharge 
by  the  owner,  of  the  one  whose  negligence  caused  the  loss,  is  a 
release  of  the  insurer.  The  assured  cannot  recover  from  both 
for  the  entire  loss,  and  if,  after  recovery  from  the  insurer,  the 

*  Chickasaw  County  Farmers'  Mut.  Fire  Ins.  Co.  v.  "Weller,  9S 
Iowa,  731,  68  N.  W.  443.  See.  also,  Mathews  v.  St.  Louis  &  S.  F.  Ry. 
Co.,  121  Mo.  298,  25  L.  R.  A.  161;  Cliicago  &  A.  R.  Co.  v.  Glenny.  115 
111.  238,  51  N.  E.  896;  Fidelity  &  Casualty  Co.  v.  Eickhoff,  63  Minn. 
170,  65  N.  W.  351,  30  L.  R.  A.  586;  Leavitt  v.  Canadian  Pacific  Ry.  Co.. 
90  Me.  153,  38  L.  R.  A.  152;  Hare  v.  Headley,  52  N.  J.  Eq.  496,  35  Atl. 
445. 

''Connecticut  Fire  Ins.  Co.  v.  Erie  Ry.  Co.,  73  N.  Y.  399;  Hustisford 
Farmers'  Mut.  Ins.  Co.  v.  Chicago,  M.  &  St.  P.  Ry.  Co.,  66  Wis.  58; 
Sims  V.  Mutual  Fire  Ins.  Co.,  101  Wis.  586,  77  N.  W.  908. 

'Wunderlich  v.  Chicago  &  >..  W.  Ry.  Co.,  93  Wis.  132,  66  N.  W. 
1144;  Home  Mut.  Ins.  Co.  v.  Oregon  Ry.  &  Nav.  Co.,  20  Or.  569,  26 
Pac.  857;  Phenix  Ins.  Co.  v.  Pennsylvania  R.  Co.,  134  Ind.  215,  sa 
N.  E.  970. 


702  SUBROGATION.  §  234 

insured  receives  damages  from  the  otlier,  lie  liolds  tlie  dam- 
ages so  received  in  trust  for  the  insurer,  who  may  recover  them 
from  him  by  a  suit  in  equity.'^ 

Bights  of  Carriers  to  Subrogation. 

Since  the  right  by  way  of  subrogation  of  an  insurer,  on  pay- 
ment of  a  loss,  is  only  that  right  which  the  insured  has,  it 
follows  that  when  a  bill  of  lading  provides  that  the  carrier, 
when  liable  for  loss,  shall  h'ave  the  full  benefit  of  any  in- 
surance that  may  have  l>een  effected  upon  the  goods,  this  pro- 
vision is  valid  between  the  carrier  and  the  shipper,  and  there- 
fore limits  the  right  of  subrogation  of  the  insurer.  A  com- 
mon carrier,  warehouseman,  or  bailee,  whether  liable  by  law 
or  custom,  to  the  same  extent  as  an  insurer,  or  only  for  his  owti 
negligence,  may,  in  order  to  protect  himself  against  his  owai 
responsibility,  cause  the  goods  in  his  custody  to  be  insured  to 
their  full  value,  and  may  recover  for  any  loss  from  the  perils 
insured  against,  though  occasioned  by  the  negligence  of  his 
own  servants.  And  as  such  an  one  might  lawfully  obtain 
insurance  against  the  loss  of  the  goods,  though  occasioned  by 
his  own  negligence,  he  may  lawfully  stipulate  with  the  owner 
to  be  allowed  the  benefit  of  insurance  voluntarily  obtained  by 
the  latter.  Such  a  stipulation,  between  the  owner  and  the 
carrier,  does  not  impair  any  lawful  rights  of  the  insurer.  In 
the  absence  of  any  fraud  or  intentional  concealment,  the  un- 
disclosed existence  of  such  a  stipulation  subrogating  the  car- 

'  Monmouth  County  Mut.  Fire  Ins.  Co.  v.  Hutchinson,  21  N.  J.  Eq. 
107;  Connecticut  Fire  Ins.  Co.  v.  Erie  Ry.  Co..  73  N.  Y.  399;  Chicago, 
St.  L.  &  N.  O.  R.  Co.  V.  Pullman  Southern  Car  Co.,  139  IT.  S.  88; 
Chickasaw  County  Farmers'  Mut.  Fire  Ins.  Co.  v.  Weller,  98  Iowa, 
731,  68  N.  W.  443;  Sims  v.  Mutual  Fire  Ins.  Co.,  101  Wis.  586,  77  N. 
W.  908.  See,  also,  Niagara  Fire  Ins.  Co.  v.  Fidelity  T.  &  T.  Co.,  123 
Pa.  St.  516,  16  Atl.  790;  Insurance  Co.  of  North  America  v.  Martin, 
151  Ind.  209,  51  N.  E.  361;  Fidelity  T.  &  T.  Co.  v.  Peoples'  Nat.  Gas 
Co.,  150  Pa.  St.  8. 


^  234  EIGHT    OF    INSURER. 


703 


rier  to  the  riglits  of  the  insured,  does  not  constitute  a  defense 
to-  an  action  on  the  policy.  It  is  now  the  settled  law  that  a 
stipulation  in  the  bill  of  lading  allowing  the  carrier  the  bene- 
fit of  insurance  procured  by  the  owTier,  is  valid  as  between  the 
parties,  though  the  loss  be  occasioned  by  the  negligence  of 
the  carrier  or  his  agents,  and,  in  the  absence  of  fraudulent 
concealment  or  misrepresentation  the  insurer  can  maintain 
no  action  against  the  carrier  upon  terms  inconsistent  with  the 
stipulation.*  But  a  shipper  who  contracts  to  give  the  carrier 
the  benefit  of  any  insurance  on  freight  cannot,  in  case  of  loss 
through  the  carrier's  negligence,  recover  upon  a  policy  cover- 
ing the  freight  which  stipulates  that  in  case  of  loss  the  insurer 
shall  be  subrogated  to  all  rights  of  the  shipper  against  the 
carrier,  and  that  if  any  right  of  the  carrier  to  recover  against 
any  person  is  lost  by  any  act  of  the  insured,  or  if  the  insurance 
is  made  for  the  benefit  of  the  carrier,  the  insurer  shall  not  be 
liable.^ 

Subrogation  of  Insurer  to  Rights  of  Mortgagee  or  Creditor. 

Where  a  mortgagee  insures  solely  on  his  o^vn  account,  it  is 
but  an  insurance  on  his  debt,  and  an  extinguishment  of  the 
debt  extingiiishes  his  rights  under  the  policy.  But  if  the  fire 
occurs  before  the  payment  or  extinguishment  of  the  debt  and 
mortgage,  the  insurers  are  bound  to  pay  the  amount  of  the 
debt,  not  exceeding  the  stipulated  amount  of  insurance,  and 
upon  such  payment  are  often  entitled  by  contract  to  an  assign- 
ment of  the  debt  from  the  mortgagee,  and  may  recover  the 
same  from  the  mortgagor,  either  at  law  or  in  equity,  accord- 

» Jackson  Co.  v.  Boylston  Mut.  Ins.  Co.,  139  Mass.  508;  Phoenix  Ins. 
Co.  V.  Erie  &  W.  Transportation  Co.,  117  U.  S.  312;  Wager  v.  Provi- 
dence Ins.  Co.,  150  U.  S.  99;  Piatt  v.  Richmond  Y.  R.  &  C.  R.  Co.,  108 
N.  Y.  358. 

» Fayerweather  v.  Phenix  Ins.  Co.,  118  N.  Y.  324. 


704  SDBKOGATION.    .  §  234r 

ing  to  circumstances.^*^  But  an  insurer  wlien  paying  insur- 
ance covering  only  part  of  a  mortgage  debt,  is  not  subrogated 
to  the  rights  of  the  mortgagee  until  the  mortgage  debt  is  paid 
in  fulL^^  Where  a  policy  provides  that  the  loss,  if  any,  shall 
be  payable  to  the  mortgagee,  that  as  to  the  mortgagee  the  pol- 
icy should  not  be  invalidated  by  any  act  or  neglect  of  the  mort- 
gagor, that  if  the  insurance  company  paid  the  mortgage, 
claiming  that  as  to  the  mortgagor  no  liability  existed,  it 
should,  to  the  extent  of  payment,  become  entitled  to  an  assign- 
ment of  the  mortgage  debt  and  all  securities,  the  insurer  does 
not  become  subrogated  to  the  rights  of  the  mortgagee  unless 
it  was  not  in  fact  liable  to  the  mortgagor.^-  Where  the  mort- 
gagor assigns  a  policy  to  the  mortgagee  as  part  security  for 
a  mortgage  debt,  and  afterwards  satisfies  the  mortgage,  he  be- 
comes entitled  to  subrogation  to  the  rights  of  the  mortgagee 
in  the  policy. -^^ 

"Ch.  XVI;  Royal  Ins.  Co.  v.  Stinson,  103  U.  S.  25.  See  cases  in 
note  11, 

"  Phenix  Ins.  Co.  v.  First  Nat.  Bank,  85  Va.  765,  2  L.  R.  A.  667. 
See,  also,  as  to  subrogation  of  insurer  to  mortgagee's  rights,  Sussex 
County  Mut.  Ins.  Co.  v.  Woodruff,  26  N.  J.  Law,  541;  Concord  Union 
Mut.  Fire  Ins.  Co.  v.  Woodbury,  45  Me.  447;  Grange  Mill  Co.  v.  West- 
ern Assur.  Co.,  118  111.  396;  Bound  Brook  Mut.  Fire  Ins.  Ass'n  v. 
Nelson,  41  N.  J.  Eq.  485;  Attleborough  Sav.  Bank  v.  Security  Ins. 
Co.,  1G8  Mass.  147,  46  N.  E.  390;  Hare  v.  Headley,  52  N.  J.  Eq.  496,  35 
Atl.  445:  Ordway  v.  Chace,  57  N.  J.  Eq.  478,  42  Atl.  149;  Heins  v. 
Wicke,  102  Iowa,  396,  71  N.  W.  345;  Merchants'  Ins.  Co.  v.  Story,  13 
Tex.  Civ,  App.  124,  35  S.  W.  68. 

"  Traders'  Ins.  Co.  v.  Race,  142  111.  338,  31  N.  E.  392. 

"  Billings  V.  German  Ins.  Co.,  34  Neb.  502,  52  N.  W.  397,  18  Am. 
Law  Reg.  737.  See,  also,  as  to  insurance  obtained  by  mortgagor  for 
protection  of  mortgage  debt,  Pearman  v.  Gould,  42  N.  J.  Eq.  4;  Pen- 
dleton V.  Elliott,  67  Mich.  496,  35  N.  W.  97;  Traders'  Ins.  Co.  v.  Race, 
142  111.  338,  31  N.  E.  392;  Wood  v.  Northwestern  Ins.  Co.,  46  N.  Y. 
421. 

As  to  right  of  agent  to  be  subrogated  to  extent  of  premiums  paid 
by  him,  see  Boston  Safe  D.  &  T.  Co.  v.  Thomas,  59  Kan.  470,  53  Pac. 
472. 


CHAPTER  XVIIL 

WAIVER  AND   ESTOPPEL. 
§  235.  Definition. 

236.  Division. 

237.  By  Whom. 

238.  Estoppel. 

§  235.  Definition  —  A  waiver  is  a  voluntary  and  intentional 
relinquishment  of  a  known  right  —  an  election  by  one  to  dis- 
pense with  something  of  value  or  to  forego  some  advantage  he 
might  have  taken  or  insisted  upon. 

§  236.  Division  — A  waiver  may  be  either  express,  as  where 
one  explicitly  relinquishes  a  right;  or  implied,  that  is  by  any 
acts  or  statements  on  the  part  of  one  having  the  right  to  en- 
force a  forfeiture  which  might  fairly  and  reasonably  induce 
the  opposite  party  to  believe  that  the  forfeiture  is  dispensed 
with  or  excused,  and  which  influence  him  to  rely  thereon  in 
good  faith  and  act  accordingly.  Proof  of  an  implied  waiver 
must  show 

(a)  Knowledge  on  the  part  of  the  one  waiving  of  the 

facts  giving  him  the  right  to  insist  upon  the  for- 
feiture, and 

(b)  Acts,  words  or  circumstances  from  which  it  is 

fairly  inferable  that  he  did  not  intend  to  insist 

upon  or  assert  the  forfeiture. 
§  237.  By  Whom  —  Either  party  to  an  insurance  contract  can 
waive  the  benefit  and  enforcement  of  provisions  inserted  for 
his  advantage. 

§  238.  Estoppel  —  An  estoppel  in  pais  arises  when  one  by  his 
acts  or  representations,  or  silence  when  he  should  speak,  in- 
tentionally, or  by  culpable  negligence,  induces  another  to  be. 
lieve  that  certain  facts  exist,  or  that  the  former  will  do  certain 
things,  and  such  other  rightfully  acts  on  the  belief  so  induced 
and  will  be  prejudiced  by  permitting  the  one  to  act  contrary 
to  the  belief  he  has  induced. 

Waiver  is  a  voluntary  act,  and  implies  an  election  by  one 
in  possession  of  a  rioht,  and  with  full  knowledge  of  the  facts 
KERR,  INS.— 45 


706  WAIVER   AND   ESTOPPEL.  §§  235-238 

concerning  it,  to  do  or  forbear  from  doing  something  incon- 
sistent with  the  existence  of  the  right  and  his  intention  to  as- 
sert it.  The  foundation  of  the  doctrine  of  estoppel  lies  in  the 
desire  of  the  courts  to  promote  and  enforce  good  faith  and 
fair  dealing,  and  to  that  end  the  rule  has  been  formulated  that 
if  a  party  to  a  contract,  knowing  of  the  forfeiture  of  the 
rights  of  the  other  party  thereimder,  so  bears  himself  there- 
after in  relation  to  the  contract,  as  fairly  to  lead  the  other  to 
believe  and  act  on  the  belief  that  he  still  recognizes  the  con- 
tract to  be  in  force  and  binding  upon  him,  he  will  thereafter 
be  estopped  from  asserting  that  forfeiture. 

The  conditions  of  any  contract  may  be  waived  by  the  mu- 
tual consent  of  the  parties  to  it,  or  by  the  party  for  whose  bene- 
fit the  conditions  were  intended.  A  waiver  of  a  stipulation, 
in  an  agreement,  must,  to  be  effectual,  not  only  be  made  in- 
tentionally, but  with  knowledge  of  the  circumstances.  This 
is  the  rule  whether  there  be  a  direct  and  precise  agreement  to 
waive,  or  whether  it  be  sought  to  deduce  a  waiver  from  the 
acts,  conduct  or  declarations  of  the  party. 

The  doctrine  of  waiver,  as  asserted  against  insurance  com- 
panies, in  connection  with  insurance  contracts,  to  avoid  the 
strict  enforcement  of  conditions  contained  in  their  contracts, 
is  only  another  name  for  the  doctrine  of  estoppel.  It  can 
only  be  invoked  where  the  conduct  of  the  companies  has  been 
such  as  to  induce  action  in  reliance  upon  it,  and  where  it 
would  operate  as  a  fraud  upon  the  assured  if  they  were  after- 
Avards  allowed  to  disavow  their  conduct  and  enforce  the  condi- 
tions. To  a  just  application  of  this  doctrine  it  is  essential 
that  the  party  sought  to  be  estopped  from  denying  the  waiver 
claimed,  should  be  shoAvn  to  have  been  apprised  of  all  the 
facts,  prior  to  or  at  the  time  of  the  alleged  waiver.  To  oper- 
ate by  way  of  estoppel  in  pais,  or  equitable  estoppel,  it  is  nec- 
essary that  the  act,  declaration,  or  silence,  as  the  case  may 


§§  235-238  WAIVER   AXD    ESTOPrEL.  707 

be,  of  the  insurer,  should  be  of  such  a  nature,  and  brought  to 
the  knowledge  and  notice  of  the  insured  under  such  circum- 
stances, as  to  justifiably  influence  him,  while  acting  honestly, 
fairly,  and  reasonably,  in  such  a  way,  and  to  such  an  extent, 
that  the  repudiation  of  such  inference,  drawm  by  the  insured, 
and  acted  on  by  him,  would  work  to  his  prejudice. 

In  the  case  of  an  express  waiver  of  a  forfeiture,  the  old  con- 
tract is  modified,  or  a  new  contract  is  made,  according  to  cir- 
cumstances. In  the  case  of  an  implied  waiver,  or  an  estoppel, 
the  law  simply  operates  to  prevent  the  party  who  might  have 
claimed  the  forfeiture,  from  asserting  it.  Thus  an  insurer 
may  waive  the  payment  of  the  premium  when  it  is  due,  or  any 
act  forbidden  by  the  policy,  or  which  pe7'  se  avoids  the  policy, 
but  the  basis  of  the  waiver,  if  it  be  implied,  is  estoppel.  Un- 
less with  knowledge  of  a  forfeiture  actually  existing  the  in- 
surer does  or  omits  some  act  whereby  the  assured  has  just 
ground  to  believe,  does  believe,  and  acts  on  the  belief  that  the 
insurer  wdll  continue,  or  restore  the  contract,  and  will  not  in- 
sist upon  the  forfeiture,  there  is  no  estoppel,  and  there  can 
be  no  waiver.^ 

Where  there  has  been  a  breach  of  a  condition  contained  in 
an  insurance  policy,  the  insurer  may  or  may  not  take  advan- 
tage of  the  breach  or  claim  the  forfeiture.  It  may  consult  its 
own  interests,  and  choose  to  waive  the  forfeiture,  and  this  it 
may  do  by  express  language  to  that  effect,  or  by  acts  from 
which  an  intention  to  waive  may  be  infeiTed,  or  from  which  a 
waiver  follows  as  a  legal  resulf.     A  waiver  cannot  be  in- 

^Unsell  V.  Hartford  L.  &  A.  Ins.  Co.,  32  Fed.  443;  Thompson  v. 
Knickerbocker  Life  Ins.  Co.,  104  U.  S.  252;  Equitable  Life  Assur. 
Soc.  V.  McElroy  (C.  C.  A.),  83  Ped.  638:  Kenton  Ins.  Co.  v.  Wiggin- 
ton,  89  Ky.  330,  7  L.  R.  A.  81;  Northwestern  Mut.  Life  Ins.  Co.  v, 
Amerman,  119  111.  329;  Hartford  L.  A.  Ins.  Co.  v.  Unsell,  144  U.  S. 
439;  Carlsor  v.  Supreme  Council,  A.  L.  H.,  115  Cal.  466,  35  L.  R.  A. 
643;  Trippe  v.  Provident  Fund  Soc,  140  N.  Y.  23. 


708  WAIVEK  AND  ESTOPPEL.  §§  235-238- 

f erred  from  mere  silence,  unless  there  be  a  duty  to  speak,  and 
'silence  be  likely  to  mislead,  so  that  in  effect  a  fraud  is  per- 
petrated. An  insurer  is  not  obliged  to  say  or  do  anything^ 
to  make  a  self-executing  forfeiture  effectual.  It  may  wait 
until  a  claim  is  made  under  the  policy,  and  then,  in  denial 
thereof,  or  in  defense  of  a  suit  commenced  therefor,  allege 
tlie  forfeiture.  But  if,  in  any  negotiations  or  transactions 
with  the  insured,  after  a  forfeiture  has  taken  place,  and  has 
come  to  the  knowledge  of  the  insurer,  it  recognizes  the  con- 
tinued validity  of  the  policy,  or  does  acts  based  thereon,  or 
requires  the  insured,  by  virtue  thereof,  to  do  some  act,  or  in- 
cur some  trouble  or  expense,  the  fo'rfeiture  is,  as  a  matter  of 
law,  waived.^ 

Forfeitures  are  not  favored,  either  in  law  or  in  equity .. 
Stipulations  providing  for  forfeiture  will  be  strictly  construed, 
and  courts  are  often  prone  to  recognize  and  give  effect  to  any 
circumstances  that  indicate  an  election  to  waive  a  forfeiture, 
or  any  agreement  to  do  so  on  which  the  other  party  has  relied 
and  acted.  Any  agreement,  declaration,  or  course  of  action, 
on  the  part  of  an  insurance  company,  which  leads  the  insured 
honestly  to  believe,  and  warrants  him  in  believing,  that  by 
conforming  thereto  a  forfeiture  of  his  policy  will  not  be  in- 
curred, followed  by  due  conformity  on  his  part,  will  estop  the 
company  from  thereafter  insisting  upon  a  forfeiture,  although 
it  might  be  claimed  under  the  express  language  of  the  con- 
tract. But  while  courts  do  not  favor  forfeitures,  they  cannot 
avoid  enforcing  them  w^hen  the  party  by  whose  default  they 
are  incurred  cannot  show  some  good  and  suitable  ground  in 

» Allen  V.  Vermont  Mut.  Fire  Ins.  Co.,  12  Vt.  366;  Cans  v.  St.  Paul 
F.  &  M.  Ins.  Co.,  43  Wis.  109,  28  Am.  Rep.  535;  Knickerbocker  Life 
Ins.  Co.  V.  Norton,  96  U.  S.  234;  Weidert  v.  State  Ins.  Co.,  19  Or.  261. 
20  Am.  St.  Rep.  809. 


§§  235-238  WAIVER  and  estoppel.  709 

the  conduct  of  the  other  party  on  which  to  base  a  reasonable 
excuse  for  the  default. 

On  the  question  of  a  waiver  of  an  express  condition  of  a 
written  contract,  or  consent  that  such  condition  need  not  be 
complied  with  after  its  breach,  there  must  be  evidence  that  the 
subject  matter  of  the  waiver  and  consent  was  in  the  minds  of 
the  parties  at  the  time,  and  that  the  acts  constituting  the  al- 
leged waiver  were  consciously  and  purposely  done  and  recog- 
nized by  the  minds  of  the  parties  coming  together  upon  the 
identical  proposition.  There  is  no  estoppel  where  both  par- 
ties, with  equal  opportunities  of  knowledge,  or  with  the  same 
knowledge,  are  each  honestly  mistaken  concerning  the  facts.'' 

A  waiver  must  be  subsequent  to  the  written  contract,  and 
to  be  operative  must  be  made  not  only  with  knowledge  of  the 
forfeiture,  and  with  intent  to  waive  the  provisions  of  the  ex- 
isting contract,  but  must  be  supported  by  a  valuable  considera- 
tion, or  become  operative  by  way  of  estoppel.  An  intent  to 
waive  cannot  be  entertained  from  the  mere  fact  of  knowledge, 
in  the  face  of  ai^  express  teiin  of  the  contract  made  and  deliv- 
ered subsequent  to  that  knowledge.  Thus  the  mere  fact  of 
knowledge,  by  the  insurer,  prior  to  the  issuance  of  the  policy, 
of  the  intention  of  insured  to  take  out  other  insurance,  is  not 
of  itself  a  waiver  of  the  condition  in  the  policy  subsequently 
delivered.^  Knowledge  that  a  house  was  vacant  at  the  time  of 
the  assignment  of  a  policy,  is  no  consent  that  it  shall  remain  so 

'Brant  v.  Virginia  Coal  &  Iron  Co.,  93  U.  S.  326;  Johnson  v.  Con- 
necticut Fire  Ins.  Co.,  84  Ky.  470;  Lyon  v.  Travelers'  Ins.  Co.,  .5-5 
Mich.  141;  Couch  v.  City  Fire  Ins.  Co.,  37  Conn.  248;  Weidert  v.  State 
Ins.  Co.,  19  Or.  261.  20  Am.  St.  Rep.  809;  Hartford  L.  A.  Ins.  Co.  v. 
Unsell,  144  U.  S.  450;  Hartford  Fire  Ins.  Co.  v.  Small  (C.  C.  A.),  66 
Fed.  493. 

*  United  Firemen's  Ins.  Co.  v.  Thomas  (C.  C.  A.),  82  Fed.  409,  47  L. 
R.  A.  454. 


710  WAIVER   AND    ESTOPPEL.  §§  235-238 

for  a  prohibited  period.^  A  specific  waiver  of  a  condition, 
for  a  limited  time,  ends  upon  the  expiration  of  the  time  fixed.'* 
A  waiver  presupposes  actual  knowledge  on  the  part  of  some- 
one having  real  or  apparent  authority  to  represent  and  bind 
the  insurer,  of  the  breach  of  condition  which  is  to  be  waived/ 
Constructive  notice,  as  by  the  filing  of  an  instrument,  is  not 
sufficient;^  nor  notice  of  an  intention  on  the  part  of  an  in- 
sured to  violate  a  condition.^ 

An  agent  will  not  be  held  to  have  due  knowledge  of  out- 
standing insurance,  Avhere  by  mistake  lie  supposes  it  to  have 
expired.  ^°  Mere  knowledge  of  a  breach,  and  silence  on  the 
part  of  the- insurer,  does  not  constitute  a  waiver  by  it.^^  If  it 
be  sought  to  prove  a  waiver  by  knowledge  or  an  act  of  an 
agent,  it  must  be  shown  that  the  agent  had  authority  to  act  for 
the  company  in  the  premises,  and  either  that  he  was  so  acting 
when  the  knowledge  came  to  him,  or,  if  the  knowledge  came  to 
him  while  not  acting  as  agent,  that  it  was  present  in  his  mind 
when  the  policy  was  issued,  or  when  he  did  some  act  in  the 
course  of  his  duty  as  agent,  in  recognition  of  the  validity  of 
the  policy. -^^ 

"  Sutherland  v.  Eureka  F.  &  M.  Ins.  Co.,  110  Mich.  668,  68  N.  W. 
985;  Ranspach  v.  Teutonia  Fire  Ins.  Co.,  109  Mich.  699,  67  N.  W.  967. 

« Betcher  v.  Capital  Fire  Ins.  Co.,  78  Minn.  240. 

'  Slobodisky  v.  Phenix  Ins.  Co.,  52  Neb.  395,  72  N.  W.  483,  53  Neb. 
816,  74  N.  W.  270;  Finch  v.  Modern  Woodmen,  113  Mich.  646,  71 
N.  W.  1104;  Ellis  v.  Insurance  Co.  of  North  America,  32  Fed.  646. 

» Shaffer  v.  Milwaukee  Mechanics'  Ins.  Co.,  17  Ind.  App.  204,  46 
N.  E.  557. 

» Home  Fire  Ins.  Co.  v.  Wood,  50  Neb.  381,  69  N.  W.  941. 

1°  Sanders  v.  Cooper,  115  N.  Y.  279. 

"Betcher  v.  Capital  Fire  Ins.  Co.,  78  Minn.  240. 

"Goldin  V.  Northern  Assur.  Co.,  46  Minn.  471;  Phoenix  Ins.  Co.  r. 
Flemming,  65  Ark.  54;  Bell  v.  Lycoming  Fire  Ins.  Co.,  19  Hun 
(N.  Y.),  238. 


§§  235-238  WAIVER  and  EsxorrEL.  711 

Conclusiveness  of  Waiver. 

A  complete  waiver  is  usually  held  to  be  complete,  final  and 
in-evocable,  especially  if  it  has  been  acted  upon.^^  But 
where  no  prejudice  results,  or  the  waiver  be  without  consid- 
eration, it  can  sometimes  be  withdrawn.  ^^ 

Waiver  a  Question  of  Pact. 

Whether  a  given  state  of  admitted  or  uncontroverted  facts 
works  a  forfeiture  or  lapse  of  a  policy  of  insurance,  is  a  ques- 
tion of  law.  When  the  evidence  is  conflicting  the  truth  must 
be  deteraiined  as  a  question  of  fact.^^ 

When  the  Forfeiture  is  Effectual. 

Provisions  of  insurance  policies  providing  for  forfeitures, 
are  generally  self -executing.  An  insurance  company  is  not 
bound  to  do  or  say  anything  to  give  effect  to  a  forfeiture  pre- 
scribed by  the  policy,  and  is  not  bound  to  elect  to  declare  void, 
or  continue  a  policy,  which  stipulates  that  it  shall  be  void 
upon  the  happening  of  specific  occurrences,  without  the  con- 
sent of  the  insurer.^® 

Waiver  of  Conditions  of  Standard  Policies. 

In  speaking  of  the  provisions  of  the  standard  policy,  the 
New  York  court  of  appeals  has  said :  "Now,  as  heretofore,  it 
is  competent  for  the  parties  to  a  contract  of  insurance,  by 
agreement  in  writing,  or  by  parol,  to  modify  the  contract  after 
the  policy  has  been  issued,  or  to  waive  conditions  or  forfeit- 

"  Illinois  Live  Stock  Ins.  Co.  v.  Baker,  153  111.  240,  38  N.  B.  627; 
Piatt  V.  Aetna  Ins.  Co.,  153  111.  113,  26  L.  R.  A.  853. 

1*  See  ante,  "Waiver  of  Proofs  of  Loss,"  notes  149-153. 

^'^  Pool  V.  Milwaukee  Mechanics'  Ins.  Co.,  91  Wis.  530,  51  Am.  St. 
Rep.  919;  Cleaver  v.  Iraders'  Ins.  Co.,  71  Mich.  421,  39  N.  W.  571, 

i-'Kyte  V.  Commercial  Union  Assur.  Co.,  149  Mass.  116;  Carey  v. 
German  American  Ins.  Co..  84  Wis.  80;  Betcher  v.  Capital  Fire  Ins. 
Co.,  78  Minn.  240. 


Y12  WAIVER  AND   ESTOPPEL.  §§  235-238 

ures.  Tlie  power  of  agents,  as  expressed  in  the  policy,  may 
be  enlarged  by  usage  of  the  company,  its  course  of  business, 
or  by  its  consent,  express  or  implied.  The  principle  that 
courts  lean  against  forfeitures  is  unimpaired,  and  in  weighing 
evidence  tending  to  show  a  waiver  of  conditions  or  forfeitures 
the  court  may  take  into  consideration  the  nature  of  the  partic- 
ular condition  in  question,  whether  a  condition  precedent  to 
any  liability,  or  one  relating  to  the  remedy  merely,  after  a  loss 
has  been  incurred.  But  where  the  restrictions  upon  an  agent's 
authority  appear  in  the  policy,  and  there  is  no  evidence  tend- 
ing to  show  that  his  powers  have  been  enlarged,  there  seems 
to  be  no  good  reason  why  the  authority  expressed  should  not  be 
regarded  as  the  measure  of  his  power,  nor  is  there  any  reason 
why  courts  should  refuse  to  enforce  forfeitures  plainly  in- 
curred, which  have  not  been  expressly  or  impliedly  waived  by 
the  company."^'^  But  the  better  rule  is  that  the  requirements 
of  a  statute, — and  the  conditions  of  a  standard  policy  are  cer- 
tainly required  by  statute, — can  only  be  waived  in  the  manner, 
and  according  to  the  terms  prescribed  thereby.  ^^ 

1^  Quinian  v.  Providence  Wash.  Ins.  Co.,  133  N.  Y.  365,  31  N.  E.  31. 
See,  also,  Harris  v.  Plioenix  Ins.  Co.,  85  Iowa,  238,  52  N.  W.  128; 
Union  Cent.  Life  Ins.  Co.  v.  Pollard,  94  Va.  146,  36  L.  R.  A.  271;  Hicks 
V.  British  America  Assur.  Co.,  162  N.  Y,  284;  Hobkirk  v.  Phoenix 
Ins.  Co.,  102  Wis.  13,  78  N.  W,  160.    See  ante,  c.  3,  note  77. 

^'Straker  v.  Phenix  Ins.  Co.,  101  Wis.  413,  77  N.  W.  752;  O'Neil 
V.  American  Fire  Ins.  Co.,  166  Pa.  St.  72;  Anderson  v.  Manchester 
Fire  Assur.  Co.,  59  Minn.  182  (original  opinion  holding  standard 
policy  legal  and  valid).  In  Union  Cent.  Life  Ins.  Co.  v.  Pollard, 
94  Va.  146,  the  supreme  court  of  Virginia  said  (page  153),  speaking 
of  the  law  regulating  the  making  of  a  contract  of  insurance  in 
that  state:  "It  is  a  statutory  rule  for  the  regulation  of  contracts 
of  insurance,  which  prescribes  their  scope  and  effect,  and  determines 
the  duties  and  obligations  of  contracting  parties.  It  is  therefore  as 
much  a  part  of  every  contract  *  *  *  made  after  that  statute 
was  passed  as  if  incorporated  in  it,  the  general  rule  being  that  laws 
in  existence  are  necessarily  referred  to  in  all  contracts  made  under 


§§  235-238  WAIVER  axd  estoppel.  713 

On  tlie  assumption  that  acts  formulating  and  prescribing 
the  tei-ms  and  conditions  of  standard  policies  are  valid,  it  has 
been  held  that  the  provisions  of  such  policies  are  binding  upon 
the  parties,  and  can  only  be  changed  or  waived  in  the  manner 
indicated  by  the  acts.^^  A  statutory  provision  that  no  action 
shall  be  begun  on  an  insurance  policy  within  ninety  days  after 
notice  of  loss,  has  been  given,  prevents  the  insured  from  bring- 
ing suit  within  that  time,  although  the  insurer,  prior  thereto, 
has  absolutely  denied  liability.^'^  This  is  at  variance  with  the 
general  rule  governing  voluntary  contracts  of  insurance, 
which  holds  that  a  denial  of  liability  waives  the  performance 
by  the  insured  and  deprives  the  insurer  of  the  beneiit  of  con- 
ditions subsequent  to  the  loss,  and  precedent  to  the  mainte- 
nance of  an  action.  ^^ 

Collusion  Between  Agent  and  Insured. 

An  insured  cannot  take  advantage  of  a  waiver  resulting 
from  any  fraudulent  and  collusive  agreement  between  him- 
self and  an  agent  of  the  insurer.  No  man  can  take  advantage 
of  his  own  wrong-ful  act.^^ 

Waiver  Must  be  Pleaded. 

A  general  denial  does  not  tender  an  issue  of  waiver. ^^ 

such  laws,  and  that  no  waiver  of  the  parties,  nor  stipulations  in  the 
contract,  can  change  the  law,"— citing  Hermany  v.  Fidelity  Mut. 
Life  Ass'n.  151  Pa.  St.  17;  Fidelity  Mut.  Life  Ass'n  v.  Ficklin,  74 
Md.  172,  185;  Queen  Ins.  Co.  v.  Leslie,  47  Ohio  St.  409,  9  L.  R.  A.  45; 
White  V.  Provident  S.  Life  Assur.  Soc,  163  Mass.  108,  27  L.  R.  A.  398. 

"Hobkirk  v.  Phoenix  Ins.  Co.,  102  Wis.  13,  78  N.  W.  161;  Anderson. 
V.  Manchester  Fire  Assur.  Co.,  59  Minn.  182. 

'"  Finster  v.  Merchants'  &  B.  Ins.  Co.,  97  Iowa,  9,  65  N.  W.  1004. 

"  Finster  v.  Merchants'  &  B.  Ins.  Co.,  97  Iowa,  9,  65  N.  W.  1004. 

=^Rockford  Ins.  Co.  v.  Nelson,  75  111.  548;  ante,  c.  8,  "Agents." 

■-'^Guerin  v.  St.  Paul  F.  &  M.  Ins.  Co.,  44  Minn.  20;  Continental  Ins. 
Co.  V.  Vaniue,  126  Ind.  410,  26  N.  E.  119. 


714  WAIVER  AND   ESTOPPEL.  §§  235-238 

Illustrations. 

Waiver  —  At  Time  of  Issuing  Policy. 

An  insurance  company,  whose  authorized  agent,  with  full 
knowledge  of  the  facts,  issues  a  policy  which,  on  account  of 
the  existence  of  such  facts  would  be  void  in  its  incipiency,  and 
receives  premiums  therefor,  cannot,  in  the  event  of  a  loss,  set 
up  such  facts  to  defeat  a  recovery  on  the  policy. ^^ 

Same  —  During  the  Running  of  the  Risk. 

Any  known  breach  of  the  condition  of  the  jwlicy,  or  cause 
•of  forfeiture,  is  waived  by  a  recognition  of  the  validity  of 
the  policy  thereafter. ^^ 

Same— After  the  Loss. 

If,  after  a  loss  has  occurred,  and  the  fact  becomes  known 
to  the  insurer  that  a  defense  to  the  policy  exists,  or  that  a  for- 
feiture has  been  incurred,  the  insurer  takes  affirmative  action 
amounting  to  a  confession  of  its  liability,  which  induces  the 
insured  to  believe  that  the  loss  will  be  paid,  and  to  do  acts 

"McElroy  v.  British  America  Assur.  Co.  (C.  C.  A.),  94  Fed.  990 
(existing  insurance);  Germania  Fire  Ins.  Co.  v.  Klewer,  129  111.  599, 
22  N.  E.  489  (vacancy) ;  Hobkirk  v.  Phoenix  Ins.  Co.,  102  Wis.  13,  78 
N.  W.  161  (existence  of  chattel  mortgage);  Miller  v.  Hartford  Fire 
Ins.  Co.,  70  Iowa,  704  (other  insurance) ;  Breckinridge  v.  American 
Cent.  Ins.  Co.,  87  Mo.  62;  Phenix  Ins.  Co.  v.  La  Pointe,  118  111.  384 
(incumbrances);  Rife  v.  Lebanon  Mut.  Ins.  Co.,  115  Pa.  St.  530  (in- 
creased risk) ;  Liverpool  &  L.  &  G.  Ins.  Co.  v.  Ende,  65  Tex.  118 
(condition  of  title);  Michigan  Shingle  Co.  v.  State  Inv.  &  Ins.  Co., 
94  Mich.  389,  53  N.  W.  945  (waiver  of  clear  space  clause).  See,  also, 
ante,  c.  8,  "Agents." 

=°  Webster  v.  Phoenix  Ins.  Co.,  36  Wis.  67;  Powell  v.  Factors'  & 
Traders"  Ins.  Co.,  28  La.  Ann.  19;  Seibel  v.  Northwestern  Mut.  Relief 
Ass'n,  94  Wis.  253,  68  N.  W.  1009;  Williams  v.  Niagara  Fire  Ins.  Co., 
50  Iowa,  561;  Insurance  Co.  of  North  America  v.  Garland,  108  111. 
220;  Mitchell  v.  Lycoming  Mut.  Ins.  Co.,  51  Pa.  St.  402;  Landers  v. 
Watertown  Fire  Ins.  Co.,  86  N.  Y.  414;  Carpenter  v.  Providence 
Wash.  Ins.  Co.,  16  Pet.  (U.  S.)  495. 


§§  235-238  WAIVER  and  estoppel.  715- 

based  on  sucli  belief  whieb  are  attended  witb  some  trouble  or 
expense,  sucb  conduct  will  amount  to  a  waiver.  Tbe  rule  is 
tbat  wlien  an  insurance  company  becomes  aware  tbat  all  rigbts 
under  a  policy  bave  been  lost,  it  cannot,  for  an  indefinite 
period,  disguise  its  purpose  to  resist  payment  of  tbe  loss  by 
affirmative  action  wbicb  would  lead  tbe  insured  to  believe  tbat 
it  admits  its  liability,  and  intends  to  discbarge  it.-*'  Tbus 
an  adjustment  of  a  loss,  witb  full  knowledge  by  tbe  insurer, 
of  tbe  violations  of  a  condition  of  tbe  policy,  and  witbout 
notifying  tbe  insured  of  an  intention  to  insist  upon  tbe  for- 
feiture, is  a  waiver  of  its  rigbts  to  assert  tbe  forfeiture  \'^'^  and 
tbe  collection  of  a  premium  for  tbe  insurance  covering  tbe 
loss  ;^^  and  tbe  requirement  of  original  proofs  of  loss,  or  tbe 
amendment  of  defective  proofs  p^  and  a  demand  for  arbitra- 
tion.3» 

An  insurer  cannot  take  advantage  of  a  neglect  to  bring  a 
suit  witliin  tbe  time  limited  by  tbe  policy,  wbcre  it  bas  con- 
tributed to  tbe  delay  by  bolding  out  bopes  of  an  amicable  ad- 
justment.^^    But   mere   negotiations   for   settlement   do   not 

==  Knickerbocker  Life  Ins.  Co.  v.  Norton,  96  U.  S.  234;  Equitable 
Life  Assur.  Soc.  v.  Hiett's  Adm'r,  19  U.  S.  App.  173,  185,  7  C.  C.  A. 
3{)9,  58  Fed.  541;  Roby  v.  American  Cent.  Ins.  Co.,  120  N.  Y.  510,  24 
N.  E.  808;  Hollis  v.  State  Ins.  Co.,  65  Iowa,  454,  21  N.  W.  774. 

=' Cleaver  v.  Traders'  Ins.  Co.,  71  Mich.  414,  15  Am.  St.  Rep.  275; 
Godchaux  v.  Merchants'  Mut.  Ins.  Co.,  34  La.  Ann.  235;  Levy  v.  Pea- 
body  Ins.  Co.,  10  W.  Va.  560;  Fishbeck  v.  Phenix  Ins.  Co.,  54  C'al.  422. 

"  Phenix  Ins.  Co.  v.  Tomlinson,  125  Ind.  84,  21  Am.  St.  Rep.  203. 
See,  also,  Schreiber  v.  German-American  Hail  Ins.  Co.,  43  Minn.  367: 
Smith  V.  Continental  Ins.  Co.,  6  Dak.  433,  43  N.  W.  810. 

=»Hanscom  v.  Home  Ins.  Co.,  90  Me.  333;  Jerdee  v.  Cottage  Grove 
Fire  Ins.  Co.,  75  Wis.  345,  44  N.  W.  636.  Any  objection  to  the  suffi- 
ciency of  the  proofs  of  loss  is  waived  by  denial  of  liability  on  the 
ground  that  the  policy  was  not  issued.  Campbell  v.  American  Fire 
Ins.  Co.,  73  Wis.  100,  40  N.  W\  661. 

="'  See  ante,  c.  15,  "Arbitration  and  Award." 

'^  Allemania  Ins.  Co.  v.  Peck,  133  111.  220;  Thompson  v.  Phenix  Ins, 
Co.,  136  U.  S.  287. 


716  WAIVER   AND    ESTOPPEL.  §§  235-238 

waive  the  conditioai  requiring  suit  to  be  brought  within  a 
:specified  tirae;^^  and  it  has  been  held  that  an  insurer,  by 
putting  its  refusal  to  pay  a  loss  upon  a  specified  ground,  and 
prior  to  the  commencement  of  an  action,  cannot,  after  suit 
brought,  defend  on  any  other  grounds.^^  But  this  holding 
•can  hardly  be  said  to  be  supported  by  reason  or  logic. 

No  Waiver. 

In  answer  to  a  suit  brought  on  a  policy,  an  insurer  is  en- 
titled to  assert  all  possible  defenses  which  are  not  inconsistent 
with  each  other.^''  An  estoppel  cannot  be  based  upon  intima- 
tions of  legal  conclusions  f^  nor  upon  acts  performed  after  the 
time  when  the  other  party  claims  to  have  been  misled  by 
tliem.^*'  There  can  be  no  estoppel  against  pleading  the  ille- 
gality of  a  policy.^^  A  party  is  not  compelled  to  assert,  upon 
the  first  trial  of  an  action,  all  issues  available  upon  the 
Tecord.^^     A  waiver  of  a  violation  of  one  condition  of  a 

»==  Allemania  Ins.  Co.  v.  Little,  20  111.  App.  431. 

^' Castner  v.  Farmers'  Mut.  Fire  Ins.  Co.,  50  Mich.  273;  Douville  v. 
Farmers'  Mut.  Fire  Ins.  Co.,  113  Mich.  158,  71  N.  W.  517.  But  see 
contra,  Hubbard  v.  Mutual  Reserve  Fund  Life  Ass'n,  80  Fed.  681. 
See,  also,  on  waiver  of  forfeiture  after  loss,  Titus  v.  Glens  Falls  Ins. 
Co.,  81  N.  Y.  419;  Prentice  v.  Knickerbocker  Life  Ins.  Co.,  77  N.  Y. 
483;  McGurk  v.  Metropolitan  Life  Ins.  Co.,  56  Conn.  528,  1  L.  R.  A. 
563;  Kiernan  v.  Dutchess  County  Mut.  Ins.  Co.,  150  N.  Y.  190,  44 
N.  E.  698;  Dohlantry  v.  Blue  Mounds  F.  &  I>.  Ins.  Co.,  83  Wis.  181,  53 
N.  W.  448;  New  York  Life  Ins.  Co.  v.  Baker,  49  U.  S.  App.  690,  83 
Ted.  647*. 

^^Kahnweiler  v.  Phcenix  Ins.  Co.,  57  Fed.  562;  La  Plant  v.  Fire- 
men's Ins.  Co.,  68  Minn.  82.  See,  also,  ante  c.  13,  "Notice  and  Proofs 
•of  Loss,"  notes  124--147,  154--157. 

^^  Packard  v.  Connecticut  Mut.  Life  Ins.  Co.,  9  Mo.  App.  469. 

="  Behrens  v.  Germania  Fire  Ins.  Co.,  64  Iowa,  19. 

"  Spare  v.  Home  Mut.  Ins.  Co.,  8  Sawy.  (U.  S.)  618,  15  Fed,  707. 

^Moulor  V.  American  Life  Ins.  Co.,  Ill  U.  S.  335. 


§§  235-238  WAIVER  and  estoppel.  71T 

policy  is  not  a  waiver  of  any  other  condition. ^^  An  examina- 
tion of  the  insured  under  oath,  or  an  appraisement,  does  not 
prevent  the  insurer  from  thereafter  claiming  a  forfeiture, 
where  the  contract  provides  that  such  acts  shall  not  constitute 
a  waiver. ^°  A  waiver  and  estoppel  must  be  predicated  upon 
acts  of  the  insurer  which  have  misled  the  insured  to  his. 
prejudice.^ ^  A  waiver  cannot  be  predicated  upon  mere  si- 
lence and  inaction  of  an  insurer  after  the  loss  ;^^  nor  at  any 
time  unless  silence  would  be  misleading  and  deceptive.^^ 
Where  a  policy  provides  that  no  action  for  recovery  thereon 
can  be  maintained  unless  commenced  within  a  specified  time 
after  the  fire,  and  that  no  provision  or  condition,  or  any  for- 
feiture, shall  be  waived  by  any  act  or  proceeding  relating  ta 
the  appraisal,  the  adjustment  of  a  loss  does  not  excuse  a  fail- 
ure to  bring  a  suit  within  the  required  time.^^  Submission 
to  arbitration  is  not,  of  itself,  a  waiver  by  the  insurer  of  an 
election  to  rebuild,  nor  does  it  exclude  the  possibility  of  a 
previous  waiver,  nor  does  it  affect  the  status  of  the  parties  in 
any  other  particular,  where  the  policy  expressly  provides  that 
the  appraisement  is  without  reference  to  any  other  question. ^^ 
The  mere  offer  of  an  insurer  to  pay  an  amount  less  than  that 

^'''Trott  V.  Woolwich  Mut.  Fire  Ins.  Co.,  83  Me.  362;  St.  Onge  v. 
AVestchester  Fire  Ins.  Co.,  80  Fed.  703. 

«City  Drug  Store  v.  Scottish  U.  &  N.  Ins.  Co.  (Tex.  Civ.  App.),  44 
S.  W.  21. 

^'Ante,  notes  1  to  9;  Georgia  Home  Ins.  Co.  v.  Rosenfield  (C.  C. 
A.),  95  Fed.  358;  Alabama  State  Mut.  Assur.  Co.  v.  Long  Clothing  & 
Shoe  Co.  (Ala.),  26  So.  655;  Globe  Mut.  Life  Ins.  Co.  v.  Wolff,  95 
U.  S.  326;  McCormick  v.  Springfield  F.  &  M.  Ins.  Co.,  66  Cal.  361. 

«  Gibson  Electric  Co.  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  159  N.  Y.  418, 
54  N.  E.  23. 

"Ante,  notes  1  to  9;  East  Texas  Fire  Ins.  Co.  v.  Ferkey,  89  Tex. 
604,  35  S.  W.  1050. 

"Willoughby  v.  St.  Paul  German  Ins.  Co.,  68  Minn.  373. 

*"•  Piatt  V.  Aetna  Ins.  Co.,  153  111.  113,  26  L.  R.  A.  853. 


V18  WAIVER   AND    ESTOPPEL.  §§  235-238 

claimed  by  tlie  insured,  by  way  of  compromise  and  settlement 
of  a  loss,  will  not  alone  constitute  a  waiver  of  its  rights  to  as- 
sert forfeitures  of  the  policy,  or  a  failure  to  comply  with  its 
conditions,  when  there  is  no  statement  or  admission  of  fact, 
in  recognition  of  the  validity  of  the  policy,  which  can  be  di- 
vorced from  the  offer  of  settlement,  and  the  insured  is  not  in 
any  way  prejudiced  thereby.  A  man  may,  without  prejudice 
to  his  rights,  offer  to  buy  his  peace.^^ 

« Richards  v.  Continental  Ins.  Co.,  83  Mich.  508,  21  Am.  St.  Rep. 
611;  Houdeck  v.  Merchants'  &  B.  Ins.  Co.,  102  Iowa,  303,  71  N.  W. 
354;  Hubbard  v.  Mutual  Reserve  Fund  Life  Ass'n,  80  Fed.  681: 
Cook  V.  Continental  Ins.  Co.,  70  Mo.  610;  Eastern  R.  Co.  v.  Relief 
Fire  Ins.  Co.,  105  Mass.  579;  Roberts  v.  Northwestern  Nat.  Ins.  Co., 
90  Wis.  210,  62  N.  W.  1048;  Lake  v.  Farmers'  Ins.  Co.,  110  Iowa,  473, 
81  N.  W.  711.  See,  ante,  c.  14,  notes  158-168,  "Waiver  of  Notice  and 
Proofs  of  Loss." 


CHAPTER  XIX. 

REINSURANCE. 

S  239.  Definition  and  Nature. 

240.  Who  may  Sue. 

241.  Right  to  Reinsure. 

242.  Insurable  Interest. 

243.  Form  and  Essentials  of  Contract. 

244.  Agents'  Powers. 
245-248.  The  Contract. 

249-251.  Amalgamation  or  Consolidation  of  Companies. 


Definition  and  Nature. 

§  239.  A  simple  contract  of  reinsurance  is  an  agreement 
whereby  an  insurer  is  promised  indemnity  to  a  specified 
amount  against  a  risk  assumed  by  him  under  a  contract  of  in- 
surance in  favor  of  a  third  party. 

The  party  indemnified  is  called  the  reinsured:  the  one  in- 
demnifying is  called  the  reinsurer. 

A  contract  of  reinsurance  has  the  qualities  and  incidents  of 
a  contract  of  simple  insurance. 

Contracts  of  reinsurance,  by  which  one  insurer  causes  the 
sum  which  he  has  insured  to  be  reassured  to  him  by  a  distinct 
contract  with  another  insurer  with  the  object  on  the  part  of 
the  first  named  of  indemnifying  himself  against  his  ovni  re- 
sponsibility (though  prohibited  for  a  time  in  England  by 
statute),  were  vahd  by  the  common  law,  and  have  always  been 
lawful  in  this  country.  Mr.  Kent  thus  states  the  law :  "After 
an  insurance  has  been  made  the  insurer  may  have  the  entire 
sum  he  hath  insured,  reassured  to  him  by  some  other  insurer. 
The  object  of  this  is  indemnity  against  his  own  act  j  and,  if  he 


720  KEINSUKANCE.  §  23& 

gives  a  less  premium  for  the  reassurance,  all  his  gain  is  the 
difference  between  what  he  receives  as  a  premium  for  the  orig- 
inal insurance  and  what  he  gives  for  the  indemnity  against 
his  own  policy.  *  *  *  These  reassurances  are  prohib- 
ited in  England  except  in  special  cases.  *  *  *  The  con- 
tract of  reassurance  is  totally  distinct  from  and  unconnected 
with  the  primitive  insurance,  and  tJie  reassured  is  obliged  to 
prove  the  loading  and  value  of  the  goods,  and  the  existence 
and  extent  of  the  loss,  in  the  same  manner  as  if  he  were  the 
original  insured.  *  *  *  If  he  proves  the  original  claim 
against  him  to  bo  valid  when  he  resorts  over  to  the  reinsurer, 
he  makes  out  a  case  for  indemnity." 

Thus  it  will  be  seen  that  a  contract  of  reinsurance  is  but 
a  modification  of  the  ordinary  contract  of  insurance.  The 
reinsurer  assumes  altogether,  or  in  part,  the  risk  of  the  orig- 
inal insurer.  The  thing  insured  is  the  same  as  in  the  original 
contract;  but  the  subject  of  indemnity  is  the  risk  assumed  by 
the  first  insurer.  It  is  very  similar  to  the  common  case  of 
simple  insurance  in  favor  of  a  mortgagee  who  becomes  in- 
sured against  loss  of  the  property  mortgaged,  which  in  such 
case  is  the  subject  of  the  risk;  while  the  subject  of  indemnity 
is  the  mortgage  debt.  The  purpose  and  effect  of  reinsurance 
is  to  throw  the  risk  of  the  primitive  insurer,  who  is  in  this 
connection  called  the  reinsured,  upon  another  insurer,  Avho  is 
called  the  reinsurer.  Indemnity  to  the  reinsured  is  the  un- 
derlying principle.  To  indemnify  means  to  secure  and  pro- 
tect from,  or  to  compensate  for,  damage  or  liability  that  may 
happen  from  a  given  act  or  event.  If  the  reinsured  is  not 
liable  upon  his  own  contract  of  insurance  he  cannot  recover 
against  the  reinsurer.  But  the  proof  of  liahilify  is  sufficient. 
It  is  not  necessary  that  the  reinsured  pay  the  loss  or  discharge 
his  liability  before  proceeding  against  the  reinsurer.^ 

>3  Kent,  Comm.  §  279;  Eagle  Ins.  Co.  v.  Lafayette  Ins.  Co.,  9  Ind. 


§  240  WHO   MAY    SUE.  721 

Who  Mat  Sue. 

§  240.  Beinsurance  frequently  inures  to  the  benefit  of  the 
original  insured. 

A  simple  contract  of  reinsurance  is  a  contract  of  indemnity 
"whereby  the  insurer  reinsures  one  or  more  of  its  risks  in  an- 
other company,  and  is  solely  for  the  benefit  of  the  primitive 
insurer.  In  such  a  contract  its  policy-holders  have  no  con- 
cern, are  not  the  parties  for  whose  benefit  the  contract  of 
reinsurance  is  made,  and  they  cannot,  therefore,  sue  thereon.^ 
But  the  contract  frequently  goes  further  than  this  and  looks, 
toward  the  protection  of  the  original  insured  and  embraces 
also  an  express  agreement  of  the  reinsurer  to  assume  and  pay 
the  losses  of  the  policy-holder;  and  it  is  therefore  an  agree- 
ment upon  which  the  latter  is  entitled  to  maintain  an  action 
directly  against  the  reinsurer.  Whether  the  original  policy- 
holders have  any  right  of  action  against  the  reinsurer  de- 
pends upon  whether  the  contract  of  reinsurance  provides  for 
indemnity  to  them  or  merely  to  the  first  insurer,  e.  g.  where 
one  insurance  company  sold  to  another  its  entire  business, 
good  will  and  property  in  consideration  whereof  the  latter 

443;  Home  v.  Mutual  Safety  Ins.  Co.,  1  Sandf.  (N.  Y.)  137,  2  Bennett, 
Fire  Ins.  Cas.  580;  Merchants'  Mut.  Ins.  Co.  v.  New  Orleans  Mut.  Ins. 
Co.,  24  La.  Ann.  305;  Barnes  v.  Hekla  Fire  Ins.  Co.,  56  Minn.  38; 
Fame  Ins.  Co.'s  Appeal,  83  Pa.  St.  396;  New  York  Bowery  Fire  Ins. 
Co.  V.  New  York  Fire  Ins.  Co.,  17  Wend.  (N.  Y.)  359;  Bartlett  v.  Fire- 
man's Fund  Ins.  Co.,  77  Iowa,  158.  41  N.  W.  601;  Faneuil  Hall  Ins. 
Co.  V.  Liverpool  &  L.  &  G.  Ins.  Co.,  153  Mass.  67,  10  L.  R.  A.  423; 
Phoenix  Ins.  Co.  v.  Erie  &  W.  Transportation  Co.,  117  U.  S.  312; 
Smith  V.  St.  Louis  Mut.  Life  Ins.  Co.,  2  Tenn.  Ch.  727;  Philadelphia 
Ins.  Co.  V.  Washington  Ins.  Co.,  23  Pa.  St.  250. 

="  Cases  in  note  1,  ante;  Price  v.  St.  Louis  Mut.  Life  Ins.  Co.,  3  Mo. 
App.  262;  Herckenrath  v.  American  Mut.  Ins.  Co.,  3  Barb.  Ch. 
(N.  Y.)  63;  Strong  v.  Phoenix  Ins.  Co.,  62  Mo.  289;  Delaware  Ins.  Co. 
V.  Quaker  City  Ins.  Co.,  3  Grant  Cas.  (Pa.)  71.  See  post,  notes  6,  7 
and  8. 

KERR,  INS.— 46 


722  KEINSUEANCE.  §  240 

"reinsured  the  risks  of  the  former  and  a2:reed  that  all  losses 
arising  under  the  policies  of  the  original  insurer  shall  he 
home,  paid  and  satisfied  hy  the  insurer,"  the  original  insured 
is  entitled  to  maintain  an  action  against  the  reinsurer  for  a 
loss  covered  by  his  policy.^ 

And  a  contract  whereby  one  insurer  reinsures  another  on 
all  risks  of  the  latter  for  which  it  has  policies  outstanding 
and  "agrees  to  assure  such  policies  and  to  pay  to  the  policy- 
holders all  such  sums  as  the  'reinsured'  may  by  force  of  such 
policies  become  liable  to  pay,"  is  for  the  benefit  of  the  policy 
holders.  It  may  be  enforced  by  them  without  getting  judg- 
ment against  the  first  insurer,  and  includes  liability  of  the 
first  insurer  for  damages  for  failure  to  continue  its  contract."* 
In  such  case  a  poliej^-holder  may  sue  either  company.  The 
remedies  are  not  inconsistent  and  he  is  not  put  to  an  election. 
He  may  have  an  action  against  each,  though  he  can  have  but 
one  satisfaction.^  An  agreement  by  one  insurance  company 
with  the  agent  of  another  company  to  take  a  risk  and  issue  a 
policy  to  certain  policy-holders  in  lieu  of  one  which  the  latter 
company  has  ordered  cancelled,  is  not  a  reinsurance  of  such 
company  cancelling  its  own  risk,  so  as  to  enable  it  to  sue  in  its 
OA\Ti  name  for  payment  of  a  loss  occurring  before  the  first 
policy  was  cancelled  and  the  latter  delivered.  But  property 
o^vners  can  maintain  an  action  on  such  an  agreement."  And 
upon  the  principle  that  a  creditor,  for  the  purpose  of  satisfying 
his  debt,  may,  in  equity,  avail  himself  of  any  subsisting  pro- 
vision made  by  his  insolvent  debtor  for  its  payment,  a  rein- 
.surer  may  be  compelled  to  pay  the  amount  of  the  loss  for 

"Johannes  v.  Phenix  Ins.  Co.,  66  Wis.  56,  27  N.  W.  414. 
♦Fischer  v.  Hope  Mut.  Life  Ins.  Co.,  69  N.  Y.  161;   Glen  v.  Hope 
Mut.  Life  Ins.  Co.,  56  N.  Y.  379,  4  Bigelow,  Life  &  Ace.  Ins.  Cas.  339. 
\Barnes  v.  Hekla  Fire  Ins.  Co.  56  Minn.  38. 
"Merchants'  Ins.  Co.  v.  Union  Ins.  Co.,  162  111.  173. 


§  241  lUGHT    TO    REINSURE.  723 

wliich  it  is  liable  directly  to  the  insured  or  the  party  ulti- 
'mately  entitled  to  the  money,  when  the  prior  insurer  whom  it 
has  indemnified  has  become  insolvent.''^ 

But  where  by  the  terms  of  the  contract  in  controversy,  the 
defendants  "reinsure  the  American  Insurance  Co.,  upon  the 
following  policies  issued  by  them"  (describing  them),  "loss, 
if  any,  payable  to  the  assured  upon  the  same  terms  and  condi- 
tions as  contained  in  the  original  policies,"  it  was  held  that 
the  word  "assured"  meant  the  party  reinsured,  and  not  a 
property  o'\\Tier  to  whom  a  policy  had  been  issued ;  that  the 
latter  could  not  maintain  an  action  upon  the  contract ;  and  that 
oral  evidence  was  inadmissible  to  show  the  meaning  attached 
to  that  word  by  the  parties  at  the  time  of  making  the  con- 
tract.^ 

When  the  reinsurance  is  available  to  the  insured,  he  may 
take  advantage  of  it  or  not  at  his  option.  He  may  sue  either 
the  insurer  or  the  reinsurer  or  both ;  but  can  collect  only  from 
one.^^ 

Right  to  Reinsure, 

§  241.  In  the  absence  of  any  statutory  prohibition  and  of 
any  specific  stipulation  in  the  policy  to  the  contrary,  there  can 
be  no  doubt  of  the  right  of  an  insurer  to  effect  reinsurance. 

Under  the  general  powers  conferred  upon  an  insurance 
company  to  make  contracts  of  insurance,  it  is  authorized,  (a) 
to  seek  indemnity  by  reinsuring  its  risks  either  in  whole  or  in 
part,  or  (b)  to  give  the  same  protection  and  indemnity  to  an- 
other insurer  by  assuming  the  risks  of  the  latter.^     An  iiisur- 

'Hunt  V.  New  Hampshire  F.  U.  Ass'n,  68  N.  H.  305,  38  Atl.  145,  38 
L.  R.  A.  514.    See  ante,  notes  1,  2. 

*  Carrington  v.  Commercial  F.  &  M.  Ins.  Co.,  1  Bosw.  (N.  Y.)  152. 
And  see  Jackson  v.  St.  Paul  F.  &  M.  Ins.  Co.,  99  N.  Y.  124. 

*  Barnes  v.  Hekla  Fire  Ins.  Co.,  56  Minn.  41. 

"Cases  ante;  Sun  Ins.  Office  v.  Merz.  63  N.  J.  Law,  365,  43  Atl.  693; 
Insurance  Co.  of  North  America  v.  Hibernia  Ins.  Co.,  140  tf.  S.  565; 


724  EEINSD RANGE.  §  241 

ance  company  autliorized  to  do  "business  npon  either  tlie  stock 
or  mutual  plan  may  reinsure  its  risks,  and  may  transfer  its 
property  including  premium  notes  as  a  consideration  therefor,, 
at  least  where  the  new  contract  inures  to  the  benefit  of  the 
policy-holders ;  and  a  failure  of  the  original  company  to  com- 
ply with  the  law  forbidding  it  to  do  business  without  having 
a  given  number  of  members,  or  a  given  amount  of  assets  and 
premium  notes,  does  not  prevent  it  from  indemnifying  itself 
against  loss  on  risks  already  assumed.  ^^ 

In  Ohio  the  right  of  a  mutual  company  to  reinsure  the 
risks  of  a  similar  company  is  denied. ^^  In  Iowa  a  contrary 
rule  obtains  with  this  limitation,  viz. :  that  the  reinsurer 
cannot  divert  the  mortuaiy  or  trust  funds  collected  from  its 
o\^ai  members  to  any  other  purposes  than  those  specified  in  its 
articles  of  incorporation  or  by-laws,  and  that  therefore  an 
undertaking  to  pay  all  the  liabilities  of  the  reinsured  for  ac- 
crued death  losses  from  such  funds  is  ultra  vires  and  void.^^ 

A  fire  insurance  company  w^hich  has  authority  to  take  risks 
on  all  kinds  of  property,  may  contract  to  reinsure  the  risks  of 
another  company  notwithstanding  the  grant  of  a  special  power 
to  "reinsure  themselves. "^^ 


New  York  Bowery  Fire  ms.  Co.  v.  New  York  Fire  Ins.  Co.,  17  Wend. 
(N.  Y.)  359;  Chalaron  v.  Insurance  Co.  of  North  America,  48  La. 
Ann.  1582,  36  L.  R.  A.  742. 

"Davenport  Fire  Ins.  Co.  v.  Moore,  50  Iowa,  626;  Brum  v.  Mer- 
chants' Mut.  Ins.  Co.,  4  Woods  (U.  S.),  156,  16  Fed.  140;  post,  note  21; 
Temperance  Mut.  Ben.  Ass'n  v.  Home  Friendly  Soc,  187  Pa.  St.  38, 

"  State  V.  Monitor  Fire  Ass'n,  42  Ohio  St.  555.  See,  also.  People 
v.  Empire  Mut.  Life  Ins.  Co.,  92  N.  Y,  105. 

"  Twiss  V.  Guaranty  Life  Ass'n,  87  Iowa,  733,  55  N.  W.  8,  43  Am. 
St.  Rep.  418;  Cathcart  v.  Equitable  Mut.  Life  Ass'n,  111  Iowa,  471, 
82  N.  W.  964;  Davenport  Fire  Ins.  Co.  v.  Moore,  50  Iowa,  626;  Bent 
V.  Hart,  73  Mo.  641;  Alexander  v.  Williams,  14  Mo.  App.  13. 

"  Fame  Ins.  Co.'s  Appeal,  83  Pa.  St.  396.  Compare  Cannon  v.  Home 
Ins.  Co.,  53  Wis.  585;  Alexander  v.  Williams,  14  Mo.  App.  13;  Mason 


§§  242,  243      fokm  and  essentials  of  contract.  725 

Insurable  Interest. 

242.  The  one  procuring  reinsurance  must  have  an  insurable 
interest  in  the  risk  reinsured. 

It  is  well  settled  that  an  insurer  of  property  or  lives  acquires 
by  his  contract  of  insurance  an  insurable  interest  in  the  prop- 
erty or  life  insured ;  and  this  interest  he  may  protect  by  rein- 
suring either  the  whole  or  part  of  the  risk.  But  a  contract  of 
reinsurance  which  by  its  terms  makes  the  reinsurer  liable 
for  losses  on  property  or  lives  in  which  at  the  date  of  rein- 
suring the  reinsured  had  no  insurable  interest,  is  invalid.  As 
regards  the  necessity  for  the  existence  of  an  insurable  interest 
in  the  insured,  the  contract  of  reinsurance  has  all  the  qualities 
and  incidents  of  a  contract  of  simple  insurance.^* 

Form  and  Essentials  of  Contract. 

§  243.  The  contract  of  reinsurance 

(a)  Is  not  within  the  Statute  of  Frauds,  i.  e.  it  may  be 

established  by  parol; 
'b)  Must  contain  all  the  elements  of  a  contract  of 
simple  insurance. 

(a)  An  agreement  to  reinsure  is  not  an  undertaking  to 
answer  for  the  debt  or  default  of  the  first  insurer;  but  is  an 
original  undertaking  entered  into  -with,  him  to  indemnify 
either  him,  or  the  o^\iier  of  the  insured  property,  or  the  payee 
or  beneficiary  under  the  first  policy,  to  the  specified  amiount, 
in  case  a  loss  or  death  occurs,  or  the  event  insured  against 
happens.  It  is  in  no  sense  a  contract  of  giiaranty  or  surety- 
ship ;  but  under  it  the  reinsurer,  as  between  the  immediate 

V.  Cronk,  125  N.  Y.  496;  Casserly  v.  Manners,  48  How.  Pr.   (N.  Y.) 
219.    See  post,  notes  19-22,  66-76. 

"  Manufacturers'  F.  &  M.  Ins.  Co.  v.  Western  Assur.  Co.,  145  Mass. 
419;  Phoenix  Ins.  Co.  v.  Erie  &  W.  Transportation  Co.,  117  U.  S.  312; 
Sun  Ins.  Office  v.  Merz,  03  N.  J.  Law,  365,  43  Atl.  693;  Chalaron  v. 
Insurance  Co.  of  North  America,  48  La.  Ann.  1582,  36  L.  R.  A.  742. 


i26 


KEINSUKANCE. 


§24i 


parties,  assumes  the  risk  absolutely.  He  takes  the  place  of 
the  first  insurer,  assuming  all  or  part  of  the  liability ;  and  is 
bound  in  any  event  to  answer  either  to  him,  or  to  the  payee  in 
the  original  policy,  when  the  liability  matures.  The  statute 
of  frauds  has  no  application  to  a  contract  of  that  nature.  ^^ 

(b)  The  contract  must  be  complete,  definite,  and  certain  in 
all  its  terms,  i.  e.  as  to  parties,  the  risk  insured  against,  the 
commencement,  duration,  and  extent  of  liability,  and  the  con- 
sideration.^^ 

Agent's  Power. 

§  244.  It  is  incumlDent  upon  the  party  alleging  the  existence 
of  a  contract  of  reinsurance  to  produce  competent  and  suflB- 
cient  evidence  of  the  authority  of  the  agent  executing  the  con- 
tract to  bind  the  reinsurer  in  the  premises. 

Neither  the  procuring  of  a  contract  of  reinsurance  in  favor 
of  his  company,  nor  the  issuing  of  such  a  contract  in  favor  of 
another  insurer,  can  be  said  to  be  within  the  scope  of  the 
authority  of  an  ordinary  insurance  agent.  The  principal  will 
be  bound  only  when  either  actual  or  apparent  power  to  bind  it 
by  effecting  reinsurance  is  shown  to  exist  in  the  one  exercising 
such  power,  except  in  cases  where  an  unauthorized  act  is 
adopted  or  ratified  by  the  principal  himself. ^^  A  general 
power  given  to  an  agent  to  reinsure  risks  taken  by  another 
association  does  not  authorize  him,  in  the  absence  of  any  act 


"Bartlett  v.  Fireman's  Fund  Ins.  Co.,  77  Iowa,  155,  41  N.  W.  601; 
Commercial  Mut.  Marine  Ins.  Co.  v.  Union  Mut.  Ins.  Co.,  19  How. 
(U.  S.)   318. 

"Ante,  c.  5;  post,  notes  17-20;  Home  Marine  Ins.  Co.  v.  Smith 
(1898),  2  Q.  B.  351,  67  Law  J.  Q.  B.  777;  Union  Ins.  Co.  v.  American 
Fire  Ins.  Co.,  107  Cal.  327,  28  L.  R.  A.  692;  Commercial  Mut.  Marine 
Ins.  Co.  V.  Union  Mut.  Ins.  Co..  19  How.   (U.  S.)  318. 

"Ante,  c.  4;  Commercial  Mut.  Marine  Ins.  Co.  v.  Union  Mut.  Ins. 
Co.,  19  How.  (U.  S.)  318;  Phoenix  Ins.  Co.  v.  Anchor  Ins.  Co.,  4  Ont. 
524. 


g  24i  agent's  POWER.  727 

of  acquiescence  or  ratification  by  liis  company,  to  reinsure 
himself  of  otliers  for  whom  he  is  acting  as  agent.  One  who 
is  the  agent  of  two  companies,  having  placed  a  risk  in  one, 
cannot  reinsure  it  in  the  other.  ^^  The  reason  for  this  is  that 
the  same  person  cannot,  without  the  consent  of  his  principals, 
act  as  agents  of  both  in  their  mutual  transactions  where  the 
interests  of  the  different  principals  would  be  opposed.  Yet. a 
transaction  is  not  necessarily  void  merely  because  it  is  had 
or  made  between  two  corporations  which  have  the  same  execu- 
tive officers,  provided  the  corporations  have  the  right  within 
the  scope  of  their  corporate  powers  to  deal  with  each  other  in 
that  particular.  The  power  of  each  to  contract  with  the 
other  is  not  lost  or  destroyed  by  the  fact  that  some  or  all  of 
the  directors  of  each  are  common  to  both.  But  the  directors 
in  sucli  case  must  act  in  good  faith  and  with  fidelity  to  the 
interests  of  both  corporations ;  and  a  showing  of  actual  fraud 
or  of  any  appreciable  advantage  received  by  either  corporation 
to  the  disadvantage  of  the  other,  will  be  sufficient  to  justify  the 
courts  in  refusing  their  sanction. ^^  Thus  the  reinsurance  of 
the  policies  and  the  transfer  of  the  whole  reserve  of  a  solvent 
life  insurance  company  to  an  insolvent  company,  without  se- 
curity, by  directors  who  have  bought  the  stock  of  the  former 
is  a  fraud  on  the  policy-holders  and  consequently  void. 2*^  A 
provision  in  a  charter  that  "this  company  shall  have  power  to 
make  reinsurance  upon  any  or  all  risks  taken  by  them"  does 
not  give  the  directors  power  to  close  out  the  business  of  the 
company;  but  when  the  best  interests  of  the  company  demand 

"Timberlake  v.  Beardsley,  22  App.  Div.  (N.  Y.)  439;  Mercantile 
Mut.  Ins.  Co.  V.  Hope  Ins.  Co.,  8  Mo.  App.  408. 

''Alexander  v.  Williams,  14  Mo.  App.  13;  Leavenworth  County 
Com'rs  V.  Chicago,  R.  I.  &  P.  Ry.  Co.,  134  U.  S.  688;  San  Diego,  O.  T. 
&  P.  B.  R.  Co.  V.  Pacific  Beach  Co.,  112  Cal.  53,  33  L.  R.  A.  788. 

='•  Mason  v.  Cronk,  125  N.  Y.  500;  Casserly  v.  Manners,  48  How.  Pr. 
(N.  Y.)  219. 


T2y  KEINSUKANCE.  §§  245-247 

it,  it  is  Avithin  their  power  and  it  is  their  duty  to  reinsure ;  and 
they  can  do  this  in  contemplation  of  proceedings  for  dissolu- 
tion; and  as  a  consideration  therefor  thej  can  transfer  the 
personal  property  of  the  company,  provided  that  the  reinsur- 
ance be  properly  and  reasonably  effected.^^  Such  an  arrange- 
ment, if  made  injudiciously  or  in  bad  faith,  might  be  of  a 
nature  and  tenor  to  bind  the  contracting  parties,  and  yet  not 
be  effectual  to  place  the  property  transferred  beyond  the  reach 
of  the  creditors  of  the  transferror.^^ 

The  Contkact. 

§  245.  A  contract  of  reinsurance  will  receive  such  a  construc- 
tion as  is  ordinarily  and  naturally  inferable  from  its  terms  and 
conditions. 

The  general  rule  is  that  a  policy  takes  efffect  from  its  date, 
unless  it  be  otherwise  agreed,  or  unless  there  is  evidence  of  a 
contrary  intent. 

The  failure  of  the  reinsured  to  disclose  all  facts  material  to 
the  risk  is  ground  for  rescission. 

The  rights  of  an  original  insured  under  a  contract  of  rein- 
surance executed  for  his  benefit  are  determined  as  in  a  case  of 
simple  insurance. 

§  246.  An  insurer  who  has  reinsured  the  whole  or  part  of 
his  risk  is  entitled  only  to  indemnity  within  the  amount  of  the 
reinsurance.  He  will  not  be  allowed  to  profit  by  the  transac- 
tion. 

§  247.  Judgments  obtained  by  the  original  insured  against 
the  original  insurer  on  account  of  the  risk  reinsured  are  bind- 
ing upon  the  reinsurer  only  when  the  latter  was  given  prompt 
notice  of  the  litigation,  and  had  opportunity  to  assume  the  de- 
fense. 

"  Jameson  v.  Hartford  Fire  Ins.  Co.,  14  App.  Div.  880,  44  N.  Y. 
Supp.  15;  Temperance  Mut.  Ben.  Ass'n  v.  Home  Friendly  Soc,  .187 
Pa.  St.  38;  Davenport  Fire  Ins.  Co.  v.  Moore,  50  Iowa,  619;  McKean 
V.  Bidrlle,  181  Pa.  St.  361;  Insurance  Com'r  v.  Provident  Aid  Soc,  89 
Me.  413,  36  Atl.  627;  post,  note  86. 

"  Bent  V.  Hart,  73  Mo.  641. 


§§  245-248  THE  CONTKAOT.  729 

§  248.  Except  in  cases  of  estoppel 

(a)  By  judgment,  or 

(b)  By  his  having  consented  to  a  settlement  with  the 

original  insured,  a  reinsurer  may,  when  sued, 
avail  himself  of  all  defenses  which  the  original 
insurer  could  have  made  against  its  liability. 

Construction  of  Contract  of  Reinsurance. 

A  court  will  not  enlarge  the  liability  under  a  contract  of  re- 
insurance beyond  the  limits  clearly  and  expressly  fixed  by  the 
policy,  nor  speculate  as  to  the  intention  of  the  parties  in  pro- 
curing the  reinsurance.  It  may  be  for  the  whole  or  part  of 
the  risk  taken  by  the  original  insurer.  In  fire  insurance 
the  general  rule  is  that  the  original  insurer  retains  part  of  the 
risk;  and,  in  event  of  total  loss,  to  the  extent  of  the  amount 
retained,  shares  the  loss  with  the  reinsurers.  Reinsurance 
not  to  take  effect  except  above  a  stated  amount  of  loss,  is  of  a 
■special  character;  and  cannot  be  inferred  from  the  mere 
•statement  of  the  original  insurer  made  w^hile  effecting  the 
contract  that  "we  carry  our  line,"  especially  where  the  policy^ 
is  in  the  ordinary  form  and  covers  loss  to  a  specified 
amount.^^  A  reinsurer  who  assumes  the  "contingent  liabil- 
ity" of  another  insurer  is  not  liable  for  a  loss  which  had  oc- 
curred before  the  assumption.^*  But  a  loss  which  had  al- 
ready happened,  and  of  which  both  parties  were  ignorant,  is 

^  Chalaron  v.  Insurance  Co.  of  North  America,  48  La.  Ann.  1582, 
36  L.  R.  A.  742;  London  Assur.  Corp.  v.  Thompson,  22  App.  Div.  64, 
47  N.  Y.  Supp.  830;  Insurance  Co.  of  State  of  Pennsylvania  v.  Tel- 
fair, 61  N.  Y.  Supp.  322;  Sun  Mut.  Ins.  Co.  v.  Ocean  Ins.  Co.,  107  U.  S. 
485,  1  Sup.  Ct.  583;  Royal  Ins.  Co.  v.  Home  Ins.  Co.  (C.  C.  A.),  68 
Fed.  698;  Philadelphia  Life  Ins.  Co.  v.  American  L.  &  H.  Ins.  Co.,  23 
Pa.  St.  65;  Fame  Ins.  Co.'s  Appeal,  83  Pa.  St.  396;  Com.  Ins.  Co.  v. 
Globe  Mut.  Ins.  Co.,  35  Pa.  St.  475;  London  &  L.  Fire  Ins.  Co.  v. 
Lycoming  Fire  Ins.  Co.,  105  Pa.  St.  424;  St.  Nicholas  Ins.  Co.  v.  Mer- 
•chants'  Mut.  F.  &  M.  Ins.  Co.,  11  Hun  (N.  Y.),  108;  post,  note  38 
£t  seq. 

^*  Olsen  V.  California  Ins.  Co.,  11  Tex.  Civ.  App.  371,  32  S.  W.  446. 


730  EEINSUKANCE.  §§  245-248 

covered  "vvben  the  reinsurance  relates  back  to  the  date  of  the 
primitive  insurance."^  Where  there  are  no  circumstances  in- 
dicating the  intent  of  the  parties^  and  no  time  is  specified  in 
the  contract,  the  risk  will  be  deemed  to  have  commenced  at 
the  date  of  the  contract,  e.  g. — an  agreement  to  issue  a  policy 
of  reinsurance  in  the  usual  form  and  for  the  usual  premium, 
made  after  the  property  v^'as  destroyed,  of  which  fact  both 
parties  were  ignorant,  will  not  become  operative  by  relating 
to  the  beginning  of  the  original- insurance,  but  will  be  deemed 
to  commence  at  the  date  of  the  contract. ^^ 

Where  a  contract  to  reinsure  stipulates  that  the  policy  is  to 
be  subject  to  the  same  conditions  and  provisions  as  are  or 
may  be  adopted  by  the  company  reinsured,  the  company  rein- 
suring binds  itself  by  what  may  be  adopted  by  the  reinsured 
properly  pertaining  to  the  risk.^'^ 

A  clause  in  a  contract  for  reinsurance  that  "this  policy  is 
subject  to  the  same  risks,  conditions,  mode  of  settlement,  and 
in  case  of  loss  payable  at  same  time  and  in  same  manner  as  the 
policies  reinsured,"  does  not  mean  that  the  various  terms  of 
the  reinsured  policies  as  to  risks,  conditions,  mode  of  settle- 
ment, time  and  manner  of  payment  in  ease  of  loss  and  limita- 
tion period,  are  incorporated  with  and  form  a  part  of  the  con- 

-^  Philadelphia  Life  Ins.  Co.  v.  American  L.  &  H.  Ins.  Co.,  23  Pa.  St. 
65.  In  this  case  A.  insured  the  life  of  B.  on  the  24th  of  February, 
1851,  with  the  privilege  of  insurance  for  another  year.  On  the  31st 
of  May,  1851,  the  insurer.  A.,  obtained  a  reinsurance  of  the  said  risk 
from  C.  for  the  term  of  one  year;  but  the  time  when  the  year  was  to 
begin  or  end  was  not  stated.  B.,  the  insured,  had  died  in  a  distant 
state  several  weeks  before  the  second  insurance  was  effected,  but  his 
death  was  unknown  at  the  time  to  both  parties.  Held,  that  the  rein- 
surance must  be  considered  as  taking  effect  on  the  24th  of  February, 
and  not  on  the  31st  of  May. 

-'  Union  Ins.  Co.  v.  American  Fire  Ins.  Co.,  107  Cal.  327,  28  L.  R.  A. 
692. 

-'  Manufacturers'  F.  &  M.  Ins.  Co.  v.  Western  Assur.  Co.,  145  Mass. 
419. 


§§  245-248  THE  CONTRACT.  731 

tract  of  reinsurance;  but  that  tlie  original  policies  fumisli  in 
themselves  particulars  of  the  basis  upon  which  the  contract  of 
reinsurance  stands,  and  that  in  all  dealings  with  the  original 
insured,  the  provisions  of  the  policy  issued  to  him  are  to  he 
obsen^ed.^^ 

Life  Insurance. 

A  condition  of  reinsurance  imposed  by  an  agreement  be- 
tween life  insurance  eomiDanies  that  each  member  desiring 
to  be  reinsured  shall  present  a  satisfactory  transfer  applica- 
tion, does  not  justify  a  refusal  to  reinsure  a  member  on  the 
ground  that  his  application  for  transfer  is  not  satisfactory  on 
account  of  physical  conditions  and  age,  where  the  agreement 
provides  for  the  reinsurance  of  members  on  the  basis  of  their 
original  applications  and  the  rating  of  them  at  the  same 
amount  with  premiums  payable  at  the  same  dates. ^^  When  a 
reinsurer  agrees  to  assume  all  the  outstanding  risks  of  another 
company,  it  cannot  discriminate  between  the  risks;  nor  will 
it  be  heard  to  object  that  at  the  time  its  policy  was  issued  the 
risk  covered  thereby  was*  not  a  safe  or  proper  one  for  it  to 
take.  If  policies  are  transferred  en  bloc  it  is  held,  unless  an 
agreement  appears  to  the  contrary,  that  the  conditions  of  each 
original  policy  remain  unchanged.  And  where  a  transferee 
issues  to  a  policy-holder  of  the  transferror,  a  policy  which 
recites  the  surrender  of  his  original  policy,  and  makes  the 
application  and  representations  previously  given  a  part  of  the 
new  contract  and  a  warranty,  these  will  be  held  to  relate  to 
the  date  of  the  application  for  the  first  policy  and  not  to  the 
date  of  the  issue  of  the  latter  one.^^     A  prohibition  in  a  gen- 

"  Faneuil  Hall  Ins.  Co.  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  153  Mass. 
63,  10  L.  R.  A.  423;  ante,  note  27. 

"National  Mut.  Ins.  Co.  v  Home  Ben.  Soc,  181  Pa.  St.  443. 

'"Cohen  v.  Continental  Life  Ins.  Co.,  69  N.  Y.  300;  Shaw  v.  Repub- 
lic Life  Ins.  Co.,  69  N.  Y.  286. 


■732  EEINSUKANCE.  §§  245-218 

c-ral  insurance  statute,  or  in  a  by-law,  against  insuring  per- 
sons over  sixty  years  of  age,  does  not  affect  a  member  of  an 
insurance  company  which  has  under  authority  of  statute 
transferred  its  risks  to,  or  reinsured  them  in,  another  com- 
pany, though  such  member  is  at  the  date  of  the  transfer  or 
reinsurance  beyond  that  age ;  nor  is  the  transferee  thereby  pro- 
liibited  from  reinsuring  him.^^ 

Heseission. 

In  respect  to  the  duty  of  disclosing  all  material  facts  perti- 
nent to  the  subject  of  the  risk,  the  case  of  reinsurance  does  not 
differ  from  that  of  an  original  insurance.  The  obligation  in 
each  case  is  one  of  uberrimae  fidei.  The  one  effecting  the 
-contract  must  act  in  good  faith,  and  when  asked,  must  give 
such  information  as  he  possesses  affecting  the  character  of 
the  risk  or  the  nature  of  the  peril  insured  against.  If  repre- 
sentations are  made  as  an  inducement  towards  the  procuring 
of  the  contract,  they  must  be  full  and  true.  The  duty  of 
communication  is  independent  of  the  intention,  and  is  vio- 
lated by  the  fact  of  misstatement  oy  concealment  even  where 
there  is  no  design  to  deceive.  The  exaction  of  information  in 
some  instances  may  be  greater  in  the  case  of  reinsurance  than 
-as  between  the  parties  to  an  original  insurance.  In  the  former, 
the  party  seeking  to  shift  the  risk  he  has  already  assumed,  is 
bound  to  communicate  all  infonnation  which  would  be  likely 
to  influence  the  judgment  and  action  of  the  reinsurer ;  while 
in  the  latter  a  party  is  "not  bound,  nor  could  it  be  expected 
that  he  would  speak  evil  of  himself."  If  the  reinsured  omits 
to  perfonn  this  duty,  whether  from  misapprehension  of  the 
probable  effect  of  the  communication,  or  from  design,  and  the 

"^Rand  v.  Massachusetts  Ben.  Life  Ass'n,  18  Misc.  Rep.  336,  42 
N.Y.  SuEp.  26;  Cathcart  v.  Equitable  Mut.  Life  Ass'n,  111  Iowa,  471, 
82  N.  W.  964;  Wiberg  v.  Minnesota  S.  R.  Ass'n,  73  Minn.  297;  Sey- 
mour V.  Chicago  Guaranty  Fund  Life  Soc,  54  Minn.  147. 


§§  24:5-248  THE   CONTRACT.  733 

information  would  be  material  to  the  risk  or  to  tlie  amount 
of  the  premium  to  be  charged,  the  policy  of  reinsurance  will 
be  voidable.  This  obligation  of  a  faithful  disclosure  of  all 
material  facts  is,  however,  to  be  understood  in  a  reasonable 
sense.  The  mle  exacts  the  information  of  facts,  not  con- 
tingencies. If  the  infoitnation  is  stated  as  opinion,  expecta- 
tion, or  belief,  it  does  not  affect  the  policy  if  given  in  good 
faith.  In  such  case  the  insurer  takes  the  risk  of  the  state- 
ment. If  made  in  bad  faith  it  will  avoid  the  policy.  Thus 
the  representations  that  the  primitive  insured  was  a  man  of 
integrity  and  good  business  and  financial  standing,  when  he 
was  not;  that  other  reinsurance  had  been  obtained,  which 
would  tend  to  show  that  otlier  insurers  approved  the  risk, 
when  there  was  no  otlier  insurance ;  that  the  insurer  carried 
and  intended  to  retain  a  part  of  the  risk,  when  in  fact  it  did 
not  retain  any  but  reinsured  the  whole — are  all  instances  of 
false  representations  which  will  warrant  the  reinsurer  in 
cancelling  any  policy  he  may  be  induced  to  issue  in  reliance 
thereon.-^^  But  the  representation  of  an  insurer  that  it  would 
carry  part  of  the  risk,  made  in  good  faith  and  witli  the  full 
expectation  that  this  would  be  done,  does  not  avoid  a  policy 
of  reinsurance  made  in  reliance  on  such  statement  whieli  was 
rendered  impossible  of  fulfilment  by  the  unforeseen  failure  of 
the  first  insurer  to  put  on  board  a  cargo  to  the  amount  of  the 
risk  it  had  sought  and  accepted. ^^  In  this  connection  we  must 
not  overlook  the  distinction  between  a  false  representation  of 

s^  Traill  v.  Baring,  10  Jur.  (N.  S.)  87,  3  Bigelow,  Life  &  Ace.  Cas. 
233;  Foster  v.  Mentor  Life  Assur.  Co.,  3  El.  &  Bl.  48,  3  Bigelow,  Life 
&  Ace.  Cas.  113;  New  York  Bowery  Fire  Ins.  Co.  v.  New  York  Fire 
Ins.  Co.,  17  Wend.  (N.  Y.)  359;  Sun  Mut.  Ins.  Co.  v.  Ocean  Ins.  Co., 
107  U.  S.  485,  1  Sup.  Ct.  598;  Cohen  v.  Continental  Life  Ins.  Co.,  69 
N.  Y.  300. 

'^  Chalaron  v.  Insurance  Co.  of  North  America,  48  La.  Ann.  1582, 
36  L.  R.  A.  742. 


^34.  KEINSURANCE.  §§  245-248 

a- material  fact  which  makes  the  contract  a  nullity,  and  an  oral 
promissory  representation  or  warranty,  made  in  good  faith 
before  the  execution  of  the  written  contract,  in  regard  to  the 
intention,  purpose,  or  future  conduct  of  the  promisor.^* 

Conditions  and  Stipulations  of  Policy. 

Where  the  blank  form  of  policy  used  for  reinsurance  is  that 
of  the  ordinary  policy  of  insurance,  and  contains  the  condi- 
tions that  no  action  can  be  maintained  thereon  until  after  an 
award  made  as  specified  fixing  the  amount  of  the  claim,  nor 
unless  commenced  within  twelve  months  after  the  loss,  these 
conditions  are  inapplicable  to  the  contract  of  reinsurance  and 
the  right  to  recover  is  not  affected  thereby.^^  A  clause  to  the 
effect  that  the  reinsurer  is  made  the  agent  of  the  original 
waiver  for  the  purpose  of  doing  in  regard  to  all  outstanding 
policies  covered  by  the  contract  of  reinsurance,  all  acts  nec- 
essary to  transfer  said  policies  according  to  their  t^rms  and 
conditions,  does  not  make  the  reinsurer  the  sole  agent  for  that 
purpose,  nor  prevent  the  original  insurer  from  consenting  to  a 
transfer.  Unless  a  contrary  intention  clearly  appears,  the 
original  insurer  can  assent  to  any  reasonable  and  proper 
waiver  of  the  conditions  of  its  own  policy  which  does  not  in- 
fluence a  loss  or  increase  the  burdens  of  the  reinsurer.  A  stip- 
ulation that  the  policy  of  reinsurance  is  subject  to  the  same 
conditions  and  terms  as  the  original  policy,  is  construed  to 
mean  only  that  these  provisions  regulate  the  basis  on  which 
the  original  contract  stands  and  dealings  with  the  original  in- 
sured.^"^    But  the  reinsurer  is  discharged  from  liability  to  the 

"Prudential  Assur.  Co.  v.  Aetna  Life  Ins.  Co.,  23  Fed.  438;  Union 
Mut  Life  Ins.  Co.  v.  Mowry,  96  U.  S.  544. 

='•'■  Jackson  v.  St.  Paul  F.  &  M.  Ins.  Co.,  99  N.  Y.  124;  Eagle  Ins.  Co. 
V.  La  Fayette  Ins.  Co.,  9  Ind.  443. 

'"  Fire  Ins.  Ass'n  v.  Canada  F.  &  M.  Ins.  Co.,  2  Ont.  481,  495;  Cashau 
V.  Northwestern  Nat.  Ins.  Co.,  5  Biss.  476,  Fed  Cas.  No.  2499;  Manu- 


§§  24:0-24:8         '  THE   CONTRACT.  735 

original  insurer  if  the  latter,  without  consent  of  the  former, 
subsequent  to  the  making  of  a  contract  of  reinsurance 
which  by  its  temis  becomes  void  in  case  of  the  use  of  the 
property  insured  for  the  storage  of  articles  denominated  as 
extra  hazardous,  for  an  additional  premium  grants  its  assured 
the  privilege  of  canning  extra  hazardous  goods.^'^  A  condi- 
tion that  in  case  of  loss  the  reinsurer  shall  pay  pro  rata  at  and 
in  the  time  and  manner  of  the  reinsured,  means  that  the  rein- 
surer shall  have  all  the  advantages  of  the  time  and  manner 
of  payment  specified  in  the  original  policy.  It  has  no  refer- 
ence to  the  insolvency  of  the  reinsured.^ '^^ 

Extent  of  Liability  of  Reinsurer. 

The  liability  of  a  reinsurer  is  to  be  determined  by  the  word- 
ing of  its  agreement  interpreted  in  accordance  with  the  ordi- 
nary rules  governing  the  construction  of  contracts,  giving 
effect  as  far  as  possible  to  the  expressed  intention  of  the  par- 
ties. The  courts  will  not  enlarge  this  liability  beyond  the 
limits  clearly  and  expressly  fixed  by  the  agi*eemcnt  itself. 
The  contract  is  primarily  one  of  indemnity.  To  indemnify  . 
means  to  secure  one  against,  or  to  compensate  one  for,  dam- 
age or  loss  that  may  happen  from  a  given  act  or  event.  The 
rights  of  an  original  insured  for  whose  benefit  reinsurance 

facturers'  F.  &  M.  Ins.  Co.  v.  Western  Assiir.  Co.,  145  Mass.  419; 
Faneuil  Hall  Ins.  Co.  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  153  Mass.  63, 
10  L.  R.  A.  423.  But  see  North  Pennsylvania  Fire  Ins.  Co.  v.  Sus- 
quehanna Mut.  Fire  Ins.  Co.,  2  Pears.  (Pa.)  291. 

"  St.  Nicholas  Ins.  Co.  v.  Merchants'  Mutual  F.  &  M.  Ins.  Co.,  83 
N.  Y.  604.  As  to  proofs  of  loss,  see  ch.  XIII.  And  see  Cashau  v. 
Northwestern  Nat.  Ins.  Co.,  5  Diss.  476,  Fed.  Cas.  No.  2499;  Yonkers 
&  N.  Y.  Fire  Ins.  Co.  v.  Hoffman  Fire  Ins.  Co.,  6  Rob.  (N.  Y.)  316; 
New  York  Bowery  Fire  Ins.  Co.  v.  New  York  Fire  Ins.  Co.,  17  Wend. 
(N.  Y.)  359;  Consolidated  R.  E.  &  F.  Ins.  Co.  v.  Cashow,  41  Md.  59. 

"  Cashau  v.  Northwestern  Nat.  Ins.  Co.,  5  Biss.  476,  Fed.  Cas.  No. 
2499,  and  cases  cited  in  note  44a,  post. 


736  EEINSUKAXCE.  §§  245-248' 

has  been  effected,  are  determined  by  bis'contracts,  as  in  a  cas& 
of  simple  insurance.  When  an  original  insurer  seeks  to  en- 
force a  contract  bj  which  it  has  sought  to  shift  part  of  its  lia- 
bility to  another,  a  different  question  is  presented.  In  sucli 
case  he  must  show  (1)  the  existence  and  extent  of  a  loss  cov- 
ered by  the  original  policy ;  (2)  his  owti  liability  for  that  loss, 
and  (3)  that  the  reinsurer  has  assumed  this  liability  in  whole- 
or  in  part.  The  reinsurer  is  only  liable  for  the  amount  for 
which  the  original  insurer  is  legally  liable ;  in  no  case  beyond 
the  amount  of  the  reinsurance.  The  former  may  make  any 
defense  against  the  latter  which  the  latter  might  make  against 
the  original  insured.^^ 

A  policy  providing  that  it  is  "subject  to  the  same  causes  and 
conditions  as  the  original  policy,  and  to  pay  as  may  be  paid 
thereon"  does  not  bind  the  reinsurer  to  pay  such  sum  as  the 
insurer  may  choose  to  pay  the  insured,  whether  liable  or  not. 
It  means  the  amount  of  the  actual  liability  of  the  original  in- 
sured. ^^  And  in  an  obligation  to  pay  a  loss  in  such  amounts, 
at  such  times,  and  in  such  manner  as  the  original  insured  may 
pay,  the  words  "may  pay"  signify  "may  be  liable  to  pay."^* 
The  assumption  of  the  contingent  liability  of  an  insurer,  doe& 
nt>t  include  its  obligations  on  account  of  losses  which  have  al- 
ready occurred.  ^^ 

From  the  very  fact  that  the  underlying  principle  of  a  con- 
tract of  reinsurance  is  that  of  indemnity  to  the  original  in- 

''Ante,  notes  1-3;  notes  23-31;  Commercial  Mut.  Ins.  Co.  v.  De- 
troit F.  &  M.  Ins.  Co.,  38  Ohio  St.  11;  London  &  L.  Fire  Ins.  Co.  v. 
Lycoming  Fire  Ins.  Co.,  105  Pa.  St.  424;  Union  Marine  Ins.  Co.  v. 
Martin,  35  Law  J.  C.  P.  181;  Delaware  Ins.  Co.  v.  Quaker  City  Ins. 
Co.,  3  Grant  Cas.  (Pa.)  71;  Illinois  Mut.  Fire  Ins.  Co.  v.  Andes  Ins.^ 
Co.,  67  111.  363. 

^Chippendale  v.  Holt,  65  Law  J.  Q.  B.  104,  73  Law  T.  (N.  S.)  472; 
ante,  note  4. 

^  Fame  Ins.  Co.;s  Appeal,  83  Pa.  St.  396. 

"  Olsen  V.  California  Ins.  Co.,  11  Tex.  Civ.  App.  371,  32  S.  W.  446, 


§§  245-248  LIABILITY   OF    REINSURER.  T37 

surer,  it  follows  that  the  extrerae  limit  of  the  liability  of  the 
reinsurer  is  the  amount  for  which  the  reinsured  is  legally 
liable,  or,  where  the  latter  has  settled  with  the  original  insured 
for  less  than  the  whole  of  his  legal  claim,  the  amount  for  which 
the  settlement  was  made.  The  reinsured  will  not  be  allowed 
to  profit  by  the  transaction.  When  an  insurance  company, 
after  having  taken  a  risk  and  reinsured  it  in  another  company 
to  indemnify  itself  against  loss  under  its  own  policy,  dis- 
charges its  liability  by  payment  of  a  sum  less  than  the 
amount  of  its  debt  to  the  insured  and  within  the  amount  of 
the  reinsurance,  the  sum  so  paid  will  be  taken  and  regarded 
as  the  amount  of  daanage  sustained  and  as  the  measure  of 
indemnity  to  be  recovered.  It  is  not  necessary  for  the  rein- 
sured to  pay  the  loss  to  the  first  insured  before  proceeding 
against  the  reinsurer.  So  long  as  his  liability  to  pay  con- 
tinues he  is  entitled  to  recover  to  the  full  extent  of  such 
liability.  If  he  has  paid  the  amount  for  which  he  was  holdeu 
in  law  he  is  to  the  extent  of  the  reinsurance  entitled  to  re- 
cover the  same  from  his  reinsurer.^^  Nor  is  the  liability  of 
the  latter  affected  by  the  insolvency  of  the  reinsui'ed,  or  his 
inability  to  fulfill  his  owti 'contract  with  the  first  insured  ;^^ 
but  in  such  case  a  court  of  equity  may  compel  the  reinsurer 
to  pay  the  amount  of  its  liability  directly  to  the  original 
insured  or  the  one  ultimately  entitled  to  the  money. ^'^ 

"Illinois  Mut.  Fire  Ins.  Co.  v.  Andes  Ins.  Co.,  67  111.  363;  Mer- 
chants' Mut.  Ins.  Co.  V.  New  Orleans  Mut.  Ins.  Co.,  24  La.  Ann.  305; 
Bainbridge  v.  Neilson,  10  East,  346;  Fame  Ins.  Co.'s  Appeal,  83  Pa. 
St.  396;  ante,  notes  38,  39.  Contra,  Gantt  v.  American  Cent.  Ins.  Co., 
68  Mo.  503. 

"Consolidated  R.  E.  &  F.  Ins.  Co.  v.  Cashow,  41  Md.  61;  Strong  v. 
American  Cent.  Life  Ins.  Co.,  4  Mo.  App.  7;  Hone  v.  Mutual  Safety 
Ins.  Co.,  1  Sandf.  (N.  Y.)  137,  2  Bennett,  Fire  Ins.  Cas.  580;  Eagle 
Ins.  Co.  V.  Lafayette  Ins.  Co.,  9  Ind.  443;  ante,  note  42. 

"  Hunt  V.  New  Hampshire  F.  U.  Ass'n,  68  N.  H.  305,  38  Atl.  145,  38 
L.  R.  A.  514. 

KERR,  INS.  —  47 


738 


EEINSUKANCE. 


§§  245-248 


Pro  rata  Clause. 

Wliere  the  policy  of  reinsTirance  contains  tins  clanse:  "loss, 
if  any,  payable  pro  rata,  at  tlie  same  time  and  in  the  same 
manner  as  by  the  reinsured,"  in  case  of  a  loss  the  reinsurer 
will  be  bound  to  pay  at  the  same  rate  the  reinsured  shall  pay ; 
so  that  if  the  reinsured  pays  only  ten  cents  on  the  dollar  of 
its  insurance,  the  reinsurer  will  pay  the  same  rate  on  the 
amount  of  its  policy. '^^^ 

Evidence  of  Liability  of  Reinsurer. 

The  reinsured,  on  the  happening  of  a  loss,  may  pay  the 
insured  at  once,  at  the  peril  of  having  to  prove  his  own  lia- 
bility in  an  action  against  the  reinsurer;  or  he  may  await  a 
suit  against  himself  and  give  prompt  notice  of  it  to  the  rein- 
surer. In  that  event  the  reinsurer  has  a  fair  opportunity 
to  exercise  an  election  whether  he  will  contest  or  admit  the 
claim.  It  is  his  duty  to  act  upon  such  notice,  and  either  pay 
the  loss  and  avoid  the  litigation,  or  assume  the  defense  of  it. 
If  he  does  neither  and  does  not  authorize  the  reinsured  to 
settle,  he  will  be  held  to  require  that  the  suit  will  be  carried 
on  by  the  reinsured,  Avho  then  becomes,  by  operation  of  law, 
his  agent  for  that  purpose.  And  if  the  reinsured  then  defends 
in  good  faith,  the  judgment  will,  as  to  all  matters  which  are  or 
could  be  litigated  therein,  be  binding  upon  the  reinsurer ;  and 
the  latter  will  also  become  liable  for  all  the  necessary  costs 
and  expenses  of  the  litigation,  provided  the  former  be  held 
liable  on  the  claim.^^     Tlie  reinsurer  is  not  bound  by  a  judg- 


"»  Illinois  Mut.  Fire  Ins.  Co.  v.  Andes  Ins.  Co.,  67  111.  363;  Cashau  v. 
Northwestern  Nat.  Ins.  Co.,  5  Biss.  476,  Fed  Cas.  No.  2,499;  Ex  parte 
Norwood,  3  Biss.  504,  Fed.  Cas.  No.  10,364;  Norwood  v.  Resolute  Fire 
Ins.  Co.,  36  N.  Y.  Super.  Ct.  552;  Blackstone  v.  Alemannia  Fire  Ins. 
Co.,  56  N.  Y.'l04,  4  Daly,  299. 

«  Jackson  v.  St.  Paul  F.  &  M.  Ins.  Co.,  99  N.  Y.  124;  Gantt  v.  Amer- 
ican Cent.  Ins.  Co.,  68  Mo.  503;    Insurance  Co.  of  State   of  Pennsyl- 


§§  245-2i8  DEFENSES    OF   REINSURER.  739 

ment  which  he  was  not  called  upon  to  defend  ;^^  nor  by  an 
arbitration  to  which  he  is  not  a  party  ;^''^  nor  by  a  compromise 
and  settlement  made  without  his  consent  and  approval,^* 

Defenses  of  Reinsurer. 

A  contract  of  reinsurance  in  favor  of  an  insurer  is,  in  one 
sense,  wholly  distinct  from  and  disconnected  with  the  original 
insurance.  The  reinsured,  when  he  seeks  to  enforce  such  a 
<?ontract,  must  prove  his  loss  and  claim  in  the  same  manner 
as  the  original  insured  must  prove  it  against  his  insurer ;  e.  g. 
he  must  prove,  (a)  that  he  had  a  risk  upon  the  subject  insured, 
(b)  that  there  was  a  loss  or  destruction  or  happening  of  the 
contingency  insured  against,  (c)  that  he  incurred  a  liability 
thereby,  and  (d)  that  the  reinsuring  company  has  agreed  to 
indemnify  him  to  some  extent  from  such  liability.  We  have 
already  seen  that  under  some  circumstances  a  judg-ment 
against  the  primitive  insurer  is  binding  and  conclusive  upon 
and  against  the  reinsurer.  In  all  other  cases,  except  when  the 
claim  has  been  settled,  or  compromised,  or  adjusted  with  the 
approval  or  consent  of  the  reinsurer,  it  may,  when  sued,  make 
any  defense  which  the  original  insurer  could  have  made  when 
it  was  sought  to  be  held  liable.  And  if  the  reinsured  was  not 
liable  on  its  policy,  a  recovery  cannot  be  had  against  the  rein- 
surer. If  the  reinsured  was  liable  in  part,  but  only  for  a 
sum  less  than  the  amount  of  the  reinsurance,  the  extent  of 

vania  v.  Telfair,  27  Misc.  Rep.  247,  57  N.  Y.  Supp.  780;  New  York 
State  Marine  Ins.  Co.  v.  Protection  Ins.  Co.,  1  Story,  458,  Fed.  Cas. 
No.  10,216. 

*'  Merchants'  Mut.  Ins.  Co.  v.  New  Orleans  Mut.  Ins.  Co.,  24  La. 
Ann.  .305. 

*'Glen  V.  Hope  Mut.  Life  Ins.  Co.,  1  Thomp.  &  C.  (N.  Y.)  463,  4 
Bigelow,  Life  &  Ace.  Cas.  337. 

"  Commercial  Union  Assur.  Co.  v.  American  Cent.  Ins.  Co.,  68  Cal. 
430, 


740  KEINSUKANCE.  §§  245-248- 

sucli  liability  will  be  the  maximum  of  tbe  liability  of  tbe  rein- 
surer. 

Thus  the  reinsurer  may  take  advantage  of  the  failure  of 
the  original  insured  to  comply  with  the  terms  and  conditions 
of  his  policy;  e.  g.,  his  failure  to  give  notice  of  loss  in  the 
required  manner  and  within  the  specified  time,  or  his  failure 
to  obtain  proper  consent  to  other  insurance,  or  to  a  transfer 
of  the  property  covered.  ^^  The  reinsured  is  not  bound  by  any 
compromise  or  settlement  which  it  did  not  authorize  f^  and  is 
discharged  from  all  liability  if,  without  its  consent,  the  orig- 
inal insurer  for  an  additional  premium  grants  the  assured 
the  privilege  of  carrying  extra  hazardous  goods  in  stock,  where 
the  policy  of  reinsurance  by  its  terms  becomes  void  in  case 
the  property  insured  is  used  for  the  storage  of  articles  classed 
as  extra  hazardous  ;^^  and  may  defend  upon  the  ground  that 
the  reinsured  procured  the  contract  through  fraud,  or  mis- 
representation, or  concealment  of  facts  material  to  the  risk 
to  be  carried.^^  The  reinsurer  is  entitled  to  insist  upon  the 
strict  compliance  by  the  reinsured  with  all  the  conditions, 
stipulations  and  requirements  of  the  contract  of  reinsurance, 
just  as  the  reinsured  is  entitled  to  a  full  compliance  by  the 
original  insured  with  the  terms  and  conditions  of  the  primi- 
tive contract.  ^^  The  consent  of  the  reinsured  to  a  transfer 
of  the  property  insured,  or  an  assignment  of  the  policy,  is 

**  Eagle  Ins.  Co.  v.  Lafayette  Ins.  Co.,  9  Ind.  443;  Delaware  Ins.  Co. 
T.  Quaker  City  Ins.  Co.,  3  Grant  Cas.  (Pa.)  71;  North  Pennsylvania 
Fire  Ins.  Co.  v.  Susquehanna  Mut.  Fire  Ins.  Co.,  2  Pears.  (Pa.)  291; 
Yonkers  fe  N.  Y.  Fire  Ins.  Co.  v.  Hoffman  Fire  Ins.  Co.,  6  Rob. 
(N.  Y.)  316;  Merchants'  Mut.  Ins,  Co.  v.  New  Orleans  Mut.  Ins.  Co., 
24  La.  Ann.  305. 

'"  Cases  in  note  45,  ante. 

"  St.  Nicholas  Ins.  Co.  v.  Merchants'  Mut.  F.  &  M.  Ins.  Co.,  83  N.  Y. 
C04. 

*^  Cases  in  notes  32--34,  ante. 

^  Cases  supra. 


§§  249,  250        AMALGAMATION    OR   CONSOLIDATIOX.  741 

usually  sufficient.^'*  It  is  no  defense  that  tlie  original  policy 
insured  property  for  more  than  two  thirds  of  its  value,  when 
there  is  no  condition  against  so  insuring  in  the  policy  of  rein- 
surance.^^ When  an  ordinary  blank  form  of  an  insurance 
policy  is  used  for  writing  reinsurance,  its  conditions  requiring 
an  award  and  the  bringing  of  suit  within  a  given  time  are 
held  inapplicable.'^^ 

The  Reinsurer  can  Purchase  Offsets. 

A  reinsurer  may  purchase  policies  of  the  reinsured,  and 
claims  against  the  latter  at  less  than  their  face  value  before 
the  occurrence  of  a  loss  which  it  has  reinsured ;  and  in  action 
by  the  assignee  of  the  reinsured  company  to  recover  the  rein- 
surance, the  reinsurer  may  set  off  such  claims  and  policies  at 
their  face  value.^^ 

Amalgamation-  or  Consolidation  of  Companies. 

§  249.  Legislative  consent  is  necessary  to  a  proper  and  legal 
consolidation  of  corporations. 

The  term  "  consolidation  "  is,  however,  often  used  as  descrip- 
tive of  an  agreement  between  two  insurance  companies, 
whereby  one,  for  a  consideration,  reinsures  all  the  policies  and 
takes  over  all  the  business  of  the  other. 

Such  an  agreement  is  lawful;  but  it  does  not  per  se  constitute 
a  novation,  or  destroy  the  rights  of  policy-holders  against  the 
reinsured. 

§  250.  A  mutual  insurance  company,  which  has  the  power 
to  reinsure,  may  accept  a  transfer  of  the  entire  membership  of 
a  similar  company;  and,  for  an  adequate  consideration,  may 
lawfully  agree  to  issue,  and  may  thereafter  issue,  to  the  mem- 

"  Ante,  notes  35-37. 

"'North  Pennsylvania  Fire  Ins.  Co.  v.  Susquehanna  Fire  Ins.  Co., 
2  Pears.  (Pa.)  289. 

""Jackson  v.  St.  Paul  F.  &  M.  Ins.  Co.,  99  N.  Y.  124. 

"Hovey  v.  Home  Ins.  Co.,  13  Am.  Law  Reg.  (N.  S.)  511;  In  re 
Cleveland  Ins.  Co.,  22  Fed.  200. 


742  KEINSUKANCE.  '§§  249-251 

bers  of  the  latter  policies  of  reinsurance  of  the  same  nature  as 
it  is  authorized  to  issue  in  cases  of  primitive  insurance. 

Such  an  arrangement  binds  only  those  members  of  the  re- 
insured company  who  accept  its  benefits,  or  who  ratify  or 
adopt  it. 

§  251.  Special  funds  collected  for  a  particular  purpose  are 
impressed  with  a  trust  in  favor  of  that  purpose.  Their  diver- 
sion to  any  other  purpose  is  unlawful.  They  belong  to  the 
members  who  contributed  them,  in  proportion  to  the  amount 
of  their  contributions. 

Generally. 

A  discussion  of  the  general  law  governing  tlie  consolidation 
of  corporations  is  beyond  the  scope  of  this  work.  We  are 
interested  here  in  that  law  only  as  it  bears  directly  upon  the 
effecting  of  reinsurance.  The  right  to  consolidate,  in  a  legal 
sense,  is  not  implied  from  the  granting  of  a  charter,  or  the 
enactment  of  a  statute  governing  the  formation  of  corpora- 
tions. Special  legislative  authority  is  essential  to  the  proper 
and  legal  consolidation  of  two  or  more  corporate  lx)dies ;  and 
an  attempted  illegal  consolidation  may  be  enjoined  by  a 
stockholder  of  either  of  the  attempting  corporations.  But 
the  requisite  authority  may  exist  in  the  original  constitu- 
tion of  the  corporations;  or  it  may  be  gi'anted  by  a  subse- 
quent statute;  or  an  unauthorized  consolidation  may  there- 
after be  ratified  and  legalized  by  statute.  A  stockholder 
cannot,  however,  be  forced  into  membership  in  the  new  com- 
pany nor  compelled  to  take  stock  in  it  in  exchange  for  his 
old  stock.^^ 

Practically  the  same  result  as  that  effected  by  a  consolida- 
tion, is  often  reached  by  an  agreement  between  two  insurance 

■"Clearwater  v.  Meredith,  1  Wall.  (U.  S.)  25;  Pearce  v.  Madison  & 
I.  R.  Co.,  21  How.  (U.  S.)  442;  Nugent  v.  Supervisors  of  Putnam 
County,  19  Wall.  (U.  S.)  241;  Black  v.  Delaware  &  R.  Canal  Co.,  24 
N.  J.  Eq.  455;  Bishop  v.  Brainerd,  28  Conn.  289;  Lauman  v.  Lebanon 
Valley  R.  Co.,  30  Pa.  St.  42;  post,  note  84. 


§§  249-251        AMALGAMATION    OR    CONSOLIDATION.  743 

companies  whereby  one  transfers  its  good  will  and  business 
to  the  other,  and  has  all  its  risks  reinsured  by  that  other, 
the  reinsurer  at  the  same  time  agreeing  to  carry  out  the  con- 
tracts of  the  reinsured  and  pay  the  losses  of  its  policy-holders 
directly  to  them  and  to  indemnify  the  reinsured  against  all 
claims  and  liabilities  of  all  nature  whatsoever  resulting  from 
or  arising  out  of  the  business.  This  is  more  than  a  contract 
of  reinsurance.  It  is  an  agi-eement  for  the  benefit  of  the 
policy-holders  upon  which  they  are  entitled  to  maintain  ac- 
tions directly  against  the  reinsurer,  who  is,  as  it  were,  a 
^surety  to  the  reinsured.  But  it  does  not  release  the  latter 
from  obligation  to  its  policy-holders.  They  may  have  an 
action  against  each;  but  only  one  satisfaction.  A  novation 
is  not  complete  until  the  creditor  has  accepted  the  substitution 
of  debtors.^^  A  contract  of  the  nature  above  mentioned 
is,  at  least  as  far  as  the  reinsuring  feature  is  concerned, 
within  the  scope  of  the  general  powers  of  a  stock  insurance 
company,  providing  the  act  be  not  foreign  to  the  purpose  of 
its  organization  or  opposed  to  its  plan  of  operation.  A  com- 
pany authorized  only  to  insure  against  fire  losses  Avould  not 
have  the  power  to  reinsure  life  policies ;  nor  could  a  life  insur- 
ance company  reinsure  against  fire  losses;  nor  could  either 
reinsure  the  business  of  an  accident  company.  But  every 
company  is  justified  in  augmenting  its  own  proper  business, 
and  in  soliciting  business,  and  in  taking  surplus  business 
from  any  other  company  carrying  similar  lines  of  risks ;  and 
I  can  see  no  valid  reason  why  what  can  be  done  with  a  number 
of  isolated  risks,  cannot  be  done  with  a  larger  number,  or  with 

"Barnes  v.  Hekla  Fire  Ins.  Co.,  56  Minn.  41;  Johannes  v.  Phenix 
Ins.  Co.,  66  Wis.  50,  27  N.  W.  414;  Hort's  Case,  1  Ch.  Div.  307;  Har- 
man's  Case,  1  Ch.  Div.  326;  Cocker's  Case,  3  Ch.  Div.  1;  In  re  Man- 
chester &  L.  Life  Assur.  &  Loan  Ass'n,  5  Ch.  App.  640. 


744  KEINSURANCE.  §§  249-251 

the  entire  list  of  risks  carried  by  any  company.^*'  Wlien 
one  company  reinsures  all  the  risks  of  another  insurer,  it 
must  take  them  in  toto,  and  cannot  complain  as  to  the  charac- 
ter of  the  risks,  nor  as  to  their  undesirability.as  new  risks,  nor 
because  some  of  those  for  whose  benefit  the  contract  was  made 
have  passed  the  insurable  age  limit,  if  when  first  insured  they 
were  insurable  by  the  original  insurer.®^ 

The  wisdom  of  an  insurance  company  reinsuring  all  its 
risks  and  transferring  its  business  to  another  company,  pre- 
sents no  questions  peculiar  to  the  law  of  insurance.  In  such 
cases  the  general  laws  applicable  to  the  management  of  busi- 
ness corporations  obtain.  A  board  of  directors  has  the  im- 
plied power  to  act  for  their  corporation  in  the  transaction  of 
its  ordinary  and  regular  business.  This  power,  however, 
relates  to  the  management  and  supervision  of  such  business, 
and  does  not  extend  to  the  material  alteration  of,  or  winding 
up  of  the  business  of  the  corporation  except  in  case  of  neces- 
sity. But  tlieir  will  is  supreme  and  their  ideas  and  judg- 
ment as  to  the  conduct  of  the  corporate  business  m«st  govern 
in  the  absence  of  fraud  or  breach  of  trust.^^  Even  though 
a  board  of  directors  has  not  the  power  to  close  up  the  business 
of  their  company,  yet  when  the  best  interests  of  the  company 
demand  it,  it  is  within  their  power  and  it  is  their  duty  to  re- 
insure for  the  benefit  of  their  policy-holders,  and  as  a  con- 
sideration therefor  they  can  transfer  the  personal  property 
of  the  coi-poration.^^  And  where  such  reinsurance  effected 
by  a  board  of  directors  was  unauthorized,  if  the  reinsurer 

"Ante,  notes  9--13;  Brum  v.  Merchants'  Mut.  Ins.  Co.,  4  Woods 
(U.  S.),  156,  16  Fed.  140. 

"Ante,  notes  29-31;  Wiberg  v.  Minnesota  S.  R.  Ass'n,  73  Minn. 
297. 

"Elliott,  Corp.  (3d  Ed.)   §  498  et  seq.;  ante,  notes  20-22. 

•"  Jameson  v.  Hartford  Fire  Ins.  Co.,  14  App.  Div.  380,  44  N.  Y. 
Supp.  15;  Davenport  Fire  Ins.  Co.  v.  Moore,  50  Iowa,  619. 


<§§  249-251        AMALGAMATION   OR    CONSOLIDATION.  745 

tas  executed  and  performed  its  a^eement  by  paying  all 
losses  arising  on  account  of  the  risks  reinsured  by  it,  the 
•consideration  cannot  be  recovered  back.^^  In  cases  of  fraud 
or  gross  mismanagement,  or  for  improper  diversion  of  corpo- 
rate funds,  the  directors  will  be  held  liable  to  the  policy- 
bolders.''^ 

Mutual  Insurance  Companies. 

What  has  been  said  above  concerning  amalgamation,  con- 
solidation, reinsurance,  and  transfer  of  the  total  business  of 
one  stock  company  to  another  is,  in  the  main,  applicable  to 
mutual  insurance  companies.  The  implied  powers  of  these 
•are,  from  the  very  pui-pose  and  nature  of  their  organization 
and  their  plan  of  operation,  less  general  and  more  restricted 
than  are  those  of  stock  insurance  companies.  But  every  cor- 
poration, however  created,  or  for  whatever  purpose,  has,  in 
addition  to  the  powers  specially  gi-anted  to  it,  such  other  and 
further  powers  as  are  reasonably  necessary  to  carry  the 
powers  expressly  granted  into  execution.  Necessary,  in  this 
sense,  does  not  mean  indispensable;  it  means  suitable  and 
proper  to  accomplish  the  end  Avhich  the  legislature  had  in 
view  at  the  time  of  the  grant  of  the  charter,  or  at  the  time 
of  the  passage  of  the  act  authorizing  incorporation.^^  The 
power  to  actually  consolidate  does  not  exist  imless  by  special 
grant.  But  the  obtaining  of  members  is  an  essential  to  the 
very  inception  and  existence  of  a  mutual  organization,  and 
;all  proper  increase  in  membership  adds  to  the  strength  of  the 

"Casserly  v.  Manners,  9  Hun  (N.  Y.),  695;  Alexander  v.  Williams, 
14  Mo.  App.  13. 

*=  Grayson  v.  Willoughby,  78  Iowa,  83,  4  L.  R.  A.  365;  Casserly  v. 
Manners,  9  Hun  (N.  Y.),  695. 

«''  State  V.  Hancock,  35  N.  J.  Law,  537;  People  v.  Pullman's  Palace 
Car  Co.,  175  111.  125,  167;  Oglesby  v.  Attrill,  105  U.  S.  605;  Curtis  v. 
l^eavitt,  IC  N.  Y.  9. 


746 


EEIXSUKAXCE. 


§§  249-251 


organization  and  the  security  of  the  members.  The  authoritv 
to  procure  additional  members  is  both  express  and  implied. 
The  question  is  as  to  the  authority  to  procure  members 
through  reinsurance.  The  authorities  on  this  point  are  not 
numerous.  In  England  the  practice  of  mutual  companies  re- 
insuring the  entire  membership  of  similar  companies  has  long 
obtained,  in  most  cases  with  the  sanction  of  the  law  as  ex- 
pressed by  the  granting  of  charters  which  contemplated  the 
existence  and  use  of  such  powers.^'^  In  Iowa  it  is  held  that  a 
mutual  insurance  company  may  reinsure  its  risks  and  may 
transfer  its  property  including  premium  risks  as  a  considera- 
tion therefor.^^  The  supreme  court  of  the  same  state  has 
also,  on  several  occasions,  recognized  the  correlative  right  of 
a  mutual  insurance  company  (a)  to  contract  for  the  whole 
membership  of  another  mutual  company  doing  business  of  a 
nature  similar  to  its  own,  and  (b)  to  reinsure  the  live  policies- 
of  the  latter  company.^*^  So  has  the  supreme  court  of  New 
Jersey ;'''"  and  others.'^  ^     A  different  rule  obtains  in  Tennes- 

"  Cases  cited  in  note  60,  ante,  and  notes  9-13,  ante. 

"^  Davenport  Fire  Ins.  Co.  v.  Moore,  50  Iowa,  626. 

^'Grayson  v.  Willoughby,  78  Iowa,  83,  4  L.  R.  A.  365;  Twiss  v. 
Guaranty  Life  Ass'n,  87  Iowa,  733,  55  N.  W.  8;  Dishong  v.  Iowa  L.  & 
E.  Ass'n,  92  Iowa,  163,  60  N.  W.  505;  Kennan  v.  Rundle,  81  Wis.  212,. 
51  N.  W.  428;'  Cathcart  v.  Equitable  Mut.  Life  Ass'n,  111  Iowa,  471,. 
82  N.  W.  064. 

"  Smith  V.  Hunterdon  County  Mut.  Fire  Ins.  Co.,  41  N.  J.  Eq.  473. 

"^Brum  V.  Merchants'  Mut.  Ins.  Co.,  4  Woods  (U.  S.),  156,  16  Fed, 
140;  Insurance  Com'r  v.  Provident  Aid  Soc,  89  Me.  413,  36  Atl.  627. 
See,  also,  as  bearing  on  this  question,  Stamm  v.  Northwestern  Mut. 
Ben.  Ass'n.  65  Mich.  317,  32  N.  W^  710;  Alexander  v.  Williams,  14 
Mo.  App.  13;  Cathcart  v.  Equitable  Mut.  Life  Ass'n,  111  Iowa,  471,  82 
N.  W.  964;  Bent  v.  Hart,  73  Mo.  641;  Seymour  v.  Chicago  Guaranty 
Fund  Life  Soc,  54  Minn.  147;  Fame  Ins.  Co.'s  Appeal,  83  Pa.  St.  396; 
National  Mut.  Ins.  Co.  v.  Home  Ben.  Soc.  181  Pa.  St.  443;  Rand  v, 
Massachusetts  Ben.  Life  Ass'n,  18  Misc.  Rep.  336,  42  N.  Y.  Supp.  26; 
Rockhold  v.  Canton  Masonic  Mut.  Benev.  Soc,  129  111.  440,  21  N.  E, 
795;  Hamilton  Mut.  Ins.  Co.  v.  Hobart,  2  Gray  (Mass.),  543;  People  v. 


gg  249-251         AMALGAMATION    OR    CONSOLIDATION,  747 

see;'^^  and  in  Oliio.'''^  In  Missouri  it  lias  been  lield  tliat  the 
power  to  reinsure  does  not  authorize  the  transfer  of  all  risks 
and  property  and  the  closing  up  of  the  business.^^  Where  a 
power  to  reinsure  is  specially  given,  the  terms  of  the  gi-ant 
must  be  strictly  followed  in  the  execution  of  the  power. '^^ 
A  mutual    company  cannot   bind    its    membership   by  an 

Empire  Miit.  Life  Ins.  Co.,  92  N.  Y.  105;  Casserly  v.  Manners,  48  How. 
Pr.  (N.  Y.)  219;  Mason  v.  Cronk,  125  N.  Y.  503;  Lovell  v.  St.  Louis 
Mut.  Life  Ins.  Co.,  Ill  U.  S.  264,  4  Sup.  Ct.  394;  Upton  v.  Jackson 
(Mich.),  4  Ins.  Law  J.  189;  New  York  Bowery  Fire  Ins.  Co.  v.  New 
York  Fire  Ins.  Co.,  17  Wend.  (N.  Y.)  359;  Insurance  Co.  of  North 
America  v.  Hibernia  Ins.  Co.,  140  U.  S.  565;  Davenport  Fire  Ins.  Co.  v. 
Day  (Iowa),  11  Ins.  Law  J.  174;  Cannon  v.  Home  Ins.  Co., 53  Wis. 585: 
Goodman  v.  Jedidjah  Lodge,  67  Md.  117;  McKean  v.  Biddle,  181  Pa. 
St.  361;  Grobe  v.  Erie  County  Mut.  Ins.  Co.,  24  Misc.  Rep.  462,  53 
N.  Y.  Supp.  628;  ante,  notes  9--13,  17--22,  29-31;  Greeff  v.  Equitable 
Life  AsrAir.  Soc,  160  N.  Y.  19,  46  L.  R.  A.  288.  In  this  connection  the 
benefits  and  advantages  afforded  by  the  reinsurance  must  be  consid- 
ered. Jameson  v.  Hartford  Fire  Ins.  Co.,  14  App.  Div.  380,  44  N.  Y. 
Supp.  15. 

"  An  agreement  ty  which  one  life  company  transfers  to  another 
life  company  all  of  its  assets  in  consideration  of  the  latter's  under- 
taking to  reinsure  all  the  risks,  and  to  assume  and  pay  all  the  debts 
and  liabilities  of  the  former  company,  is  ultra  vires  and  void,  al- 
though the  vendor  company  may  be  authorized  by  charter  to  reinsure 
its^risks.     Smith  v.  St.  Louis  Mut.  Life  Ins.  Co.,  2  Tenn.  Ch.  727. 

"  State  V.  Monitor  Fire  Ass'n,  42  Ohio  St.  555.  A  company  which 
has  divided  its  business  into  two  branches  cannot  transfer  all  the 
policies  in  one  branch  to  another,  under  authority  to  reinsure  with 
any  mutual  or  other  insurance  company,  so  as  to  make  a  policy- 
holder in  one  branch  liable  to  assessment  for  losses  on  the  policies 
transferred.  Beaver  &  T.  Mut.  Fire  Ins.  Co.  v.  Trimble,  23  Up.  Can. 
C.  P.  252.    And  see  Relfe  v.  Columbia  Life  Ins.  Co.,  10  Mo.  App.  169. 

''Price  v.  St.  Louis  Mut.  Life  Ins.  Co.,  3  Mo.  App.  262;  Barden  v. 
St.  Louis  Mut.  Life  Ins.  Co.,  3  Mo.  App.  248.  Compare  People  v.  Em- 
pire Mut.  Life  Ins.  Co.,  92  N.  Y.  105;  Relfe  v.  Columbia  Life  Ins.  Co., 
10  Mo.  App.  169;  Bent  v.  Hart,  73  Mo.  641;  Alexander  v.  Williams, 
14  Mo.  App.  13. 

"Ernest  v.  Nicholls,  6  H.  L.  Cas.  400;  In  re  Merchants'  &  Trades- 
man's Assur.  Soc,  L.  R.  9  Eq.  694;  Carr's  Case,  33  Beav.  542, 


748  EEIN'SCRAXCE.  §§  249-251 

agi'eement  to  perform  all  the  contracts  of  another  company  to 
its  policy-holders,  including  liability  for  losses  unpaid  before 
the  making  of  the  contract  )''^  nor  can  it  issue  to  a  reinsured 
a  policy  which  it  cannot  issue  to  its  own  members.  Thus  a 
life  and  endo"\\Tnent  insurance  company  which  cannot  issue 
endowment  certificates  to  its  own  members  cannot  by  contract 
impose  a  liability  upon  them  for  the  payment  of  endowment 
certificates  for  another  society."^ 

Ultra  Vires  Contract 

When  an  ultra  vires  contract  is  made,  and  performed  on 
one  side,  the  other  contracting  party  cannot  be  permitted  to 
enjoy  the  benefits  received  and  escape  all  liability,  but  will 
be  required  in  a  proper  action  to  account ;  in  other  words,  the 
doctrine  of  the  want  of  a  proper  power  to  contract  cannot  be 
invoked  to  aid  a  party  to  perpetrate  wrong  and  injustice.  But 
one  whose  position  has  not  been  changed  or  prejudiced  by  the 
ultra  vires  contract  cannot  reap  any  advantage  from  it.''^^  A 
contract  between  a  mutual  fire  insurance  company  and  its 
policy-holders  whereby  the  latter  establish  a  fund  for  the  pur- 
pose of  guaranteeing  the  existing  and  future  indebtedness  of 
the  company  is  ultra  vires  and  void,  where  the  power  to  make 
such  a  contract  is  not  expressly  conferred  upon  the  company 
by  its  charter,  and  is  not  within  its  general  powers  for  rais- 
ing a  fund  to  meet  its  losses  and  expenses.  And  the  courts 
will  not  aid  in  its  enforcement.*^^  A  mutual  company  cannot 
reinsure  jwlicies  which  it  is  prohibited  to  issue;  and  the  fact 

■'Twiss  V.  Guaranty  Life  Ass'n,  87  Iowa,  733,  55  N.  W.  8;  State  v. 
Monitor  Fire  Ass'n,  42  Ohio  St.  555. 

"Dishong  v.  Iowa  L.  &  E.  Ass'n,  92  Iowa,  163,  60  N.  W.  505;  Ken- 
nan  V.  Rundle,  81  Wis.  212,  51  N.  W.  428;  Grayson  v.  Willoughby,  78 
Iowa,-  S3,  4  L.  R.  A.  365, 

"  Twiss  V.  Guaranty  Life  Ass'n,  87  Iowa,  733,  55  N.  W.  8. 

'"Kennan  v.  Rundle,  81  Wis.  212,  51  N.  W.  426. 


§§  2'±9-251         AMALGAMATION    OE    CONSOLIDATION.  74 i> 

that  the  reinsuring  company  has  collected  assessments  for  or- 
dinary death  losses  from  the  holders  of  such  policies,  after  the 
reinsurance  was  effected,  does  not  estop  it  from  denying  liabil- 
ity under  the  prohibited  clause  in  the  policies.^^  But  the 
general  rule  first  mentioned  is  intended  to  promote  justice; 
and  the  exceptions  are  not  engTafted  upon  it  to  aid  injustice, 
but  rather  to  preserve  the  integrity  of  the  body  of  substantive 
law.  And  the  courts  will,  when  possible,  enforce  the  con- 
tracts of  j)arti3s;  especially  when  the  contracts  have  been 
executed  and  are  not  merely  executory.  Thus  where  the 
directors  of  a  company,  acting  in  excess  of  their  authority,, 
reinsure  the  rislvs  of  the  company  and  pay  a  consideration 
therefor,  after  which  the  reinsurer  executes  and  performs  its 
agreement  by  paying  all  losses  on  risks  reinsured  by  it,  the 
consideration  cannot  be  recovered  back  because  the  obligation 
might  have  been,  but  was  not  in  fact,  repudiated  as  unlawful. 
Where  the  agreement  made  has  been  fully  performed  on  both 
sides,  it  cannot  bo  rescinded  as  unauthorized  or  in  excess  of 
corporate  power,  or  because  made  by  parties  incapable  of 
binding  the  corporations.  The  law  would  not  enforce  such 
an  agreement  as  long  as  it  remained  executory;  neither  will 
the  law  annul  it  after, it  has  been  performed,^ ^  nor  will  one 
be  heard  to  retain  the  benefits  and  repudiate  the  obligations 
of  his  contracts.  Thus  where  two  insurance  companies  con- 
solidate without  legal  authority,  and  one  transfers  all  its- 
assets  to  the  other  whose  name  and  entity  is  preserved  for  the 
conduct  of  the  joint  business,  this  latter  is  bound  for  the 

'"Dishong  v.  Iowa  L.  &  E.  Ass'n,  92  Iowa,  163,  60  N.  W.  505;  Rock- 
hold  V.  Canton  Masonic  Mut.  Benev.  Soc,  129  111.  440,  21  N.  E.  795. 

"Casseiiy  v.  Manners,  9  Hun  (N.  Y.),  695,  48  How.  Pr.  219;  Cath- 
cart  V.  Equitable  Mut.  Life  Ass'n,  111  Iowa,  471,  82  N.  W.  964;  Alex- 
ander V.  Williams,  14  Mo.  App.  13;  Jameson  v.  Hartford  Fire  Ins. 
Co.,  14  App.  Div.  380,  44  N.  Y.  Supp.  15. 


750  EEINSUKAXCE.  §§  249-251 

obligations  of  the  other  so  far  as  the  assets  transferred  will 
liquidate  them.^^ 

Who  is  Bound  by  a  Reinsurance. 

When  reinsurance  is  effected  by  an  insurer  for  the  benefit 
of  its  policy-holders,  these  latter  have  the  option  of  accepting 
or  rejecting  the  new  contract.^^     This  is  true  whether  the 
primitive  insurer  be  a   stock  or   a  mutual  company;    and 
whether  the  insured  be  a  mere  policy-holder  in  the  fonner, 
or  an  insured  member  in  the  latter.     And  even  if  a  mutual 
company  bo  authorized  by  law  to  reinsure  upon  a  vote  of  a 
majority  of  its  members,  and  to  transfer  its  property  to  the 
i^einsuring  company   as  consideration  for  the   reinsurance, 
still  the  rights  of  dissenting  pohcy-holders  are  not  necessarily 
affected  by  virtue  of  the  reinsurance  effected  by  their  own 
company.     The  corporation  would  indeed  have  the  authority 
to  execute  the  power  conferred  upon  it  by  proceeding  in  ac- 
cordance with  the  terms  of  the  grant.     Every  person  Avho  be- 
comes a  member  of  a  corporation  agrees,  by  necessary  impli- 
cation, that  he  mil  be  bound  by  all  acts  and  proceedings  of 
the  majority,  duly  done  and  had  according  to  law,  and  within 
the  scope  of  the  corporate  power  and  authority.     But  the 
majority  of  the  stockholders  of  a  corporation  have  no  power  to 
involve  the  minority  in  a  reorganization  without  its  consent, 
in  such  manner  as  to  compel  the  minority  to  accept  a  new  con- 

8^  Brum  V.  Merchants'  Mut.  Ins.  Co.,  4  Woods  (U.  S.),  156,  16  Fed. 
140;  Anglo-Australian  Life  Assur.  Co.  v.  British  Provident  L.  &  F. 
Soc,  3  Giff.  521;  Cocker's  Case,  3  Ch.  Div.  1;  Relfe  v.  Columbia  Life 
Ins.  Co.,  10  Mo.  App.  150;  People  v.  Empire  Mut.  Life  Ins.  Co.,  92 
N.  Y.  105;  Reese  v.  Smyth,  95  N.  Y.  645;  Heman  v.  Britton,  88  Mo. 
549;  Lovell  v.  St.  Louis  Mut,  Life  Ins.  Co.,  Ill  U.  S.  264,  4  Sup.  Ct. 
394. 

^  Note  8a,  ante. 


§§  249-251        AMALGAMATION    OK    CONSOLIDATION.  T51 

tractual  relation  with  a  new  company.^*  An  agreement  to 
reinsure  all  the  members  of  a  mutual  society  may  be  binding 
on  the  reinsurer  or  the  transferee  of  the  assets  of  the  reinsured 
company  f^  but  this  agreement  becomes  a  contract  only  w^ith 
such  members  of  the  latter  company  as  consent  to  the  change, 
and  accept  the  liability  of  the  new,  in  lieu  of  the  old,  com- 
pany.^^  And  if,  after  an  ultra  vires  contract  of  reinsurance 
has  been  consummated,  a  policy-holder  in  the  reinsured  com- 
pany has  paid  premiums  to  the  reinsurer,  and  has  not  re- 
ceived from  it  a  policy,  he  may  recover  from  the  latter  the 
premiums  paid  with  interest.^^ 

Katiflcation  of  Reinsurance  Agreement. 

We  have  already  seen  that  an  agreement  for  reinsurance 
may  be  binding  as  between  two  insurers  and  not  binding  upon 
the  policy-holders.  Any  lawful  contract  which  is  intended 
for  the  benefit  of  policy-holders  may  be  adopted  or  ratified 
by  them;  and  from  the  time  of  its  adoption,  or  ratification, 
becomes  binding  on  them.  Whether  or  not  certain  acts  con- 
stitute adoption  or  ratification  is  a  question  of  law.     If  the 

"Post  V.  Beacon  V.  P.  &  E.  Co.  (C.  C.  A.),  84  Fed.  371;  Hamilton 
Mut.  Ins.  Co.  V.  Hobart,  2  Gray  (Mass.),  543;  Kittel  v.  Augusta,  T.  & 
G.  R.  Co.,  78  Fed.  855;  Benesh  v.  Mill  Owners'  Mut.  Fire  Ins.  Co.,  103 
Iowa,  46;"),  72  N.  W.  674;  Price  v.  St.  Louis  Mut.  Life  Ins.  Co.,  3  Mo, 
App.  263-273;  Smith  v.  St.  Louis  Mut.  Life  Ins.  Co.,  2  Tenn.  Ch.  727. 
But  see  McKean  v.  Biddle,  181  Pa.  St.  361.  The  English  rule  would 
seem  to  be  that,  when  amalgamation  is  provided  for  by  the  com- 
pany's charter,  the  act  of  the  majority  binds  all.  Harman's  Case,  1 
Ch.  Div.  326;  Horfs  Case,  1  Ch.  Div.  307;  Cocker's  Case,  3  Ch.  Div.  1; 
In  re  Manchester  &  L.  Life  Assur.  &  Loan  Ass'n,  5  Ch.  App.  640. 

«  Notes  9-13,  29-31. 

«» Insurance  Com'r  v.  Provident  Aid  Soc,  89  Me.  413,  36  Atl.  627; 
Bent  V.  Hart,  73  Mo.  641;  Grayson  v.  Willoughby,  78  Iowa,  83,  4  L. 
R.  A.  365;  People  v.  Empire  Mut.  Life  Ins.  Co.,  92  N.  Y.  105;  Mason 
V.  Cronk,  125  N.  Y.  496;  Casserly  v.  Manners,  48  How.  Pr.  (N.  Y.) 
219;  Smith  v.  Hunterdon  County  Mut.  Fire  Ins.  Co.,  41  N.  J.  Eq.  473. 

"  Smith  V,  St.  Louis  Mut.  Life  Ins.  Co.,  2  Tenn.  Ch.  727. 


752  EEINSUKANCE.  §§  249-251 

acts  are  of  sucli  a  nature  as  to  evidence  the  intent  of  the  policy- 
holder to  take  advantage  of  the  benefit  which  he  could  accept 
or  reject,  and  to  consent  to  the  substitution  of  the  new  contract 
in  the  place  of  the  old,  and  to  accept  the  responsibiliy  of  the 
reinsurer  in  place  of  the  primitive  insurer,  then  adoption^ 
or  ratification,  or  novation  takes  place.  The  mere  payment 
of  premiums  to  and  taking  receipts  of  the  new  company,  even 
when  amalo-amation  is  lawful  does  not  alone  constitute  a 
novation.  It  must  appear  that  the  new  company  had  the 
corporate  power  to  assume  the  contracts  of  the  old  company,, 
that  the  fact  of  transfer  was  communicated  to  the  insured^ 
and  his  acceptance  must  be  proved  by  acts  which  unequiv- 
ocally denote  his  understanding  and  acceptance  of  the  pro- 
posal and  substitution.^^  The  making  of  an  application  for 
insurance  in  the  new  company  is  not  a  ratification  of  a  con- 
solidation which  will  bar  a  claimant  from  procuring  his 
remedy  against  the  old  company.^^  An  act  of  legislature 
by  which  the  members  of  several  mutual  fire  insurance  com- 
panies are  made  a  new  corporation,  and  which  "shall  not 
affect  the  legal  right  of  any  person,"  and  is  to  take  effect 
"when  accepted  by  the  members  of  said  companies,"  does  not 
constitute  a  member  of  one  of  the  old  companies,  who  does 
not  expressly  assent  to  it,  a  member  of  the  new  corporation, 
even  though  the  act  be  duly  accepted  by  a  majority  of  the 
members  of  each  of  the  old  companies.°*^ 

"Notes  85,  87;  Relfe  v.  Columbia  Life  Ins.  Co.,  10  Mo.  App.  169. 

»» Grayson  v.  Willoughby,  78  Iowa,  83,  4  L.  R.  A.  365. 

'"Hamilton  Mut.  Ins.  Co.  v.  Hobart,  2  Gray  (Mass.),  543.  See,  also, 
Lovell  V.  St.  Louis  Mut.  Life  Ins.  Co.,  Ill  U.  S.  265;  People  v.  Empire 
Mut.  Life  Ins.  Co.,  92  N.  Y.  105;  In  re  Family  Endowment  Soc,  5 
Ch.  App.  118;  Conquest's  Case,  1  Ch.  Div.  334;  Hort's  Case,  1  Ch.  Div. 
307;  Cocker's  Case,  3  Ch.  Div.  1;  Dowse's  Case,  3  Ch.  Div.  384;  In  re 
Manchester  &  L.  Life  Assur.  &  Loan  Ass'n,  5  Ch.  App.  640;  In  re 
Anchor  Assur.  Co.,  5  Ch.  App.  632;  Shaw  v.  Republic  Life  Ins.  Co., 
67  Barb.  (N.  Y.)  586;  Wynne's  Case,  28  Law  T.  (N.  S.)  805;  Upton 


I 


§§  249-251        AMALG  A.M ATION    OK   CONSOLIDATION. 


i53 


The  Rights  of  Policy-holders  Who  Do  Not  Accept  the  New 
Contract. 

The  contract  of  an  insurance  company  with  its  policy- 
holders implies  that  it  will  retain  its  assets  in  its  OAvn  posses- 
sion and  continue  its  business.  If  it  reinsures  its  risks  and 
parts  with  its  reserve  the  contract  is  at  once  broken  at  the  op- 
tion of  the  assured ;  the  policy-holders  are  not  obliged  to- 
pay  premiums  to  another  company  unless  they  wish  to,  and 
are  not  bound  to  pay  premiums  to  the  company  which  has,  by 
the'  transfer  of  its  property,  incapacitated  itself  from  dis- 
charging its  obligations  when  they  mature ;  so  they  may  treat 
the  contract  as  broken  and  recover  for  its  breach.  Where  one 
party  to  an  executory  contract  prevents  the  performance  of 
it,  or  puts  it  out  of  his  own  power  to  perform  it,  the  other 
party  may  regard  it  as  tenninated,  and  demand  whatever 
damage  he  has  sustained  thereby.  The  question  remains 
as  to  what  is  justly  due  in  such  a  case.  If  the  insurer  be  a 
stock  or  old-line  company,  the  measure  of  damages  is  the 
amount  which  it  vdll  cost  to  obtain  a  similar  policy  in  a 
reliable  company ;  if  for  any  reason,  other  insurance  of  equal 
value  cannot  be  obtained,  the  measure  of  damages  will  prob- 
ably be  the  amount  of  premiums  paid  with  interest.^  ^  In 
the  case  of  a  mutual  insurance  company  violating  its  con- 
tract, the  supreme  court  of  the  United  States  has  held  that  the 

V.  Jackson  (Mich.),  4  Ins.  Law  J.  189;  Bennett  v.  City  Ins.  Co.,  115 
Mass.  241,  4  Ins.  Law  J.  109;  Reese  v.  Smyth,  95  N.  Y.  645;  Barnes  v. 
Hekia  Fire  Ins.  Co.,  56  Minn.  41;  Johannes  v.  Phenix  Ins.  Co.,  66 
Wis.  50,  27  N.  W.  4]  4. 

M.  insured  his  life  in  the  B.  Company,  which  amalgamated  with  the 
E.  Company,  and  ceased  to  do  business.  Subsequently  a  memoran- 
dum under  the  seal  of  the  E.  Company  was  indorsed  on  the  policy, 
by  which  it  agreed  that  it  would  be  liable  for  the  payment  of  the 
policy  if  future  premiums  were  paid  to  it.  They  were  so  paid.  Held, 
a  complete  novation.     Miller's  Case,  3  Ch.  Div.  391. 

''  May,  Ins.  (3d  Ed.)  §§  358.  363b,  429. 
KERR,  INS.— 48 


751  KE1N8URANCE.  §§  249-251 

insurod  is  not  entitled  to  recover  the  full  amount  of  the 
preminms  paid  with  interest,  but  that  the  value  of  the  insur- 
ance wliile  it  has  run  should  be  deducted,  leaving  as  the 
amount  due  what  is  called  and  known  in  insurance  business  as 
the  "value  of  the  policy"  at  the  time  of  its  surrender  accord- 
ing to  actuarial  tables,  less  any  premiums  due  the  insurer.^" 
But  in  a  mutual  assessment  company  this  "value  of  the  policy" 
is  largely  conjectural.  Speaking  of  an  attempt  to  fix  such 
damages  the  supreme  court  of  lowa^^  said  this  "-would  involve 
an  estimate  of  what  the  value  of  a  policy  in  an  assessment 
life  insurance  company  will  be  several  years  in  the  future,  or, 
rather,  what  is  the  present  value  of  a  policy  payable  in  the 
future.  It  is  apparent  that  no  estimate  of  its  value  can  he 
made.  It  may  be  worth  something  or  nothing,  depending 
entirely  on  whether  there  shall  be  any  assessable  members 
when  the  policy  shall  mature."  The  Minnesota  rule  fixes 
the  measure  of  damages  as  the  difference  between  the  cost  of 
new  insurance  in  a  similar  company  for  the  term  of  the  nat- 
ural life  of  the  insured  according  to  the  mortuary  tables,  and 
the  cost  of  carrying  the  breached  policy  for  the  same  term ; 
or,  if  new  insurance  cannot  be  obtained,  then  the  damage  is 
the  present  value  of  the  policy  as  of  the  date  of  estimated 
death,  less  the  cost  of  carrying  it  from  the  date  of  the 
breach.^  ^ 

The  Reserve  or  Trust  Fund  of  Mutual  Societies. 

Monies  collected  from  all  or  any  of  the  classes  into  which 
the  membership  of  a  mutual  company  may  be  divided,  for  the 

"'Lovell  V.  St.  Louis  Mut.  Life  Ins.  Co.,  Ill  U.  S.  264,  4  Sup.  Ct. 
395;  Smith  v.  St.  Louis  Mut.  Life  Ins.  Co.,  2  Tenn.  Ch.  727. 

»=  Grayson  v.  Willoughby,  78  Iowa,  83,  4  L.  R.  A.  365. 

"*  Ebert  v.  Mutual  Reserve  Fund  Life  Ass'n,  81  Minn.  116,  83  N.  W. 
510.    See,  also.  People  v.  Empire  Mut.  Life   Ins.  Co.,  92   N.  Y.  105; 


■§§  249-251        AMALGAMATION    OK    CONSOLIDATION.  755 

purpose  of  creating  a  special  fund, — e.  g.  a  mortuary,  benefit, 
or  resen-e  fund —  are  impressed  with  a  trust  in  favor  of  the 
purpose  for  which  they  have  been  paid,  and  cannot,  without 
the  consent  of  the  contributors,  be  diverted  to  any  other  use. 
And  the  general  funds  of  such  a  company  in  excess  of  the 
amount  necessary  to  liquidate  the  debts  of  the  company  belong 
to  the  membership  whence  they  came. 

Thus  a  statute  authorizing  the  formation  of  a  corporation 
to  insure  its  members  against  loss  by  fire,  and  authorizing  the 
making  and  enforcing  of  contracts  of  indemnity  amongst  its 
members,  and  the  levying  and  collecting  of  assessments  to 
pay  losses,  does  not  authorize  the  insuring  of  members  for  a 
fixed  annual  premium.  The  funds  derived  from  assessments 
to  pay  losses  are  in  their  nature  trust  funds  to  be  applied  to 
the  i)ayment  of  such  losses;  hence  the  use  of  such  funds,  or 
any  part  thereof,  for  the  purchasing  of  assets  of  another 
corporation,  or  for  the  payment  of  losses  to  members  of  such 
other  corporat^ion  whose  risks  have  been  assumed,  is  a  misap- 
plication of  funds.^^  Nor  does  the  fact  that  a  company  is 
authorized  to  reinsure  its  risks,  or  is  by  statute  permitted  to 
discontinue  its  business  and  wind  up  its  affairs,  release  it 
from  its  existing  obligations  to  its  members  and  policy- 
holders. It  has  no  right  to  turn  them  over  to  another  com- 
pany without  their  consent;  and  policy-holders  need  not  in 
order  to  protect  their  legal  rights  protest  against  the  effort 
so  to  do.^^  If  the  result  of  such  an  unauthorized  act  is  to  in- 
duce the  vendor  company  to  cease  to  use  its  franchises,  and  to 
produce  practical  insolvency,  the  policy-holders  may  treat  the 

Mason  v.  Cronk,  125  N.  Y.  503;  Insurance  Com'r  v.  Provident  Aid 
Soc,  89  Me.  413,  36  Atl.  627;  Alexander  v.  Williams,  14  Mo.  App.  13; 
Casserly  v.  Manners,  48  How.  Pr.  (N.  Y.)  219,  9  Hun,  695. 

"'State  V.  Monitor  Fire  Ass'n.  42  Ohio  St.  555;  ante,  notes  76,  77. 

••People  '^  Empire  Mut.  Life  Ins.  Co.,  92  N.  Y.  105;  note  86. 


756  KEINSUKANCE.  §§  249-251 

contract  as  broken  and  proceed  to  subject  tlie  transferred  tmst 
funds  and  other  corporate  property  to  the  satisfaction  of  their 
claims.  Securities  deposited  Avith  a  state  insurance  depart- 
ment, by  an  insurance  company,  or  a  bond  given  in  lieu  of 
such  securities,  constitute  a  special  trust  fund  for  the  benefit 
of  the  policy-holders  of  that  company.  A  transfer  of  its 
assets  does  not  transfer  this  fund  discharged  of  its  trust,  so 
that  the  reinsuring  company  may  apply  it  in  payment  of  its 
general  creditors.  If  the  reinsuring  company  withdraw  such 
fund  and  replace  it  with  its  own,  the  latter  will  be  affected 
with  the  trust  attached  to  the  withdrawn  deposit.^''^  When  a 
trust  fund  reaches  such  proportions  as  to  make  it  safe  and 
prudent  to  divide  the  net  income  amongst  its  members,  such 
division  may  be  made,  even  though  against  the  wish  and  pro- 
test of  the  minority.^^ 

Each  member  of  a  mutual  company  has  an  undivided  in- 
terest in  accumulated  trust  funds  to  which  he  has  contributed,, 
in  proportion  to  the  amount  of  his  contributions,  and  subject 
to  the  laws  of  the  organization.  The  majority  of  the  member- 
ship can  no  more  deprive  a  dissenting  member  of  his  share 
in  such  fund,  small  and  undivided  though  the  portion  be,  by 
an  agreement  to  consolidate  with,  or  reinsure  with,  and 
transfer  the  corporate  assets  to  another  company,  than  they 
can-eompel  him  to  assume  membership  in  the  new  company. 

'  "^Lovell  V.  St.  Louis  Mut.  Life  Ins.  Co.,  Ill  U.  S.  264;  People  v. 
Empire  Mut.  Life  Ins.  Co.,  92  N.  Y.  105;  Reese  v.  Smyth,  95  N.  Y. 
645;  Relfe  v.  Columbia  Life,  Ins.  Co.,  10  Mo.  App.  151;  Smith  v.  St. 
Louis  Mut.  Life  Ins.  Co.,  2  Tenn.  Ch.  727;  In  re  Family  Endowment 
Soc,  5  Ch.  App.  118;  Brum  v.  Merchants'  Mut.  Ins.  Co.,  4  Woods 
(U.  S.),  156,  16  Fed.  140;  Hughes  v.  Hunner,  91  Wis.  116,  64  N.  W. 
S87;    ante,  notes  82,  86,  94. 

•'  McKean  v.  Biddle,  181  Pa.  St.  361 ;  Fry  v.  Provident  Sav.  Life 
Assur.  Soc.  (Tenn.  Ch.  App.),  38  S.  W.  116;  Greeff  v.  Equitable  Life 
Assur.  Soc,  160  N.  Y.  19,  46  L.  R.  A.  288;  Jameson  v.  Hartford  Fire 
Ins.  Co.,  14  App.  Div.  380,  44  N.  Y.  Supp.  15. 


§§  249-251         AMALGAMATION    OR    CONSOLIDATION.  757 

Wlien  the  new  contract  is  made  it  binds  only  those  who  con- 
sent. When  a  comj^any  reinsures  all  its  risks  and  has  a 
large  sum  of  money  in  the  treasury,  being  the  proceeds  of 
assessments  paid  by  their  present  and  past  policy-holders, 
it  is  held  that  all  the  }X)1  icy-holders  who  contributed  to  such 
sui'plus,  are  entitled  to  a  proportion  thereof  according  to  the 
amount  of  their  respective  payments,  whether  they  continued 
to  be  policy-holders  to  the  date  of  the  distribution  or  not.^^ 
A  mortuaiy  fund,  being  a  special  trust  fund,  will  be  distrib- 
uted so  as  to  secure  protection  to  all.  And  where  the  memberr 
ship  of  a  company  divides  into  two  classes,  a  reinsuring,  and 
a  non-reinsuring,  the  fund  will  be  divided  between  the  two  in 
proj)ortion  to  the  amount  of  their  policies  held  by  each 
class.  •'*'*^  ^Vhere  a  mutual  endowment  association,  whose 
policies  are  paid  from  assessments,  is  dissolved,  the  holders 
of  immature  policies  can  only  share  in  the  assets  after  the 
pajmient  of  other  lial)ilities.^°^  A  new  company  organized  to 
carry  on  an  insurance  business  of  the  same  general  nature 
as  an  illegally  incorporated  association  of  the  same  name,  and 
com]X)sed  of  some  of  the  old  membership,  is  not  liable  upon 
a  policy  issued  by  the  old  company  even  though  the  reseiwe 
fund  of  the  latter  has  been  transferred  to  the  other  in  con- 
sideration of  certain  advantages  offered  to  the  old  member- 
ship.^*^^     But  a  mutual  benefit  association,  that  has  created 

''Smith  V.  Hunterdon  County  Mut.  Fire  Ins.  Co.,  41  N.  J.  Eq.  473; 
Bird  V.  Mutual  Union  Ass'n,  30  App.  Div.  346,  52  N.  Y.  Supp.  1044; 
In  re  Youtlas'  Temple  of  Honor,  73  Minn.  319,  76  N.  W.  59. 

i°«  Insurance  Com'r  v.  Provident  Aid  Soc,  89  Me.  413,  36  Atl.  627. 

"^  In  re  Educational  Endowment  Ass'n,  56  Minn.  171.  Otherwise 
if  the  certificates  have  matured.  Failey  v.  Fee,  83  Md.  83,  34  Atl. 
839,  32  L.  R.  A.  311.  See  Corey  v.  Sherman,  96  Iowa,  114,  64  N.  W. 
828,  32  L.  R.  A.  490;  People  v.  Life  &  Reserve  Ass'n,  150  N.  Y.  94; 
Farmers'  L.  &  T.  Co.  v.  Aberle,  18  Misc.  Rep.  257,  41  N.  Y.  Supp.  638; 
Temperance  Mut.  Ben.  Ass'n  v.  Home  Friendly  Soc,  187  Pa.  St.  38. 

"^Adam.s  v.  Northwestern  E.  &  L.  Ass'n,  63  Minn.  184.  See,  also, 
Reese  v.  Smyth,  95  N.  Y.  645;  Heman  v.  Britton,  88  Mo.  549. 


758  KEINSUEANCE.  §§  249-251 

an  endowment  fund,  cannot,  on  being  refused  a  license  in  the 
state  in  which  it  was  incorporated  and  thus  compelled  to 
cease  business,  organize  a  new  company,  and,  against  the  pro- 
test of  members  of  the  old  company  use  such  endowment  fund 
to  obtain  reinsurance  of  the  old  members  in  the  new  company  ; 
and  an  action  may  be  maintained  to  wind  up  the  affairs  of  the 
old  company  and  compel  the  distribution  of  the  fund  among- 
those  for  whose  benefit  it  was  created.  ^°''' 

"*  Stamin  v.  Northwestern  Mut.  Ben.  Ass'n,  65  Mich.  317,  32  N.  W. 
710;  People  v.  Empire  Mut.  Life  Ins.  Co.,  92  N.  Y.  108;  Cahen  v.  Con- 
tinental Life  Ins.  Co.,  69  N.  Y.  300;  Insurance  Com'r  v.  Provident  Aid 
Soc.,  89  Me.  413,  36  Atl.  627;  Smith  v.  Hunterdon  County  Mutt.  Ins. 
Co.,  41  N.  J,  Eq.  473.  See,  also,  as  to  management  and  disposition 
of  funds,  Greff  v.  Equitable  Life  Assur.  Soc,  160  N.  Y.  19,  46  L.  R.  A. 
288;  McKean  v.  Biddle,  181  Pa.  St.  361;  Fry  v.  Provident  Sav.  Life 
Assur.  Soc.  (Tenn.  Ch.  App.),  38  S.  W.  116,  and  cases  supra. 


CHAPTER  XX. 

PRACTICE  AND  PROCEDURE. 

§  252.  Practice  and  procedure  in  litigation  involving  insur- 
ance contracts  is  subject  to  the  law  and  practice  of  the  foriim 
in  which  the  action  is  pending. 

The  practice,  pleadings,  forms,  and  modes  of  procedure  in 
actions  upon  contracts  of  insurance,  must  conform  to  that 
existing  in  the  courts  of  record  of  the  state  within  whicli 
such  actions  are  brought.  A  contract  will,  in  the  absence  of 
any  stipulations  to  the  contrary,  be  construed  with  reference 
to  its  validity  and  meaning  by  the  law  of  the  place  where  it 
is  made ;  but  the  remedy  for  its  enforcement  must  conform  to 
the  law,  practice  and  procedure  of  the  court  enforcing  it.^ 

Jurisdiction  of  Courts. 

The  general  rule  is  that  stipulations  providing  for  the  de- 
termination of  the  rights  of  the  parties  to  a  contract  by  non- 
judicial tribunals  are  void,  as  being  an  attempt  to  oust  the 
courts  of  their  proper  jurisdiction.  But  agreements  for  arbi- 
tration concerning  collateral  matters,  as  the  amount  of  a  lia- 
bility, are  valid. ^  The  right  to  full  resort  to  the  courts  will 
not  be  deemed  to  be  taken  away  by  inference,  but  only  by  un- 
equivocal agreements,  stated  in  the  clearest  and  most  explicit 
terms.^     An  agreement  not  to  sue  except  in  the  courts  of  the 

^Nederland  Life  Ins.  Co.  v.  Hall   (C.  C.  A.),  84  Fed.  278. 

"Ante,  c.  15,  Arbitration  and  Award. 

"  Supreme  Lodge,  O.  S.  F.,  v.  Raymond,  57  Kan.  647,  49  L.  R.  A. 
373;  Grimbley  v.  Harrold,  125  Cal.  24,  57  Pac.  558.  See.  also,  Loeffler 
V.  Modern  Woodmen  of  America,  100  Wis.  79,  75  N.  W.  1012. 


760  PRACTICE    AND    PROCEDURE.  §  252 

state  in  Avliicli  the  insurer  is  located,  is  void.^  Tlie  appoint- 
ment of  an  agent,  upon  whom  service  of  summons  can  be  made 
within  the  state,  subjects  a  non-resident  principal  to  the  jur- 
isdiction of  the  courts  of  the  state,  the  same  as  if  he  were  a 
resident.^  Statutes  providing  that,  in  suits  or  proceedings  in 
wdiich  a  foreign  corporation  shall  be  a  party,  if  such  corpora- 
tion shall  make  application  to  remove  any  such  suit  into  a  fed- 
eral court  it  shall  be  liable  to  certain  penalties,  and  statutes 
which  attempt  to  restrict  the  right  of  corporations  to  transfer 
cases  from  state  to  federal  courts,  where  they  would  other- 
wise be  entitled  to  do  so,  are  void.^ 

Limitations  on  Time  to  Sue. 

The  time  within  which  suits  upon  a  eontract  must  be 
brought  may  be  limited  by  agreement  between  the  parties." 
But  such  a  limitation  does  not  govern  the  time  to  bring  suit 
upon  an  agreement  to  pay  a  loss.^  That  an  action  was  begun 
within  the  stipulated  time  need  not  be  set  forth  in  the  com- 
plaint. The  stipulation  is  for  the  benefit  of  the  insurer,  by 
whom  it  may  be  asserted  or  waived.^     A  defendant  is  not  es- 

^Reichard  v.  Manhattan  Life  Ins.  Co.,  31  Mo.  518.  Compare 
Rodgers  v.  Mutual  Endowment  Assessment  Life  Ass'n,  17  S.  C.  40G. 

'Lafayette  Ins.  Co.  v.  French,  18  How.  (U.  S.)  404;  Runkle  v.  La- 
mar Ins.  Co.,  2  Fed.  9;  Ex  parte  Schollenberger,  96  U.  S.  369.  But  the 
appointment  of  an  agent  to  acknowledge  service  does  not  prevent 
the  corporation  from  pleading  want  of  jurisdiction  of  the  court,  on 
the  ground  that  the  subject-matter  of  the  suit  or  the  remedy  sought 
is  beyond  the  reach  of  the  court.  Taylor  v.  Mutual  Reserve  Fund 
Life  Ass'n,  97  Va.  60,  45  L.  R.  A.  621. 

"Home  Ins.  Co.  v.  Morse,  20  Wall.  (U.  S.)  445;  Doyle  v.  Conti- 
nental Ins.  Co.,  94  U.  S.  535;  Chicago,  M.  &  St.  P.  Ry.  Co.  v.  Becker, 
32  Fed.  849. 

•  Riddlesbarger  v.  Hartford  Ins.  Co.,  7  Wall.  (U.  S.)  386.  See, 
ante,  p.  423,  Terms  and  Conditions  of  Contract. 

*  Smith  v.  Glens  Falls  Ins.  Co.,  62  N.  Y.  85. 

'Fred  Miller  Brewing  Co.  v.  Capital  Ins.  Co.,  Ill  Iowa,  590,  82 
N.  W.  1023. 


^  252  LIMITATIONS    ON    TIME   TO    SUE.  761 

topped  from  claiming  tlie  benefit  of  the  statute  by  the  fact 
that  the  time  for  bringing  the  action,  as  limited  by  the  policy, 
has  expired,  so  that  a  new  action  cannot  be  brought  ;^°  nor 
by  the  fact  of  the  absence  from  the  state  of  the  officers  and 
agents  upon  whom  ser^dce  can  be  made."  In  Pennsylvania 
it  is  held  tliat  an  action  on  a  policy  of  insurance,  requiring 
suit  to  be  brought  within  a  year,  is  brought  in  time  if  the 
■original  summons  is  issued  within  a  year,  though  it  is  after- 
wards set  aside  and  an  alias  summons  issued  after  the  expira- 
tion of  the  year.^^  A¥here  an  action  is  instituted  within 
the  time  limited,  an  amendment  of  the  pleading,  substituting 
.a  new  party  to  represent  the  same  right  of  recovery  as  per- 
mitted by  statute,  does  not  operate  as  a  discontinuance  of  the 
suit,  and  the  bringing  of  a  new  action.  But  a  new  cause  of 
action  cannot  be  substituted  by  amendment.  The  line  is 
drawn  between  the  amendment  to  the  cause  of  action  which 
is  already  the  subject  of  the  suit,  and  the  substitution  of  a 
new  cause  of  action  by  amendment. -^^  In  Texas  it  is  held  that 
even  where  the  making  of  proof  of  loss  is  a  condition  preced- 
■ent  to  the  right  of  action,  a  process  of  garnishment  is  not  pre- 
mature when  seiwed  on  an  insurer  before  proofs  of  loss  are 
iurnished  it.^'*  But  this  is  doubtful  law.  The  creditor  can 
have  no  greater  rights  than  his  debtor,  and  cannot  properly 
Teach  the  debt  as  long  as  it  is  contingent,  nor  until  it  has 

"Vore  V.  Hawkeye  Ins.  Co.,  76  Iowa,  548. 

"  Guthrie  v.  Connecticut  Ind.  Ass'n,  101  Tenn.  643,  49  S.  W.  829. 

^=  Everett  v.  Niagara  Ins.  Co.,  142  Pa.  St.  322,  21  Atl.  817. 

"Fidelity  &  Casualty  Co.  v.  Freeman  (C.  C.  A.)  109  Fed.  847, 
Randolph  v.  Barrett,  16  Pet.  (U.  S.)  138  An  amendement  by  which- 
the  cause  is  changed  from  the  law  to  the  equity  jurisdiction  of  the 
■court  continues  the  original  cause  of  action.  Newman  v.  Covenant 
Mut.  Ins.  Ass'n,  76  Iowa.  56,  1  L.  R.  A.  659. 

"Phenix  Ins.  Co.  v.  Willis,  70  Tex.  12. 


762  PRACTICE  AND  PKOCEDUKE.  §  252: 

become  a  monejed  demand,  enforceable  by  the  debtor  him- 
self. ^^ 

Form  and  Nature  of  Action. 

A  court  of  equity  may  reform  a  contract  of  insurance,  and 
at  the  same  time  enforce  it  as  reformed  and  administer  full 
relief  by  decree  of  payment  of  loss  when  the  evidence  of  the 
extent  is  satisfactory.^*^  And  a  cause  of  action  in  equity  for 
specific  performance  of  a  contract  to  issue  a  policy  may  be 
joined  with  suit  on  the  agreement  for  insurance,  where  a 
loss  occurs  before  the  policy  is  issued. ^'^  A  party  to  a  con- 
tract which  does  not  correctly  represent  the  oral  agTeement 
made,  cannot  abandon  it,  and  sue  on  the  oral  agreement,  but 
recourse  must  be  had  to  equity  to  rescind  or  reform  it  on  the- 
ground  of  fraud  or  mistake. -^^  In  an  action  upon  a  policy 
without  allegation  of  fraud  or  mistake,  evidence  cannot  be- 
received  that  a  clause  was  inserted  in  the  policy  different 
from  that  agreed  upon.^^  But  in  Indiana  it  is  held  that  if  a 
misdescription  of  the  location  'of  the  property  insured  be 
written  in  the  policy,  without  the  knowledge  or  consent  of  tho 
applicant,  this  may  be  alleged  and  proved  in  an  ordinary  ac- 
tion at  law.^°  A  contrary  rule  obtains  in  New  York.^^  And 
in  Wisconsin  it  is  held  that  where  the  insurer  waives  a  con- 
dition against  encumbrances  by  issuing  a  policy  with  knowl- 

"  Hurst  V.  Home  Protection  Fire  Ins.  Co.,  81  Ala.  174;  German 
American  Ins.  Co.  v.  Hocking,  115  Pa.  St.  398. 

"Maryland  Home  Fire  Ins.  Co.  v.  Kimmel.  89  Md.  437,  43  Atl. 
764.     See  c.  3. 

"Preferred  Ace.  Ins.  Co.  v.  Stone,  61  Kan.  48,  58  Pac.  986.  Com- 
pare Fidelity  &  Casualty  Co.  v.  Ballard  &  Ballard  Co.,  20  Ky.  Law 
Rep.  1169,  48  S.  W.  1074.     See  ante,  c.  3. 

'^Kleis  V.  Niagara  Fire  Ins.  Co.,  117  Mich.  469,  76  N.  W.  155. 

"O'Donnell  v.  Connecticut  Fire  Ins.  Co.,  73  Mich.  1,  41  N.  W.  95.. 

=»  Phenix  Ins.  Co.  v.  Allen,  109  Ind.  273,  10  N.  E.  85. 

"  Sanders  v.  Cooper,  115  N,  Y.  279,  22  N.  E.  212. 


I  252  FOKM    AND   NATURE    OF    ACTION.  763 

edge  of  the  facts,  the  insured  may  recover  on  the  policy  with- 
out having  it  reformed  so  as  to  express  the  consent  to  encum- 
brances which  the  company  agreed  to  endorse  upon  the 
policy.  ^^ 

There  has  been  much  question  as  to  whether  a  suit  upon 
a  mutual  benefit  certificate  should  be  at  law  or  in  equity. 
The  distinction  is  clear  between  an  agreement  to  pay  a  specific 
sum,  and  an  agi-eement  to  pay  the  proceeds  of  an  assessment. 
Upon  principle  is  would  seem  that  much  depends  upon  the 
wording  of  the  contract,  and  the  provision  made  for  payment 
of  the  benefit.  If  the  right  of  the  payee  is  solely  to  receive 
the  proceeds  of  an  assessment,  and  the  validity  of  the  claim 
is  in  question,  it  is  but  just  to  all  that  the  right  of  recovery 
should  be  primarily  determined.  Until  that  is  done  an  assess- 
ment cannot  properly  be  made  to  pay  the  claim,  and  until  the 
assessment  is  levied  and  paid  it  is  impossible  to  know  how 
much  will  be  realized  therefrom. ^^  There  are  decisions  to 
the  effect  that  a  bill  in  equity  should  be  maintained  to  enforce 
payment  of  such  certificates  by  compelling  a  specific  perform- 
ance of  similar  contracts,  through  assessments  as  stipulated.^'* 
But  the  authorities  are  numerous,  and  of  high  character,  that 
the  association  is  liable  to  suit  for  a  breach  of  contract  when 
it  refuses  to  make  the  required  assassment,  the  measure  of 
damages  being  the  amount  assessable  upon  all  insured,  unless 
the  defendant  alleges  in  its  answer  and  by  proofs  estal^lishes 
the  fact  that  it  should  be  less.^^     It  has  also  been  held  that 

"  Hobkirk  v.  Phoenix  Ins.  Co.,  102  Wis.  13,  78  N.  W.  160. 

=^' Rainsbarger  v.  Union  Mut.  Aid  Ass'n,  72  Iowa,  191,  33  N.  W.  626;. 
Bailey  v.  Mutual  Ben.  Ass'n,  71  Iowa,  689,  27  N.  W.  770;  Neskern 
V.  Northwestern  E.  &  L.  Ass'n,  30  Minn.  406. 

=*  Covenant  Mut.  Ben.  Ass'n  v.  Sears,  114  111.  108;  Smith  v.  Cove- 
nant Mut.  Ben.  Ass'n,  24  Fed.  685 ;  Tobin  v.  Western  Mut.  Aid  Soc, 
72  Iowa,  261;  Van  Houten  v.  Pine,  36  N.  J.  Eq.  133 

"Bentz   V.  Northwestern  Aid  Ass'n,  40  Minn.  202;    Elkhart  Mut. 


76-±  PKACTICE    AND    PROCEDURE.  §  252 

maudaniiis  is  not  a  proj)er  remedy  to  compel  such  assess- 
ment. ^^ 

Parties  to  Action. 

The  determination  of  the  proper  parties  to  an  action  upon 
an  insurance  policy  must  be  largely  governed  by  the  law  and 
practice  of  the  forum  regulating  suits  upon  ordinary  con- 
tracts. The  policy  itself  designates  the  party  to  whom  the 
proceeds  are  primarily  payable,  and  a  suit  upon  a  policy 
must,  as  a  general  rule,  except  where  otherwise  provided  by 
statute,  be  brought  by  the  one  designated  in  the  contract  as  thd 
payee,  or  his  privies.  In  fraternal  and  mutual  benefit  or- 
ganizations, a  right  of  action  is  sometimes  given  by  the  arti- 
cles of  incor|X)ration  or  by-laws  of  the  society  to  those  who 
would  not  otherwise  be  parties  to  the  contract.-'^  The  right  to 
the  proceeds  of  the  policy  has  been  dealt  with  elsewhere.^^ 

Aid,  Benev.  &  Relief  Ass'n  v.  Houghton,  103  Ind.  286;  Earnshaw  v. 
Sun  Mut.  Aid  See,  68  Md.  465. 

'"  Burland  v.  Northwestern  Mut.  Ben.  Ass'n,  47  Mich.  424;  Ex- 
celsior Mut.  Aid  Ass'n  v.  Riddle,  91  Ind.  84.  But  see  Van  Houten  v. 
Pine,  36  N.  J.  Eq.  133;  Bailey  v.  Mutual  Ben.  Ass'n,  71  Iowa,  689; 
Tobin  V.  Western  Mut.  Aid  Soc,  72  Iowa,  261;  Newman  v.  Covenant 
Mut.  Ins.  Ass'n,  76  Iowa,  56,  40  N.  W.  87;  Hart  v.  National  Masonic 
Ace.  Ass'n,  105  Iowa,  717,  75  N.  W.  508;  Theunen  v.  Iowa  Mut.  Ben. 
Ass'n,  101  Iowa,  558,  70  N.  W.  712.  Compare  Follis  v.  United  States 
Mut.  Ace.  Ass'n,  94  Iowa,  435,  28  L.  R.  A.  78. 

-'Ward  V.  Wood,  13  Mass.  539;  United  States  Life  Ins.  Co.  v. 
Ludwig,  103  111.  305;  Bates  v.  Equitable  Ins.  Co.,  10  Wall.  (U.  S.) 
S3;  Fairchild  v.  Northwestern  Mut.  Life  Ass'n,  51  Vt.  613;  Rosen- 
berger  v.  Washington  Mut.  Fire  Ins.  Co.,  87  Pa.  St.  207. 

A  firm  composed  of  several  cannot  recover  upon  a  policy  issued 
to  one  of  them.  Burgher  v.  Columbian  Ins.  Co.,  17  Barb.  ( N.  Y.)  274. 
Where  a  policy  provides  for  the  payment  of  different  sums  to  dif- 
ferent parties,  the  beneficiaries  should  maintain  separate  actions 
to  recover  the  several  sums  due.  Keary  v.  Mutual  Reserve  Fund 
Life  Ass'n,  30  Fed.  359.  The  remedy  of  one  entitled  to  the  pro- 
ceeds of  a  policy  of  insurance  is  not  against  the  party  to  whom  the 
insurer  has  paid  it,  but  against  the  insurer  directly.  Shultz  v.  Boyd, 
152  Ind.  166,   52  N.  E.  750. 

^'  See  ante,  c.  4,  Payment  of  the  Proceeds. 


g  252  PARTIES    TO    ACTION.  765 

A  creditor,  to  wliom  a  policy  has  been  assigned  as  collateral 
security  for  a  debt,  may  maintain  an  action  in  bis  own  name, 
and  recover  the  full  face  value  of  the  policy,  though  a  portion 
of  the  debt  is  not  due  at  the  time  of  bringing  suit.^^  But  an 
assignee  who  has  no  insurable  interest  in  the  life  of  the  de- 
ceased, and  who  could  not  have  taken  out  a  policy  in  his  own 
name,  cannot  maintain  an  action.^*'  Where  the  policy  is  is- 
sued to  the  mortgagor  to  cover  his  interest  alone,  the  action 
must  be  brought  in  his  name.^^  And  so  if  the  loss  be  payable 
to  a  mortgagee  whose  debt  has  been  paid.^^  The  mortgagee 
may  sue  alone,  and  in  his  own  name,  where  the  loss,  if  any, 
is  payable  to  him  as  his  interest  may  appear,  when  his  interest 
equals  or  exceeds  the  full  amount  due  under  the  policy. 
When  his  interest  is  less,  both  insured  and  mortgagee  should 
be  joined  as  parties.^^  A  mortgagee  may  maintain  an  action 
in  his  own  name,  on  a  Massachusetts  Standard  policy,  pro- 
cured by  the  mortgagor  pursuant  to  a  covenant  to  keep  the 
premises  insured  for  the  benefit  of  the  mortgagee,  payable  to- 
the  mortgagee  as  his  interest  might  appear,  and  providing  that 
no  act  or  default  of  any  person  other  than  such  mortgage,  or 
those  claiming  under  him,  shall  affect  the  mortgagee's  right 
to  recover  in  case  of  loss.^^ 


^"Hale  V.  Life  Ind.  &  Inv.  Co.,  65  Minn.  548. 

"'Warnock  v.  Davis,  104  U.  S.  775.  See,  also,  ante,  c.  9,  Insur- 
able Interest. 

^'Flanagan  v.  Camden  Miit.  Ins.  Co.,  25  N.  J.  Law,  506;  Columbia 
Ins.  Co.  V.  Lawrence,  10  Pet.   (U.  S.)   507. 

'-Coates  V  Pennsylvania  Fire  Ins.  Co.,  58  Md.  172,  42  Am.  Rep. 
327. 

^^Maxcy  v.  New  Hampshire  Fire  Ins.  Co..  54  Minn.  272;  Lowry  v. 
Insurance  Co.  of  North  America,  75  Miss.  43,  21  So.  664,  37  L.  R.  A. 
779;  Bartlett  v.  Iowa  State  Ins.  Co.,  77  Iowa,  86,  41  N.  W.  579. 

"  Palmer  Sav.  Bank  v.  Insurance  Co.  of  North  America,  166  Mass. 
189,  44  N.  E.  211.     See  Whiting  v.  Burkhardt  (Mass.),  60  N.  E.  1. 


'7GG  rKACTICE    AND    PKOCEDUKE.  ^  252 

The  Complaint. 

In  declaring  upon  a  contract  of  insurance  tlie  pleader  must 
bring  himself  within  its  terms,  and  show  a  loss  from  a  cause 
and  under  circumstances  which  by  the  terms  of  the  contract 
create  a  liability  in  favor  of  the  plaintiff,  and  against  the  de- 
fendant. He  must  allege  every  fact  which  he  is  required  to 
prove,  and  will  be  precluded  from  proving  any  fact  not  al- 
leged. He  must  show  the  making  of  the  contract  by  the 
insurer,  and  that  thereby  the  insurer  obligated  itself  to  pro- 
tect him  or  his  privies  against  specified  perils  in  respect  to 
certain  property  to  a  given  amount,  or  to  pay  a  certain  sum 
upon  the  happening  of  a  specified  event,  and  that  the  event 
has  happened,  or  the  loss  has  occurred,  while  the  policy  was  in 
force,  and  within  its  terms  and  conditions. ^^  A  complaint 
on  a  fire  insurance  policy  must  show  that  the  property  de- 
stroyed was  at  the  time  of  the  loss  Avithin  the  location  de- 
scribed in  the  policy  ;^^  and  that  the  insured  was  at  the  time 
of  the  loss  the  owner  of  the  property,  or  had  an  insurable  in- 
terest in  it;^'  and  that  the  property  was  at  the  time  of  the 
loss  used  for  the  purposes  designated  in  the  policy  ;^^  that  the 
peril  which  the  policy  was  issued  to  protect  against  was  the 
proximate,  and  not  the  remote  cause  of  the  loss  f^  that  dam- 
age was  thereby  done  in  respect  to  the  interest  insured  ;^^ 
and  that  the  assured  has  performed  all  the  conditions  pre- 
cedent required  by  the  policy  to  be  performed. ^^ 

»» Green  v.  Palmer,  15  Cal.  412;  Allen  v.  Home  Ins.  Co.  (Cal.),  30 
Ins.  Law  J.  711,  65  Pac.  138. 

'"Todd  V.  Germania  Fire  Ins.  Co.,  1  Mo.  App.  472;  Phenix  Ins.  Co. 
V.  Allen,  109  Ind.  273,  10  N.  E.  85. 

""  Farmers'  Ins.  Co.  v.  Burris,  23  Ind.  App.  507,  55  N.  E.  773;  Gus- 
tin  V.  Concordia  Fire  Ins.  Co.  (Mo.),  64  S.  W.  178. 

^ Allen  V.  Home  Ins.  Co.  (Cal.),  30  Ins.  Law  J.  711,  65  Pac.  138. 

'"Mutual  Life  Ins.  Co.  v.  Stibbe,  46  Md.  302;  Aetna  Fire  Ins.  Co. 
V.  Boon,  95  U.  S.  117. 

^  Standard  Fire  Ins.  Co.  v.  Wren,  11  111.  App.   242. 

*i  Phenix  Ins.  Co.  v.  Pickel,  119  Ind.  155,  21  N.  E.  546. 


•§  252  THE    COMPLAINT.     -  767 

Thus,  if  the  furnishing  of  proofs  of  loss  by  the  insured,  is  a 
condition  precedent  to  the  bringing'of  action,  performance,  or 
waiver  of  performance  must  be  shown.  "^^  Value  in  the  prop- 
erty destroyed,  and  damage  with  respect  to  the  insurable  in- 
terest of  the  insured,  must  always  be  alleged.^^ 

Where,  by  the  terms  of  the  policy,  which  is  set  forth,  an 
-arbitration  and  award,  in  case  of  difference  in  regard  to  the 
amount  of  loss,  is  a  condition  precedent  to  the  right  of  action, 
and  it  affirmatively  appears  from  the  complaint  that  a  dispute 
has  arisen  which  calls  for  an  appraisal  and  award,  a  general 
allegation  that  the  plaintiff  has  complied  with  all  the  teiins 
and  performed  all  the  conditions  precedent  in  the  policy  re- 
quired of  him,  is  insufficient.  There  should  be  a  statement 
that  appraisers  had  been  selected,  and  an  award  made,  or  an 
allegation  of  facts  which  would  relieve  the  insured  from  sub- 
mitting to  an  appraisal  and  award,  or  excuse  him  from  being 
bound  by  the  provisions  of  the  policy  in  that  respect.'*^  In 
a  complaint  upon  an  accident  policy  the  complaint  must  show 
that  the  injury  was  of  the  nature  insured  against. ^^  A 
policy  need  not  be  tendered  to  the  insurer  before  commenc- 
ing an  action  thereon.'*^  A  complaint  based  upon  a  life  in- 
surance policy,  must  bring  the  case  within  its  limits  and  con- 
ditions. But  where  the  circumstances  are  specifically  set 
forth,  an  averment  that  plaintiff  liad  performed  all  the  terms 
and  conditions  upon  his  part  required,  is  sufficient.'*'^    Where 

«  State  Ins.  Co.  v.  Belford,  2  Kan.  App.  280,  42  Pac.  409,  25  Ins. 
Law  J.  127;  Excelsior  Mut.  Aid  Ass'n  v.  Riddle,  91  Ind.  84;  Home 
Ins.  Co.  V.  Duke,  43  Ind.  418. 

"German-American  Ins.  Co.  v.  Paul  (Ind.  T.),  53  S.  W.  442. 

**  Mosness  v.  German-American  Ins.  Co.,  50  Minn.  341. 

^^  Taylor  v.  Pacific  Mut.  Life  Ins.  Co.,  110  Iowa,  621,  82  N.  W.  326; 
Whitlatch  v.  Fidelity  &  Casualty  Co.,  149  N.  Y.  45,  43  N.  E.  405. 

*^  Stephenson  v.  Bankers'  Life  Ass'n,  108  Iowa,  637,  79  N.  W.  459. 

^'National  Ben.  Ass'n  v.  Bowman,  110  Ind.  355. 


768  PKACTICE  AND  PROCEDURE.  §  252 

a  life  policy  is  conditioned  to  be  pa^-able  to  an  assignee,  only 
on  proof  of  an  insurable  interest,  the  fact  and  nature  of  such 
interest  must  be  averred.'*^  And  it  would  seem  that  an  aver- 
ment of  insurable  interest  upon  the  life,  in  favor  of  the 
party  procuring  the  insurance,  is  always  necessary.*** 

Neither  matters  of  defense,  nor  the  jDerfonnance  or  non- 
performance of  conditions  subsequent,  need  be  pleaded  by 
plaintiff.  Where  a  policy  contains  conditions  and  warranties, 
it>  is  sufficient  for  the  plaintiff  to  show  fulfillment  of  the  con- 
ditions of  recovery  which  are  made  such  by  the  policy  itself. 
He  need  not  aver  the  truth  of  statements  contained  in  the  ap- 
plication, nor  negative  prohibited  acts ;  ^^  nor  that  the  action 
was  brought  within  the  stipulated  time;  ^^  nor  the  authority 
of  the  insurer  to  do  business  in  the  state ;  ""  nor  negative  losses 
from  excepted  causes.^^ 

Where  a  company  agrees  to  make  and  deliver  a  policy 
within  a  reasonable  time,  and  nothing  as  to  the  terms  of  insur- 
ance is  left  open,  and  it  refuses  to  issue  the  policy  after  a  loss, 
it  has  been  held  that  the  com]>laint  need  not  show  compli- 
ance with  the  conditions  precedent  of  the  policy.^'*  But  in 
New  York  the  rights  of  one  whose  property  is  destroyed  after 
an  oral  contract  to  insure  it,  but  before  a  policy  is  issued,  are 
subject  to  the  provisions  of  the  standard  policy  prescribed  by 
law,  and  he  can  only  recover  by  compliance  with  the  condi- 

«  Alabama  Gold  Life  Ins.  Co.  v.  Mobile  Mut.  Ins.  Co.,  81  Ala.  329. 

^"Guardian  Mut.  Life  Ins.  Co.  v.  Hogan,  80  111.  35;  Franklin  Life 
Ins.  Co.  V.  Sefton,  53  Ind.  380;  Burton  v.  Connecticut  Mut.  Life  Ins. 
Co.,  119  Ind.  207,  12  Am.  St.  Rep.  405.  See,  also,  ante,  c.  9,  Insurable 
Interest. 

"■"  Phenix  Ins.  Co.  v.  Pickel,  119  Ind.  155,  21  N.  E.  546. 

"Fred  Miller  Brewing  Co.  v.  Capital  Ins.  Co.,  Ill  Iowa,  590,  82 
N.  W.  1023. 

==  Fidelity  &  Casualty  Co.  v.  Eickhoff,  63  Minn.  170. 

^^  Schrepfer  v.  Rockford  Ins.  Co.,  77  Minn.  291,  79  N.  W.  1005. 

"Western  Assur.  Co.  v.  MacAlpin,  23  Ind.  App.  220,  55  N.  E.  119. 


§  252  AMENDMENT  —  THE  ANSWER.  769 

tions  required  by  the  policy,  and  what  must  he  proved  must 
be  alleged.^^ 

Amendment. 

A  complaint  may  be  amended  so  as  to  continue  or  reassert 
the  cause  of  action  originally  set  forth,  but  not  so  as  to  substi- 
tute a  new  cause  of  action.^^ 

The  Answer. 

The  burden  is  upon  the  insurer  to  plead  and  prove  breaches 
of  warranty  or  misrepresentations,  and  he  must,  in  his  plead- 
ing, single  out  the  answers  whose  truth  he  proposes  to  con- 
test, and  show  the  facts  upon  which  his  contention  is 
founded.^ '^  Where  the  defense  of  violation  of  law  is  in- 
sisted upon,  it  must  be  pleaded  by  defendant,  who  must  also 
set  forth  in  what  the  violation  consisted.^^  The  insurer  must 
plead  any  violation  of  conditions  of  the  policy  upon  which 
it  relies  in  its  defense;  ^^  and  any  failure  to  comply  with  con- 
ditions subsequent  or  precedent ;  ^^  and  the  existence  of  other 
insurance,  contrary  to  the  terms  of  the  policy,  or  which 
lessens  liability;®-^  or  forfeitures;^^  and  a  want  of  insur- 

"  Hicks  v,  British  America  Assur.  Co.,  162  N.  Y.  284,  48  L.  R.  A. 
424. 

=»  Fidelity  &  Casualty  Co.  v.  Freeman  (C.  C.  A.),  109  Fed.  847, 
See,  ante,  notes  12-15. 

"Chambers  v.  Northwestern  Mut.  Life  Ins.  Co.,  64  Minn.  495; 
Phenix  Ins.  Co.  v.  Pickel,  119  Ind.  155,  21  N.  E.  546.  See,  as  to  an- 
swers in  insui*ance  suits,  44  Cent.  Law  J.  407. 

'^^  Conboy  v.  Railway  Officials'  and  Employees'  Ace.  Ass'n  (Ind. 
App.),  43  N.  E.  1017. 

""  Moody  V.  Amazon  Ins.  Co.,  52  Ohio  St.  12,  26  L.  R.  A.  313. 

'"Moody  V.  Amazon  Ins.  Co.,  52  Ohio  St.  12,  26  L.  R.  A.  313. 

"i  Aetna  Ins.  Co.  v.  McLead,  57  Kan.  95,  45  Pac.  73,  25  Ins.  Law  J. 
669. 

"Guerin  v.  St.  Paul  F.  &  M.  Ins.  Co.,  44  Minn.  20;  Ft.  Wayne  Ins. 
Co.  V.  Irwin,  23  Ind.  App.  53,  54  N.  E.  818. 

KERR,  INS.— 49 


770  PEACTICE    AND    PKOCEDURE.  §  252 

able  interest  in  tlie  plaintiff ;  ^^  and  that  tlie  plaintiff  could 
have  saved  destroyed  property  by  the  exercise  of  reasonable 
care;^^  and  that  the  action  was  not  commenced  within  the 
time  stipulated  in  the  policy ;  ^^  and  that  the  loss  was  oc- 
casioned through  the  excepted  causes.®^  It  must  specify  the 
violation,  or  non-performance  of  conditions,  and  plainly  state 
the  conditions  and  breaches  relied  on ;  ^"^  and  upon  trial  con- 
fine itself  to  those  specified.  If  fraud  is  relied  on,  the  facts 
constituting  fraud  should  be  stated.^^  Or  if  the  defense  is 
that  the  property  was  destroyed  by  the  insured,  that  must  be 
pleaded.^^  A  plea  that  the  conditions  of  the  policy  had  been 
violated  by  the  property  becoming  encumbered,  should  show 
that  thiF-  was  done  without  the  assent  of  the  insurer J^ 

Reply. 

The  reply  can  assist,  but  must  not  quit  or  depart  from  the 
case  made  in  the  complaint. ''^^  But  it  has  been  held  where 
defendant  denies  the  execution  of  a  policy  sued  upon,  and  the 
authority  of  the  agent  to  issue  it,  that  the  reply  may  set  up 
the  custom  of  the  agent  to  accept  similar  risks,  without  tb'e 
knowledge  of  the  insurer,  and  a  subsequent  ratification  of  the 
agent's  act.'''^ 

«' Supreme  Lodge,  K.  of  H.,  t.  Metcalf,  15  Ind.  App.  135,  43  N.  E. 
893. 

^*  Davis  V.  Anchor  Mut.  Fire  Ins.  Co.,  96  Iowa,  70,  64  N.  W.  687. 

"^Fred  Miller  Brewing  Co.  v.  Capital  Ins.  Co.,  Ill  Iowa,  590,  82 
N.  W.  1023;  Moore  v.  Phoenix  Fire  Ins.^Co.,  64  N.  H.  140. 

""  Schrepfer  v.  Rockford  Ins.  Co.,  77  Minn.  291,  79  N.  W.  1005. 

"^Chambers  v.  Northwestern  Mut.  Life  Ins.  Co.,  64  Minn.  495; 
Evarts  v.  United  States  Mut.  Ace.  Ass'n,  61  Hun,  624,  16  N.  Y. 
Supp.  27. 

"  Sterling  v.  Mercantile  Mut.  Ins.  Co.,  32  Pa.  St.  75. 

»"  Kahnweiler  v.  Phenix  Ins.  Co.   (C.  C.  A.),  67  Fed.  483. 

'"  Peoria  M.  &  F.  Ins.  Co.  v.  Lewis,  18  111.  553. 

"  Mosness  v.  German-American  Ins.  Co.,  50  Minn.  341.  See,  also. 
Sun  Fire  Office  v.  Fraser,  5  Kan.  App.  63,  47  Pac.  327. 

^^  German  Fire  Ins.  Co.  v.  Columbia  Encaustic  Tile  Co.,  15  Ind. 
App.  623,  43  N.  E.  41. 


§  252  WAIVER  —  EVIDENCE.  771 

Waiver. 

Waiver  must  be  specially  pleaded.  It  cannot  be  shown 
under  a  plea  of  performance.'^^  But  both  waiver  and  com- 
pliance may  be  pleaded  and  shown. '^* 

Evidence. 

It  is  a  well  settled  rule  of  law  that  he  who  must  affirm 
must  prove,  and  that  the  burden  of  proving  a  loss  from  a 
cause,  and  under  circumstances,  and  to  an  amount  which 
creates  a  liability  assumed  by  the  insurer  is  upon  the  in- 
sured,'^ and  the  proof  must  come  within  the  scope  of,  and  cor- 
respond to  the  averment. "^^  No  rule  of  law  is  more  firmly  es- 
tablished than  the  one  which  declares  that  a  parol  agree- 
ment is  merged  into  and  superseded  by  a  subsequent  written 
agreement  embracing  the  same  subject  matter.  It  is  equally 
well  settled  and  a  general  rule  that  parol  evidence  is  inad- 
missible either  to  vary  or  contradict  a  written  instniment.^" 

The  subject  of  the  insurance  is  to  be  ascertained  from  the 
description  in  the  policy,  and  such  extrinsic  evidence  as  may 
be  necessary  to  identify  the  property  described.  But  extrinsic 
evidence  which  goes  beyond  the  pui-pose  of  aiding  in  the  in- 
terpretation of  the  written  contract,  and  tends  to  show  that 
the  subject,  or  any  condition  thereof,  was  other  and  different 
from  that  described  in  the  written  instrument, — as,  for  ex- 

"  Mosness  v.  German  American  Ins.  Co.,  50  Minn.  341;  Ft.  Wayne 
Ins.  Co.  V.  Irwin,  23  Ind.  App.  53,  54  N.  E.  818;  Continental  Ins. 
Co.  V.  Vanlue,  126  Ind.  410,  26  N.  B.  119;  Guerin  v.  St.  Paul  F.  &  M. 
Ins.  Co.,  44  Minn.  20. 

'*  Stephenson  v.  Bankers'  Life  Ass'n,  108  Iowa,  637,  79  N.  W.  459. 

"Cory  V.  Boylston  F.  &  M.  Ins.  Co.,  107  Mass.  140,  9  Am.  Rep.  20; 
Allen  V.  Home  Ins.  Co.  (Cal.),  30  Ins.  Law  J.  711,  65  Pac.  138;  Taylor 
V.  Pacific  Milt.  Life  Ins.  Co.,  110  Iowa,  621,  82  N.  W.  326. 

^O'Donnell  v.  Connecticut  Fire  Ins.  Co.,  73  Mich.  1,  41  N.  W.  95; 
Coryeon  v.  Providence-Wash.  Ins.  Co.,  79  Mich.  187. 

"  Phenix  Ins.  Co.  v.  Allen,  109  Ind.  273,  10  N.  E.  85, 


772  PRACTICE  AND  PEOCEDURE.  §  252 

ample,  tliat  the  building  intended  to  be  insured  was  not  tbe 
building  actually  covered  by  the  policy, — while  it  might  tend 
to  establish  a  case  for  the  reformation  of  the  contract,  would 
be  inadmissible  to  sustain  an  action  to  enforce  the  written 
contract,  as  though  it  applied  to  the  building  intended  to  bo 
covered,  but  not  described  in  the  policy. "^^ 

Parol  evidence  can  only  be  received  when  an  ambiguity 
exists,  and  never  when  the  terms  of  the  contract  are  plain 
and  imambiguous.  The  writing  itself  is  the  best  evidence  of 
the  intent  and  meaning.  If  the  meaning  be  ambiguous,  evi- 
dence may  be  received  to  place  the  court  in  the  position  of  the 
parties,  and  enable  it  to  appreciate  the  force  of  the  words  they 
used  in  reducing  the  contract  to  writing.  It  then  becomes 
the  duty  of  the  court,  sitting  without  a  jury,  to  decide  what 
the  parties,  thus  situated,  meant  by  the  language  used.  But 
one  party  to  a  written  contract  cannot  state  how  he  under- 
stood it  when  he  signed  it,  nor  testify  as  to  its  meaning  or  his 
intent.  What  the  parties  intend  must  be  gathered  from  the 
contract,  read  in  the  light  of  the  circumstances  surrounding 
them  when  they  used  the  doubtful  words.'^^ 

The  usage  of  a  particular  business,  when  it  is  reasonable, 
uniform,  well-settled,  not  in  opposition  to  the  fixed  rules  of 
law,  nor  in  contradiction  of  the  express  terms  of  the  con- 
tract, is  deemed  to  form  a  part  of  the  contract,  and  to  enter 
into  the  intention  of  the  parties.  The  custom,  however,  must 
be  shown  to  have  been  known  to  the  parties  when  the  contract 
was  made,  or  to  have  been  so  generally  known  as  to  raise  a 
presumption  that  they  had  it  in  mind  at  that  time.     Usage 

"  Sanders  v.  Cooper,  115  N.  Y.  279,  22  N.  E.  212;  Cummins  v.  Ger- 
man-American Ins.  Co.,  197  Pa.  St.  61,  46  Atl.  902;  Baker  v.  State 
Ins.  Co.,  31  Or.  41,  27  Ins.  Law  J.  86,  48  Pac.  699. 

"Indemnity  Mut.  Marine  Assur.  Co.  v.  United  Oil  Co.,  88  Fed.  315; 
Rickerson  v.  Hartford  Fire  Ins.  Co.,  149  N.  Y.  307,  43  N.  E.  856. 


I  252  EVIDENCE.  773 

is  a  matter  of  fact,  not  of  opinion,  and  mnst  be  sIio^ati  by 
those  wbo  have  observed  the  method  of  transacting  the  par- 
ticular land  of  business,  as  conducted  by  others  and  them- 
selves. ^° 

Where  a  policy  designates  a  beneficiary  by  name,  and  states 
that  she  is  the  daughter  of  the  insured,  and  it  appears  that  he 
had  a  daughter  of  that  name,  parol  evidence  is  inadmissible 
to  show  that  the  wife  of  the  insured  had  the  same  name,  and 
was  intended  to  be  the  beneficiaiy.^^  And  the  statement  of  a 
soliciting  agent  that  a  policy  would  take  effect  at  once,  can- 
not vary  the  effect  of  a  written  application,  conditioned  that 
the  insurer  would  only  become  bound  when  it  was  received 
and  accepted  by  the  insured.'^^  j^^^t  oral  evidence  is  admis- 
sible to  show  that  a  misdescription  of  the  property  insured 
Avas  written  into  the  application,  without  the  knowledge  ov 
consent  of  the  insured ;  ^^  or  that  untrue  statements  in  the  ap- 
plication were  made  by  the  agent  of  the  insurer,  without  the 
knowledge  or  consent  of  the  applicant ;  ^'*  or  to  show  that  the 
agent  who  drew  the  application,  and  wrote  down  the  answer 
at  the  same  time,  knew  that  the  answer  was  incorrect,  where 
fraud  or  collusion  between  the  agent  and  the  applicant  does 
not  appear.^^ 

*>  Howard  v.  Great  Western  Ins.  Co.,  109  Mass.  384;  Barnard  v. 
Kellogg,  10  Wall.  (U.  S.)  383;  Chesapeake  Bank  v.  Swain,  29  Md. 
483;  Harris  v.  Tumbridge,  S3  N.  Y.  92. 

«i  Standard  Life  &  Ace.  Ins.  Co.  v.  Taylor,  12  Tex.  Civ.  App.  38G, 
34  S.  W.  781. 

*' United  States  Mut.  Ace.  Ass'n  v.  Kitturing.  22  Colo.  257,  44 
Pac.  595;  Chamberlain  v.  Prudential  Ins.  Co.   (Wis.),  85  N.  W.  128. 

*' American  Cent.  Ins.  Co.  v.  McLanathan,  11  Kan.  533;  Phoenix 
Ins.  Co.  V.  Allen,  109  Ind.  273,  10  N.  E.  85. 

"Marston  v.  Kennebec  Mut.  Life  Ins.  Co.,  89  Me.  266,  36  Atl.  389; 
North  American  Fire  Ins.  Co.  v.  Throop,  22  Mich.  146. 

*'  Patten  v.  Merchants'  &  Farmers'  Mut.  Fire  Ins.  Co.,  40  N.  H.  375; 
Sanders  v.  Cooper,  115  N.  Y.  279,  22  N.  E.  212. 


774  PRACTICE    AND    PROCEDURE.  §  252 

If  there  is  a  written  contract  wliicli  does  not  contain  the 
agreement  of  the  parties  as  actually  made,  the  insured  can- 
not sue  on  the  oral  contract,  but  must  resort  to  equity  to  re- 
scind or  reform  the  written  one.^^  In  an  action  upon  a  policy, 
the  declaration  being  in  the  ordinary  form,  without  allegation 
of  fraud  or  mistake,  evidence  cannot  be  received  to  show  that 
the  contract  is  different  from  what  it  appears  to  be.^''^  Where 
a  company  waives  a  condition  against  encumbrances,  by  issu- 
ing a  policy  with  knowledge  of  the  facts,  the  insured  may  re- 
cover on  the  policy,  without  having  it  reformed  so  as  to  ex- 
press the  assent  to  encumbrances,  which  was  agreed  to  be  en- 
dorsed upon  the  policy.  ^^ 

Parol  evidence  is  admissible  to  show  the  meaning  of  tech- 
nical words  or  phrases  or  trade  terms, ^^  where  the  meaning 
of  the  words  is  doubtful,  and  cannot  be  determined  without 
the  aid  of  extrinsic  evidence.^*^  Evidence  is  always  admis- 
sible, in  a  proper  action,  to  show  fraud  or  mistake,  entitling 
one  party  or  the  other  to  rescind  or  reform  the  contract.  But 
the  evidence  must  be  clear  and  satisfactory.^^ 

Tables  showing  the  expectancy  of  human  life  are  admis- 
sible, though  not  conclusive,  upon  the  question  of  the  dura- 

^'Kleis  V.  Niagara  Fire  Ins.  Co.,  117  Mich.  469,  76  N.  W.  155. 

"CDonnell  v.  Connecticut  Fire  Ins.  Co.,  73  Mich.  1,  41  N.  W.  95; 
Sanders  v.  Cooper,  115  N.  Y.  279,  22  N.  E.  212. 

^'Hobkirk  v.  Phoenix  Ins.  Co.,  102  Wis.  13,  78  N.  W.  160;  Phenix 
Ins.  Co.  V.  Allen.  109  Ind.  273,  10  N.  E.  85. 

'^Astor  V.  Union  Ins.  Co.,  7  Cow.  (N.  Y.)  202;  Daniels  v.  Hudson 
River  Fire  Ins.  Co.,  12  Cush.  (Mass.)  416;  Mooney  v.  Howard  Ins. 
Co.,  138  Mass.  375. 

°°  Trustees  of  First  Baptist  Church  v.  Brooklyn  Fire  Ins.  Co.,  23 
How.  Pr.  CN.  Y.)  448;  Reid  v.  Lancaster  Fire  Ins.  Co.,  90  N.  Y.  382. 

"Rickerson  v.  Hartford  Fire  Ins.  Co.,  149  N.  Y.  307,  43  N.  E.  856; 
Harrison  v.  Hartford  Fire  Ins.  Co.,  30  Fed.  862;  Harris  v.  Co- 
lumbiana County  Mut.  Ins.  Co.,  18  Ohio,  116,  51  Am.  Dec.  448. 


§  252  EVIDENCE.  775 

tion  of  life;  ^-  and  an  entry  in  the  family  bible  to  prove  tho 
date  of  birth.^^  The  verdict  of  a  coroner's  jury,  except  when 
made  so  by  the  parties  to  the  contract,  is  not,  per  se^  evidence 
of  the  cause  of  death;  ^"^  unless  furnished  to  the  insurer  in 
connection  with  proofs  of  loss,  in  which  case  it  becomes  an 
admission  in  favor  of  the  insurer,  and  against  the  claimant.^-"^ 
The  books  of  an  insured  are  admissible  to  show  the  amount 
of  his  business.^^     Offers  of  compromise  cannot  be  shown.^''' 

When  the  question  is  whether  a  person  did  a  certain  act,  his 
declarations,  oral  or  written,  made  prior  to,  and  about  the 
time  he  is  alleged  to  have  done  the  act,  to  the  effect  that  he 
intended  to  do  it,  are  admissible  as  original  evidence,  if  made 
under  circumstances  precluding  any  suspicion  of  misrepre- 
sentation.^^ So  where  in  an  action  on  a  life  insurance  policy, 
the  defense  is  fraudulent  representations  as  to  health,  the  in- 
surer may  prove  statements  and  declarations  of  the  insured, 
about  the  time  of,  and  before  and  after  the  issuing  of  the 
policy.^^ 

Where  the  policy  makes  the  application  a  part  thereof,  the 
policy  is   inadmissible  without  the   application.  ^^^      Where 

»^Vicksburg  &  M.  R.  Co.  v.  Putnam,  118  U.  S.  545;  Trott  v.  Chi- 
cago, R.  I.  &  P.  Ry.  Co.  (Iowa),  86  N.  W.  33. 

''  Union  Cent.  Life  Ins.  Co.  v.  Pollard,  94  Va.  146,  36  L.  R.  A.  271. 

"'Wasey  v.  Travelers'  Ins.  Co.  (Mich.),  85  N.  W.  459.  But  see 
United  States  Life  Ins.  Co.  v.  Vocke,  129  111.  557. 

»' Mutual  Life  Ins.  Co.  v.  Newton,  22  Wall.  (U.  S.)  32;  Sharland  v. 
Washington  Life  Ins.  Co.  (C.  C.  A.),  101  Fed.  206;  Walther  v. 
Mutual  Life  Ins.  Co.,  65  Cal.  417,    See  ante,  Proof  of  Loss. 

"'Levine  v.  Lancashire  Ins.  Co.,  66  Minn.  138;  Coleman  v.  Retail 
Lumberman's  Ins.  Ass'n,  77  Minn.  31,  79  N.  W.  588. 

°'  Strome  v.  London  Assur.  Corp.,  20  App.  Div.  571,  47  N.  Y.  Supp; 
481. 

«*  Mutual  Life  Ins.  Co.  v.  Hillmon,  145  U.  S.  285;  Hale  v.  Life  Ind. 
&  Inv.  Co.,  65  Minn.  548. 

•'Welch  V.  Union  Cent.  Life  Ins.  Co.,  108  Iowa,  224.  78  N.  W.  853. 

""  Lycoming  Mut.  Ins.  Co.  v.  Sailer,  67  Pa.  St.  lOa 


776  PKACTICE   AND   PROCEDUKE.  §  252 

the  defense  is  that  the  insured  purposely  burned  his  property, 
a  preponderance  of  evidence  establishing  the  defense  is  suffi- 
cient.-^^^  Evidence  of  the  character  of  the  insured  is  not  ad- 
missible in  a  suit  on  a  fire  insurance  policy  where  the  defense 
is  that  the  plaintiff  set  fire  to  the  building.  ^^^  But  evidence 
is  admissible  to  show  that  the  house  burned  was  in  bad  repute, 
and  had  the  reputation  of  being  a  bawdy  house.  ^°^ 

Privileged  Communication. 

The  insured  may,  in  his  application  for  insurance,  waive 
the  privilege  of  the  law  prohibiting  physicians  from  disclos- 
ing information  obtained  by  them  while  attending  him  in  a 
professional  capacity ;  and  the  waiver  is  not  in  contravention 
of  any  principle  of  public  policy.  ^°''  The  waiver  must  be 
clearly  expressed,  and  vdll  not  be  extended  by  implication.^"^ 

Death. 

A  living  man  is  presumed  to  continue  to  live  until  the  con- 
trary is  shown  or  is  presumed  from  the  circumstances  of  the 
case.  Death  may  be  shown,  either  by  direct  evidence,  or  in- 
ferentially,  and  from  circumstances  compelling  that  conclu- 
sion. The  established  presumption  of  fact  from  the  disap- 
pearance of  an  individual  under  ordinary  circumstances  from 
whom  his  relatives  and  acquaintances  have  never  afterwards 
heard,  is  that  he  continues  to  live  for  seven  years  after  his  dis- 
appearance.    This,  however,  is  only  a  presumption  of  fact, 

1"  Continental  Ins.  Co.  v.  Jachnichen,  110  Ind.  59,  10  N.  E.  63G; 
Somerset  Co.  Mut.  Fire  Ins.  Co.  v.  Usaw,  112  Pa.  St.  80,  4  Atl.  355. 
But  see  Germania  Fire  Ins.  Co.  v.  Klewer,  129  111.  599,  22  N.  E.  489. 

1"=  American  Fire  Ins.  Co.  v.  Hazen,  110  Pa.  St.  530;  Stone  v. 
Hawkeye  Ins.  Co.,  68  Iowa,  737. 

"^  Breckinridge  v.  American  Cent.  Ins.  Co.,  87  Mo.  62. 

"'  Foley  V.  Royal  Arcanum,  151  N.  Y.  196,  45  N.  E.  456;  Adreveno 
V.  Mutual  Reserve  Fund  Life  Ass'n,  34  Fed.  870. 

"=  Geare  v.  United  State?  Life  Ins.  Co.,  66  Minn.  91,  68  N.  W.  731. 


.§  252  ,      SUICIDE  —  ACCIDENTAL   INJURY.  .  777 

and  when  the  facts  from  which  it  is  drawn  are  modified  the 
presumption  and  inference  must,  and  ought  to  change, ^^^  The 
parties  can  agree  as  to,  and  make  rules  of  evidence  for  them- 
selves, as,  e.  g.,  that  disappearance  or  absence  is  not  proof  of 
death.  i<^7 

Suicide. 

The  presumption  of  law  is  against  suicide.*"®  But  this  is 
a  rebuttable  presumption,  and  easily  yields  to  physical  facts 
clearly  inconsistent  with  it.  It  is  the  exclusive  province  of 
the  court  to  determine  whether  evidence  is  susceptible  of  a 
reasonable  inference  that  death  was  caused  by  some  other 
means  than  that  of  suicide,  and  that  being  determined  in  the 
affirmative  it  is  the  exclusive  province  of  the  jury  to  say 
wherein  the  truth  lies.^'^^  The  presumption  against  suicide 
does  not  obtain  where  the  deceased  is  shown  to  have  been 
"affected  T\ith  insanity  of  a  nature  usually  attended  with 
suicidal  tendencies.  ^^"  Evidence  of  the  statements  of  the  de- 
ceased made  prior  to,  and  about  the  time  of  his  death  to  the 
effect  that  he  intended  to  commit  suicide,  are  admissible.*** 

Accidental  Injury. 

The  law  will  presume  that  an  injury  was  not  self-inflicted, 
and  to  defeat  a  recovery  the  insurer  must  negative  this  pre- 

i»«  2  Greenleaf  Ev.,  §  278a;  Mutual  Life  Ins.  Co.  v.  Newton,  22  Wall. 
<U.  S.)  32;  Northwestern  Mut.  Life  Ins.  Co.  v.  Stevens  (C.  C.  A.), 
71  Fed.  258;  In  re  Mut.  Ben.  Co.'s  Petition,  174  Pa.  St.  1,  34  Atl. 
283;  Straub  v.  Grand  Lodge,  A.  O.  U.  W.,  37  N.  Y.  Supp.  750;  John- 
son V.  Pennsylvania  R.  Co.,  43  App.  Div.  453,  60  N.  Y.  Supp.  129. 

""  Kelly  v.  Supreme  Council  of  Catholic  Mut.  Ben.  Ass'n,  61  N.  Y. 
Supp.  394. 

'"^  Mallory  v.  Travelers'  Ins.  Co.,  47  N.  Y.  54. 

'""Agen  V.  Metropolitan  Life  Ins.  Co.,  105  Wis.  217,  80  N.  W.  1020; 
Wasey  v.  Travelers'  Ins.  Co.  (Mich.),  85  N.  W.  459. 

^i"  Mutual  Ben.  Life  Ins.  Co.  v.  Daviess'  Ex'r,  87  Ky.  541,  9  S.  W. 
812;  Wasey  v.  Travelers'  Ins.  Co.  (Mich.),  85  N.  W.  459. 

'"Hale  V.  Life  Ind.  &  Inv.  Co.,  65  Minn.  548;  Mutual  Life  Ins.  Co. 
V.  Hillmon,  145  U.  S.  285. 


778  PKACTICE    AND    PEOCEDUEE.  §  252 

sumption.  But  in  cases  where  the  very  foundation  of  the  ac- 
tion is  accidental  injury,  the  presumption  which  the  law 
raises  is  only  an  aid  to  the  other  evidence  on  the  subject,  and 
does  not  operate  to  shift  the  burden  of  proof  on  the  entire 
issue  to  the  defendant.  To  entitle  the  plaintiff  to  recover  at 
all,  under  a  policy  insuring  only  against  accidental  injuries, 
he  must  prove,  by  preponderance  of  the  evidence,  that  his  was 
an  accidental  injury.-^^^ 

Insanity. 

Sanity  is  always  presiuned,  and  suicide  of  itself  alone 
does  not  raise  a  presumption  of  insanity.  Yet  the  fact  that 
the  deceased  did  commit  suicide  may  be  properly  considered 
by  the  jury,  in  connection  with  his  previous  demeanor  and 
conduct,  as  an  item  tending  to  prove  that  he  was  insane.  ^^* 

Forfeiture,  Fraud,  and  Misrepresentation. 

The  defense  of  forfeiture,  or  termination  of  risk  otherwise 
than  by  efflux  of  time,  and  consequent  expiration  of  the  con- 
tract of  insurance,  must  be  pleaded  and  proven  by  the  in- 
surer. ^^^ 

"=  Carnes  v.  Iowa  State  Traveling  Men's  Ass'n,  106  Iowa,  281,  76 
N.  W.  683;  Freeman  v.  Travelers'  Ins.  Co.,  144  Mass.  572,  12  N.  E. 
372;  Travelers'  Ins.  Co.  v.  McConkey,  127  U.  S.  661. 

"^Karow  v.  Continental  Ins.  Co.,  57  Wis.  56;  Wolff  v.  Connecticut 
Mut.  Life  Ins,  Co.,  2  Flip.  355,  Fed.  Cas.  No.  17,929;  Ritter  v.  Mutual 
Life  Ins.  Co.,  69  Fed.  505.  As  to  evidence  of  insanity,  see  Charter 
Oak  Life  Ins.  Co.  v.  Rodel,  95  U.  S.  232;  Connecticut  Mut.  Life  Ins. 
Co.  V.  Lathrop,  111  U.  S.  612;  John  Hancock  Mut.  Life  Ins.  Co.  v. 
Moore,  34  Mich.  41;  Weed  v.  Mutual  Ben.  Life  Ins.  Co.,  70  N.  Y.  561: 
Newton  v.  Mutual  Ben.  Life  Ins.  Co.,  76  N.  Y.  426;  Meacham  v.  New 
York  State  Mut.  Ben.  Ass'n,  120  N.  Y.  237,  24  N.  E.  283 ;  Blackstone 
V.  Standard  Life  &  Ace.  Ins.  Co.,  74  Mich.  592,  42  N.  W.  156. 

"*  Jones  V.  United  States  Mut.  Ace.  Ass'n,  92  Iowa,  652;  Freeman 
V.  Travelers'  Ins.  Co.,  144  Mass.  572;  Chambers  v.  Northwestern  Mut. 
Life  Ins.  Co.,  64  Minn.  495;  Newhall  v.  Union  Mut.  Fire  Ins.  Co.,  52 
Me.  180.     See  ante,  Answer. 


§  252  EXPERT   EVIDENCE PAYMENT    OF   PKEMIUM.  77D 

Expert  Evidence. 

Expert  evidence  will  only  be  received  from  witnesses  hav- 
ing special  and  peculiar  knowledge  concerning  a  subject  mat- 
ter of  inquiry  whereof  the  jury  has  not  equal  knowledge,  and 
when  the  jury,  with  the  facts  before  them,  would  not  other- 
wise be  able  to  form  an  intelligent  opinion.  It  will  not  be  re- 
ceived concerning  matters  of  common  knowledge,  nor  where 
the  jury  have,  or  are  presumed  to  have,  equal  knowledge  with 
the  witnesses.  ^^^  Whether  given  circumstances  increase  a 
risk  has  been  held  to  be  a  proper  subject  of  expert  testi- 
mony; ^^®  and  the  cause  of  death;  ^^'^  and  the  effect  of  a 
given  disease  upon  a  life;  ^^^  and  whether  given  facts  would 
affect  the  premium  charged. ^^^ 

Payment  of  Premium. 

It  is  incumbent  upon  an  insurer  who  alleges  a  non-payment 
of  premium  upon  a  contract  admitted  to  have  been  once  in 
force,  to  show  the  default  whereby  the  obligation  is  claimed 
to  have  terminated.^-*'  But  if  the  fact  of  the  making  of  a 
valid  and  binding  contract  be  in  issue,  the  burden  of  proving 

"' Teerpenning  v.  Corn  Exchange  Ins.  Co.,  43  N.  Y.  279;  Gulf  City- 
Ins.  Co.  V.  Stephens,  51  Ala.  121;  Hartman  v.  Keystone  Ins.  Co.,  21 
Pa.  St.  466;  Jefferson  Ins.  Co.  v.  Cotheal,  7  Wend.  (N.  Y.)  72. 

""Mitchell  V.  Home  Ins.  Co.,  32  Iowa,  421;  Leitch  v.  Atlantic  Mut. 
Ins.  Co.,  66  N.  Y.  100;  Daniels  v.  Hudson  River  Fire  Ins.  Co.,  12 
Cush.  (Mass.)  416;  Schenck  v.  Mercer  County  Mut.  Fire  Ins.  Co.,  24 
N.  J.  Law,  447;  Franklin  Fire  Ins.  Co.  v.  Gruver,  100  Pa.  St.  266. 

"'  Miller  v.  Mutual  Ben.  Life  Ins.  Co.,  31  Iowa,  216,  7  Am.  Rep.  122. 

"^Hartford  Protection  Ins.  Co.  v.  Harmer,  2  Ohio  St.  452;  Eding- 
ton  V.  Aetna  Life  Ins.  Co.,  77  N.  Y.  564. 

""McLanahan  v.  Universal  Ins.  Co.,  1  Pet.  (U.  S.)  188. 

""Tobin  V.  Western  Mut.  Aid  Soc,  72  Iowa,  261,  33  N.  W.  663; 
Hodsdon  v.  Guardian  Life  Ins.  Co.,  97  Mass.  144;  Supreme  Lodge, 
K.  H.  W.,  V.  Johnson,  78  Ind.  110;  Scheufler  v.  Grand  Lodge,  A.  O. 
U.  W.,  45  Minn.  258;  Farmers'  &  Merchants'  Ins.  Co.  v.  Wiard,  5» 
Neb.  451,  81  N.  W.  312. 


780  PKACTICE   AND    TROCEDURE.  §  252 


that  fact,  Including  the  payment  of  the  premium  or  an  agree- 
ment for  credit,  rests  upon  the  insured.' 


121 


Assessments. 

The  insurer  must  show  that  assessments  have  been  regu- 
larly and  duly  made ;  ^^2  and  prove  a  failure  to  pay  assess- 
ments ;^2^  and  that  an  assessment,  if  made,  would  be  insuffi- 
cient to  meet  the  requirements  of  a  certificate.  ^2"* 

Presumptions. 

It  is  a  general  rule  that  a  state  of  facts  once  sho^vn  to  ex- 
ist is  presumed  to  continue  until  a  change,  or  facts  and  cir- 
eimistances  inconsistent  with  its  continued  existenoe,  are 
proved.  ^25  There  is  a  presumption  in  favor  of  sanity,  and 
the  continuation  of  life,  and  in  favor  of  honesty,  good  faith, 
and  fair  dealing;  of  the  truth  of  warranties  and  representa- 
tions, and  against  suicide  or  forfeiture.  ^^^  Where  premises 
are  shown  to  have  been  vacated,  a  presumption  of  vacancy  ex- 
ists imtil  subsequent  occupation  is  shown. ^^7  Where  a  parol 
agreement  to  insure  property  is  made  without  fixing  the  rate, 
the  parties  will  be  presumed  to  have  contemplated  the  cus- 
tomary rates  for  similar  risks  ;  ^^^  and  the  issuance  of  a  policy 
containing  the  usual  and  customary  terms  and  ^conditions.  ^ 


29 


"1  See  ante,  c.  3. 

"-Augusta  Mut.  Fire  Ins.  Co.  v.  French,  39  Me.  522-  Atlantic  Mut. 
Fire  Ins.  Co.  v.  Fitzpatrick,  2  Gray  (Mass.),  279. 

'"  See  ante,  note  120. 

"*  Elkhart  Mut.  Aid,  Benev.  &  Relief  Ass'n  v.  Houghton,  103  Ind. 
286;  Bentz  v.  Northwestern  Aid  Ass'n,  40  Minn.  202,  2  L.  R.  A.  784. 

""Northwestern  Mut.  Life  Ins.  Co.  v.  Stevens  (C.  C.  A.),  71  -Fed. 
260. 

^-'  See  ante,  notes  108-114. 

1"  Stoltenberg  v.  Continental  Ins.  Co.,  106  Iowa,  565,  76  N.  W.  835. 

"« Cleveland,  O.  &  P.  Mfg.  Co.  v.  Norwich  Union  Fire  Ins.  Co.,  34 
Or.  228,  55  Pac.  435. 

"» Hicks  V.  British  America  Assur.  Co.,  162  N.  Y.  284. 


§  252  STATUTES   PROVIDING   FOR   ATTORNEY'S   FEES.  Y81 

In  the  absence  of  evidence  tliere  is  a  presumption  that  a 
policy  was  delivered  at  its  date,  where,  upon  the  death  of  the 
insured,  it  is  found  in  the  possession  of  the  beneficiary, ^^"^ 
There  is  a  presumption  that  both  parties  to  a  contract  knew 
the  law  of  a  state  to  which  they  agi'eed  to  make  the  contract 
subject;  ^^^  that  notice  properly  addressed  and  sent  by  mail 
Avas  received  ;  ^^^  that  a  foreign  cori^ration  has  complied  with 
the  laws  of  a  state  wherein  it  is  doing  business ;  ^^^  that  an 
injury  was  not  self-inflicted;  ^^■'  that  the  vacancy  of  a  de- 
tached and  isolated  building  increases  the  hazard ;  ^^^  and 
against  breach  of  condition  or  forfeiture.  ^^® 

A  presumption,  or  presumptive  evidence,  is  as  original  as 
is  direct  evidence,  and  the  presumption  of  any  fact  is  good  as 
evidence  of  such  fact,  when  the  presumption  is  legitimate; 
The  presumption  stands  for  proof  until  rebutted.  ^^'^  But  the 
presumption  which  the  law  raises  is  only  an  aid  to  the  other 
evidence  on  the  subject,  and  does  not  operate  to  shift  the 
ultimate  burden  of  proof. ^^* 

Statutes  Providing  for  Attorney's  Pees. 

Statutes  providing  for  the  allowance  to  the  plaintiff  in  a 
suit  against  an  insurance  company  of  special  damages  and  an 

•'"Kendrick  v.  Mutual  Ben.  Life  Ins.  Co.,  124  N.  C.  315,  32  S.  E. 
728;  Massachusetts  Ben.  Life  Ass'n  v.  Sibley,  158  111.  411,  42  N.  E. 
137. 

"•  Mutual  Life  Ins.  Co.  v.  Phinney,  178  U.  S.  327. 

"=  Benedict  v.  Grand  Lodge,  A.  O.  U.  W.,  48  Minn.  471. 

"3  Fidelity  &  Casualty  Co.  v.  Eickhoff,  63  Minn.  170. 

"^Taylor  v.  Pacific  Mut.  Life  Ins.  Co.,  110  Iowa,  631,  82  N.  W.  325, 

"^  Jones  V.  Granite  State  Fire  Ins.  Co.,  90  Me.  40,  37  Atl.  326. 

"'  See  ante,  notes  106-114. 

"'Northwestern  Mut.  Life  Ins.  Co.  v.  Stevens  (C.  C.  A.),  71  Fed. 
260. 

"'Travelers'  Ins.  Co.  v.  McConkey,  127  U.  S.  661;  Taylor  v.  Pacific 
Mut.  Life  Ins.  Co.,  110  Iowa,  62,  82  N.  W.  326;  Jones  v.  Granite 
State  Fire  Ins.  Co.,  90  Me.  40,  37  Atl.  326. 


782  PKACTICE    AND    PKOCEDUKE.  §  252 

attorney's  fee,  in  case  the  plaintiff  recovers,  witliout  secur- 
ing a  like  privilege  to  the  defendant,  are  unconstitutional  and 
void.^^^ 

Contract  Entire  or  Several. 

In  spite  of  the  statement  by  a  learned  judge,  that  "it  is  well 
settled,  by  a  uniform  current  of  authority,  that  contract  of 
insurance  of  this  character"  (referring  to  a  policy  for  a  single 
and  entire  premium,  and  furnishing  indemnity  for  a  gross 
sum,  apportioned  upon  several  distinct  items  of  property)  "is 
an  entirety  and  indivisible,  the  sole  effect  of  the  apportionment 
of  the  amount  of  insurance  upon  the  separate  and  distinct 
items  of  property  named  in  the  policy  being  to  limit  the  ex- 
tent of  the  insurer's  risk  as  to  each  such  item  to  the  sum  so 
specified,"  ^^°  supported,  as  it  is  by  a  large  array  of  strong 
authorities,^ ^^  it  must  be  confessed  that  the  decisions  are  far 
from  being  a  unit  on  the  question. 

''» Williamson  v.  Liverpool,  L.  &  G.  Ins.  Co.,  105  Fed.  32;  Johnson 
V.  Goodyear  Min.  Co.,  127  Cal.  4,  59  Pac.  304,  47  L.  R.  A.  338;  Wilder 
V.  Chicago  &  W.  M.  Ry.  Co.,  70  Mich.  382,  38  N.  W.  289;  Wally's 
Heirs  v.  Kennedy,  2  Yerg.  (Tenn.)  554,  24  Am.  Dec.  511;  Gulf,  C.  & 
S.  F.  Ry.  Co.  V.  Ellis,  165  U.  S.  150;  Phenix  Ins.  Co.  v.  Clay,  101  Ga. 
331,  28  S.  E.  853.  But  see  Hocking  Valley  Coal  Co.  v.  Rosser,  53 
Ohio  St.  12,  29  L.  R.  A.  386;  Lancashire  Ins.  Co.  v.  Bush,  60  Neb. 
116,  82  N.  W.  314.  Compare  Jarman  v.  Knights  Templars'  &  M.  Life 
Ind.  Co.,  95  Fed.  70;  Phenix  Ins.  Co.  v.  Clay,  101  Ga.  331,  28  S.  E.  853. 

^*"  Plath  V.  Minnesota  Farmers'  Mut.  Fire  Ins.  Ass'n,  23  Minn.  482. 

1*^2  Parsons,  Contracts  (5th  Ed.),  519;  Gottsman  v.  Pennsylvania 
Ins.  Co.,  56  Pa.  St.  210;  Friesmuth  v.  Agawan  Mut.  Fire  Ins.  Co.,  10 
Cush.  (Mass.)  587;  Brown  v.  People's  Mut.  Ins.  Co.,  11  Cush.  (Mass.) 
280;  Lee  v.  Howard  Fire  Ins.  Co.,  3  Gray  (Mass.),  583;  Kimball  v. 
Howard  Fire  Ins.  Co.,  8  Gray  (Mass.),  33;  Lovejoy  v.  Augusta  Mut. 
Fire  Ins.  Co.,  45  Me.  472;  Richardson  v.  Maine  Ins.  Co.,  46  Me.  394; 
Gould  V.  York  County  Mut.  Fire  Ins.  Co.,  47  Me.  403;  Barnes  v. 
Union  Mut.  Fire  Ins.  Co.,  51  Me.  110;  Day  v.  Charter  Oak  F.  &  M.  Ins. 
Co.,  51  Me.  91;  McQueeny  v.  Phoenix  Ins.  Co.,  52  Ark.  257,  20  Am.  St. 
Rep.  179,  5  L.  R.  A.  744. 


§  252  CONTRACT  EXTIEE  OR  SEVERAL.  783 

Mr.  Parsons  says :  "If  the  consideration  to  be  paid  is  single 
and  entire,  the  contract  must  be  held  to  be  entire,  although 
the  subject  of  the  contract  may  consist  of  several  distinct  and 
wholly  independent  items."  ^'^^  As  applied  to  insurance  poli- 
cies, this  rule  would  hold  that  where  the  amount  of  insurance 
is  apportioned  to  distinct  items,  but  the  premium  paid  is 
gross,  the  contract  is  entire,  and  not  divisible,  and  if  avoided 
as  to  one  item,  it  is  avoided  as  to  all.^'*^ 

In  McGowan  v.  People's  Mut.  Fire  Ins.  Co.^-*-*  the  su- 
preme court  of  Vermont  said:  "This  is  a  question  of  gi-eat 
practical  importance,  as  a  large  proportion  of  insurance  con- 
tracts embrace  more  than  one  item  of  property  insured.  The 
decisions  are  apparently  conflicting,  but  Ave  think  are  easily 
reconciled  by  refen-ing  to  the  plain  principles  which  should 
govern  them.  The  general  rule,  'void  in  part  void  in  toto,' 
should  apply  to  all  cases  where  the  contract  is  aifected  by 
some  all-pervading  vice,  such  as  fraud,  or  some  unlawful 
act,  condemned  by  public  policy  or  the  common  law;  cases 
where  the  contract  is  entire  and  not  divisible,  and  all  those 
cases  where  the  matter  that  renders  the  policy  void  in  part, 
and  the  result  of  its  being  so  rendered  void,  affects  the  risk  of 

'*=  2  Parsons,  Contracts,  519. 

i«  McQueeny  v.  Phcenix  Ins.  Co.,  52  Ark.  257,  20  Am.  St.  Rep.  179, 
5  L.  R.  A.  744;  Garver  v.  Hawk  eye  Ins.  Co.,  69  Iowa,  202;  German- 
American  Ins.  Co.  V.  ComnTercial  Fire  Ins.  Co..  95  Ala.  469,  16  L. 
R.  A.  291;  Worachek  v.  New  Denmark  Mut.  Home  Fire  Ins.  Co.,  102 
Wis.  81,  78  N.  W.  165;  Carey  v.  German-American  Ins.  Co.,  84  Wis. 
80,  20  L.  R.  A.  267.  See,  contra,  Havens  v.  Homo  Ins.  Co.,  Ill  Ind. 
90,  12  N.  E.  137;  Geiss  v.  Franklin  Ins.  Co.,  123  Ind.  172,  24  N.  E.  99; 
Smith  V.  Agricultural  Ins.  Co.,  118  N.  Y.  518;  Coleman  v.  New  Orleans 
Ins.  Co.,  49  Ohio  St.  310,  16  L.  R.  A.  174;  Wright  v.  London  Fire  ' 
Ins.  Ass'n,  12  Mont.  474,  19  L.  R.  A.  211;  Continental  Ins.  Co.  v. 
Ward,  50  Kan.  346. 

'"  54  Vt.  211,  41  Am.  Rep.  843,  approved  in  Loomis  v.  Rockford  Ins. 
Co.,  77  Wis.  87,  20  Am.  St.  Rep.  96.  But  see  Worachek  v.  New  Den- 
mark Mut.  Home  Fire  Ins.  Co.,  102  Wis.  81,  78  N.  W.  165. 


784  PKACTIOE    AND    I'KOCEDUKE.  §  252; 

the  insurer  upon  the  other  items  in  the  contract.  Keeping 
these  rules  in  mind,  the  leading  cases  upon  this  subject  can 
all  be  reconciled.  A  recovery  should  be  had  in  all  those  cases 
where  the  contract  is  divisible;  the  different  properties  in- 
sured for  separate  sums;  and  the  risk  upon  the  property,, 
which  is  claimed  to  be  valid,  unaffected  by  the  cause  that  ren- 
ders the  policy  void  in  part." 

The  Indiana  rule  is  that  where  property  covered  by  :t 
policy  of  insurance,  although  consisting  of  separate  items,, 
constitutes  substantially  one  risk,  and  is  necessarily  subject 
or  liable  to  destruction  by  the  same  conflagration,  then  even 
although  separate  amounts  of  insurance  be  apportioned  to- 
each  separate  item  or  class  of  property,  if  the  considera- 
tion for  the  contract,  and  the  risk  are  both  indivisible,  the  con- 
tract must  be  treated  as  entire,  and  any  breach  of  a  stipula- 
tion, or  any  cause  which  renders  the  policy  void  as  to  part  of 
the  property  insured,  affects  the  other  items  in  the  same 
manner.  ^-^ 

^« Havens  v.  Home  Ins.  Co.,  Ill  Ind.  90,  12  N.  E.  137;  Pickel  v. 
Phenix  Ins.  Co.,  119  Ind.  291,  21  N.  E.  898;  Geiss  Y.  Franklin  Ins. 
Co.,  123  Ind.  172. 


TABLE  OF  CASES. 


References  are  to  pages. 


Abell  V.  Penn  Mut.  Life  Ins.  Co.,  309. 

Abraham  v.  North  German  Ins.  Co.,  164,  177,  188,  265. 

Accident  Ins.  Co.  v.  Crandal,  383. 

Accident  Ins.  Co.  of  North  America  v.  Bennett,  381,  389. 

Acer  V.  Merchants'  Ins.  Co.,  281. 

Acey  V.  Fernie,  249. 

Adair  v.  Southern  Mut.  Ins.  Co.,  376,  418,  419. 

Adams  V.  Bushey,  640. 

V.  Greenwich  Ins.  Co.,  363. 

V.  New  York  Bowery  Fire  Ins.  Co.,  638,  650,  656,  658,  664,  666. 

V.  Northwestern  E.  &  L.  Ass'n,  757. 

V.  Rockingham  Mut.  Fire  Ins.  Co.,  698. 

V.  South  British  &  Nat.  F.  &  M.  Ins.  Co.,  609. 
Adam's  Adm'r  v.  Reed.  289. 

Adreveno  v.  Mutual  Reserve  Fund  Life  Ass'n,  776. 
Aetna  Fire  Ins.  Co.  v.  Boon,  375,  766. 

V.  Tyler,  513. 
Aetna  Ins.  Co.  v.  Com.,  23,  35. 

V.  Glasgow  Electric  Light  &  Power  Co.,  447. 

V.  Grube,  322. 

V.  Harvey,  33. 

V.  Jackson,  277. 

V.  Johnson,  434. 

V.  McLead,  619,  769. 

V.  Maguire,  156, 177,  261. 

V.  Mlers,  504,  509. 

V.  Norman,  325. 

V.  People's  Bank  of  Greenville,  452,  500,  503,  506,  514. 

V.  Piatt,  661. 

V.  Shryer,  261,  263. 

V.  Simmons,  343,  539,  543,  588. 

V.  Stevens,  530. 
Aetna  Life  Ins.  Co.  v.  Davey,  393. 
KEitR,  INS.— 50 


786  TABLE    OF    CASES. 

References  are  to  pages. 

Aetna  Life  Ins.  Co.  v.  Deming,  392. 

V.  France,  322. 

V.  Mason,  149. 

V.  Paul,  216,  309. 

V.  Vandecar,  432. 
Aetna  Nat.  Bank  v.  United  States  Life  Ins.  Co.,  693,  694. 
Agen  V.  Metropolitan  Life  Ins.  Co.,  396,  777. 
Agricultural  Ins.  Co.  v.  Bemiller,  508,  514. 

V.  Montague,  281. 

V.  Potts,  179, 185,  591. 
Alabama  Gold  Life  Ins.  Co.  v.  Garmany,  317,  442. 

V.  Herron,  94. 

V.  Johnston,  325. 

V.  Mayes,  77,  79,  80. 

V.  Mobile  Mut.  Ins.  Co.,  687,  768. 

v.  Thomas,  118. 
Alabama  State  Mut.  Assur.  Co.  v.  Long  Clothing  &  Shoe  Co.,  157,  717. 
Albers  v.  Phoenix  Ins.  Co.,  256,  548,  555,  560,  568,  593. 
Albert  v.  Order  of  Chosen  Friends,  453,  520. 
Alexander  t.  Continental  Ins.  Co.,  231,  315,  437. 

V.  Germania  Fire  Ins.  Co.,  206. 

V.  Parker,  289. 

V.Williams,  724,  727,  745-747,  749,  755. 
Alkan  v.  New  Hampshire  Ins.  Co.,  172,  349. 
Allemania  Fire  Ins.  Co.  v.  Peck,  403. 

V.  Pitts.  Exposition  Soc,  659. 
Allemania  Ins.  Co.  v.  Little,  716. 

V.  Peck,  715. 
Allen  V.  German  American  Ins.  Co.,  196,  200,  432. 

V.  Home  Ins.  Co.,  353,  366,  764,  766,  77L 

V.  Lafayette  Ins.  Co.,  363. 

V.  Life  Ass'n  of  America,  124. 

V.  Massachusetts  Mut.  Ace.  Ass'n,  79,  81,  97. 

V.  Milwaukee  Mechanics'  Ins.  Co.,  553. 

V.  St.  Louis  Ins.  Co.,  135,  232. 

V.  Vermont  Mut.  Fire  Ins.  Co.,  708. 
Allgeyer  v.  Louisiana,  25,  26. 
Allis  V.  Ware,  679. 

Allnutt  V.  Subsidiary  High  Court  A.  O.  of  F.,  126. 
Aloe  V.  Mutual  Reserve  Life  Ass'n,  327,  339,  340. 
Alsop  V.  Commercial  Ins.  Co.,  69,  274. 
Alston  V.  Greenwich  Ins.  Co.,  219. 

V.  Mechanics'  Mut.  Ins.  Co.,  343. 

V.  Northwestern  Live  Stock  Ins.  Co.,  555,  606. 


TABLE    OF    CASES. 


787 


References  are  to  pagea. 

Alter  V.  Home  Ins.  Co.,  440. 
Alvord  V.  Baker,  44. 

V.  Barker,  41. 
Amazon  Ins.  Co.  v.  Wall,  148. 
American  Ace.  Co.  v.  Card,  486. 

V.  Carson,  383. 

V.  Reigart,  383. 
American  Ace.  Ins.  Co.  v.  Norment,  515,  607. 
American  Cent.  Ins.  Co.  v.  Bass,  670. 

V.  Birds  Bldg.  &  Loan  Ass'n,  429, 

V.  Green,  416. 

V.  Hathaway,  450. 

V.  Haws,  480. 

V.  Heaverin,  552,  557,  561. 

V.  McCrea,  239. 

V.  McLanathan,  148,  439,  565,  773. 

V.  Rothschild,  364,  508. 

V.  Simpson,  115,  456,  526,  539,  575,  589. 

V.  Sweetser,  573. 

V.Ware,  332. 
American  Credit  Ind.  Co.  v.  Carrollton  Furniture  Mfg.  Co.,  321. 

V.  Wood,  479,  489. 
American  Employers'  Liability  Ins.  Co.  v.  Barr,  163,  283,  543. 

V.  Fordyce,  249. 
American  Fire  Ins.  Co.  v.  Brighton  Cotton  Mfg.  Co.,  334,  411,  420,  421, 

V.  Brooks,  201,  208. 

V.  First  Nat.  Bank,  119. 

V.  Hazen,  776. 

V.  Sisk,  556. 

V.  Stuart,  616,  624,  664. 
American  Horse  Ins.  Co.  v.  Patterson,  101. 
American  Ins.  Co.  v.  Butler,  303. 

V.  Charles,  303. 

V.  Gallaghan,  118. 

V.  Gallatin,  408. 

V.  Gilbert,  327,  350. 

V.  Henley,  120,  303. 

V.  Klink,  304,  313. 

V.  McWhorter,  303.    ' 

V.  Neiberger,  230. 

V.  Padfield,  412. 

V.  Pressell,  303. 

Y.  Replogle,  409. 


788  TABLE    OF    CASES. 

References  are  to  pages. 

American  Ins.  Co.  v.  Smith,  304. 

V.  Stoy,  118, 122,  301. 
American  Life  Ins.  Co.  v.  Malione,  163,  169,  349. 
American  Life  Ins.  &  Trust  Co.  v.  Shultz,  443. 
American  Steam  Boiler  Ins.  Co.  v.  Chicago  Sugar  Refining  Co.,  370. 

V.  Wilder,  83,  223. 
American  Surety  Co.  v.  Pauly,  7,  135,  458,  479,  489. 
American  Underwriters'  Ass'n  v.  George,  164,  257. 
American  Union  Life  Ins.  Co.  v.  Wood,  150. 
Ames  V.  Manhattan  Life  Ins.  Co.,  111. 

V.  Richardson,  10,  677. 
Amick  V.  Butler,  283,  287. 
Ampleman  v.  Citizens'  Ins.  Co.,  445,  446,  621. 
Anchor  Assur.  Co.,  In  re,  752. 
Anchor  Life  Ins.  Co.  v.  Pease,  162,  251,  295. 
Anderson  v.  Continental  Ins.  Co.,  75. 

V.  Manchester  Fire  Assur.  Co.,  71,  143,  231,  244,  562,  712,  713. 

V.  Miller,  448,  700. 

V.  Supreme  Council,  0.  of  C.  F.,  453,  520. 
Anderson's  Estate,  In  re,  694. 
Andes  Ins.  Co.  v.  Fish,  537,  675,  676. 
Andrews  v,  Aetna  Life  Ins.  Co.,  265. 

V.  Union  Cent.  Life  Ins.  Co.,  694. 
Angell  V.  Hartford  Fire  Ins.  Co.,  47,  51,  99. 
Angler  v.  Western  Assur.  Co.,  418. 

Anglo-Australian  Life  Assur.  Co.  v.  British  Provident  L.  &  F.  Soc,  750. 
Anoka  Lumber  Co.  v.  Fidelity  &  Casualty  Co.,  486,  487. 
Anthony  v.  German  American  Ins.  Co.,  263. 

V.  Mercantile  Mut.  Ace.  Ass'n,  365. 
Anthracite  Ins.  Co.  v.  Sears,  697. 
Arff  V.  Starr  Fire  Ins.  Co.,  167,  196,  199,  206,  254. 
Argall  V.  Old  North  State  Ins.  Co.,  523,  549,  550,  572,  596. 
Arkansas  Fire  Ins.  Co.  v.  Wilson,  403. 
Arkell  v.  Commerce  Ins.  Co.,  232,  241. 
Armenia  Ins.  Co.  v.  Paul,  349. 
Armour  v.  Transatlantic  Fire  Ins.  Co.,  344. 

Armstrong  v.  Agricultural  Ins.  Co.,  518,  519,  547,  548,  555,  573,  582,. 
584,  590,594. 

V.  State  Ins.  Co.,  76,  80,  163. 
Arrott  V.  Walker,  50,  271. 

Ashenfelter  v.  Employers'  Liability  Assur.  Corp.,  397. 
Ashworth  v.  Builders'  Mut.  Fire  Ins.  Co.,  412. 
Astor  V.  Union  Ins.  Co.,  774. 


TABLE    OF    CASES.  789 

References  are  to  pages. 

Atkins  V.  Boylston  F.  &  M.  Ins.  Co.,  103. 

V.  Equitable  Life  Assur.  Soc,  160. 

V.  Sleeper,  101. 
Atkinson  v.  Hawkeye  Ins.  Co.,  79,  81. 
Atlantic  Ins.  Co.  v.  Carlin,  167,  207,  568. 

V.  Goodall,  101. 

V.  Manning,  135. 
Atlantic  Mut.  Fire  Ins.  Co.  v.  Fitzpatrick,  780. 
Attleborough  Sav.  Bank  v.  Security  Ins.  Co.,  704. 
Attorney  General  v.  North  American  Life  Ins.  Co.,  24. 
Augusta  Mut.  Fire  Ins.  Co.  v.  French,  780. 
Aultman  v.  McConnell,  689. 
Aurora  Fire  Ins.  Co.  v.  Johnson,  505. 
Aurora  F.  &  M.  Ins.  Co.  v.  Kranich,  461. 

Au  Sable  Lumber  Co.  v.  Detroit  Manufacturers'  Fire  Ins.  Co.,  333. 
Austerlitz  v.  Order  of  Chosen  Friends,  191. 
Ayers  v.  Hartford  Fire  Ins.  Co.,  515,  585. 
Ayres  v.  Hartford  Fire  Ins.  Co.,  517,  518. 

Babcock  v.  Baker,  293. 

V.  Montgomery  County  Mut.  Ins.  Co.,  372. 
Bacon  v.  United  States  Mut.  Ace.  Ass'n,  382,  384. 
Badger  v.  American  Popular  Life  Ins.  Co.,  86,  95. 

V.  Glens  Falls  Ins.  Co.,  452,  455,  458,  474,  502,  526,  541,  569,  579. 

V.  Phoenix  Ins.  Co.,  522. 
Bageley  v.  Mutual  Reserve  Fund  Life  Ass'n,  313. 
Bahr  v.  National  Fire  Ins.  Co.,  366. 

Baile  v.  St.  Joseph's  F.  &  M.  Ins.  Co.,  48-50,  60,  77,  456,  480. 
Bailey  v.  American  Cent.  Ins.  Co.,  146. 

V.  Homestead  Fire  Ins.  Co.,  432. 

V.  Hope  Ins.  Co.,  138,  454,  505. 

V.  Mutual  Ben.  Ass'n,  763,  764. 
Bainbridge  v.  Neilson,  737. 
Baker  v.  Commercial  Union  Assur.  Co.,  55. 

V.  German  Fire  Ins.  Co.,  417,  475,  477,  484. 

V.  New  York  Life  Ins.  Co.,  353, 

V.  Phoenix  Assur.  Co.,  621. 

V.  State  Ins.  Co.,  67,  331,  366,  772. 
Baldwin  v.  Chouteau  Ins.  Co.,  75. 

V.  German  Ins.  Co.,  108,  318, 

V.  Mildeberger,  83. 

V,  New  York  Life  Ins.  &  Trust  Co.,  423. 


790  TABLE    OF    CASES. 

References  are  to  pages. 

Baldwin  v.  Phoenix  Ins.  Co.,  105,  403.  » 

V.  State  Ins.  Co.,  146,  149. 
Balestracci  v.  Firemen's  Ins.  Co.,  372,  529. 
Ballon  V.  Gile,  144. 

Balmford  v.  Grand  Lodge,  A.  0.  U.  W.,  594,  671. 
Baltimore  Fire  Ins.  Co.  v.  Loney,  132. 
Bammessel  v.  Brewers'  Fire  Ins.  Co.,  538,  602. 
Bancroft  v.  Home  Ben.  Ass'n,  340. 
Bane  v.  Travelers'  Ins.  Co.,  296. 

Bangor  Sav.  Bank  v.  Niagara  Fire  Ins.  Co.,  623,  640,  654,  664. 
Banholzer  v.  New  York  Life  Ins.  Co.,  306. 
Bankers'  Ace.  Ins.  Co.  v.  Rogers,  104. 
Bankhead  v.  Des  Moines  Ins.  Co.,  346,  417. 
Bank  of  U.  S.  v.  Dandridge,  177. 
Barber  v.  Connecticut  Mut.  Life  Ins.  Co.,  162. 

V.  Fire  &  Marine  Ins.  Co.  of  "VMieeling,  425,  660. 
Barbot  v.  Mutual  Reserve  Fund  Life  Ass'n,  121. 
Barbour  v.  Connecticut  Mut.  Life  Ins.  Co.,  697. 
Barden  v.  St.  Louis  Mut.  Life  Ins.  Co.,  747. 
Barnes  v.  Fidelity  Mut.  Life  Ass'n,  385. 

V.  Hekla  Fire  Ins.  Co.,  4,  721-723,  743,  753. 

V.  Piedmont  &  A.  Life  Ins.  Co.,  295. 

v.  Union  Mut.  Fire  Ins.  Co.,  782. 
Barr  v.  Insurance  Co.  of  North  America,  63,  79. 
Barre  v.  Council  Bluffs  Ins.  Co.,  115,  456,  550,  560,  566,  589. 
Barrett  v.  Union  Mut.  Fire  Ins.  Co.,  422. 
Barry  v.  Boston  Marine  Ins.  Co.,  156. 

V.  Hamburg-Bremen  Fire  Ins.  Co.,  403,  404. 
Bartlett  v.  Fireman's  Fund  Ins.  Co.,  179,  188,  327,  721,  726. 

V.  Goodrich,  694. 

v.  Iowa  State  Ins.  Co.,  765. 

V.  Union  Mut.  Fire  Ins.  Co.,  450,  574. 
Barton  v.  Home  Ins.  Co.,  375. 
Bassell  v.  American  t'^re  Ins.  Co.,  118,  198,  364. 
Bassett  v.  Parsons,  697. 

Batchelder  v.  Insurance  Co.  of  North  America,  441. 
Batdorf  v.  Fehler,  289. 
Bates  V.  British  American  Assur.  Co.,  655. 

v.  Equitable  Ins.  Co.,  279,  677,  764. 
Baubie  v.  Aetna  Ins.  Co.,  159. 
Bauer  v.  Samson  Lodge,  K.  of  P.,  209,  619. 
Baumgartel  v.  Providence  Wash.  Ins.  Co.,  550. 
Baxter  v.  Brooklyn  Life  Ins.  Co.,  306. 


TABLE    OF    CASES. 

References  are  to  pages. 

Baxter  v.  Hartford  Fire  Ins.  Co.,  277. 

V.  Massasoit  Ins.  Co.,  141. 
Bayles  v.  Hillsborough  Ins.  Co.,  275. 
Bayless  v.  Travelers'  Ins.  Co.,  385. 
Beacon  v.  United  States  Mut.  Ace.  Ass'n,  388. 
Beadle  v.  Chenango  County  Mut.  Ins.  Co.,  124. 
Beakes  v.  Phoenix  Ins.  Co.,  359,  373,  436. 
Beals  V.  Home  Ins.  Co.,  438,  439. 
Bean  v.  Travelers'  Ins.  Co.,  386. 
Beard  v.  Sharp,  685. 
Beardsley  v.  Davis,  271. 
Beatty  v.  Lycoming  Co.  Mut.  Ins.  Co.,  499,  500,  593,  597. 

V.  Mutual  Reserve  Fund  Life  Ass'n,  311. 
Beaver  &  T.  Mut.  Fire  Ins.  Co.  v.  Trimble,  747. 
Beck  v.  Pennsylvania  R.  Co.,  14. 
Becker  v.  Farmers'  Mut.  Fire  Ins.  Co.,  122. 
Beckett  v.  Northwestern  Masonic  Aid  Ass'n,  396,  529. 
Beebe  v.  Equitable  Mut.  L.  &  E.  Ass'n,  162. 

V.  Ohio  Farmers'  Ins.  Co.,  241,  400. 
Beezley  v.  Des  Moines  Life  Ass'n,  300,  301. 
Behrens  v.  Germania  Fire  Ins.  Co.,  536,  716. 
Beidelman  v.  Powell,  365. 
Bell  V.  Lycoming  Fire  Ins.  Co.,  710. 
Belleville  Mut.  Ins.  Co.  v.  Van  Winkle,  81. 
Belt  V.  American  Cent.  Ins.  Co.,  444. 

v.  Brooklyn  Life  Ins.  Co.,  160. 
Benedict  v.  Grand  Lodge,  A.  0.  U.  W.,  306,  781. 

v.  Ocean  Ins.  Co.,  363. 
Benesh  v.  Mill  Owners'  Mut.  Fire  Ins.  Co.,  751. 
Ben  Franklin  Fire  Ins.  Co.  v.  Flynn,  482,  507. 
Ben  Franklin  Ins.  Co.  v.  Weary,  200. 
Bennecke  v.  Connecticut  Mut.  Life  Ins.  Co.,  547,  555. 
Bennett  v.  Agricultural  Ins.  Co.,  332,  412,  414,  549. 
V.  City  Ins.  Co.,  83,  753. 

V.  Council  Bluffs  Ins.  Co.,  172,  214,  254,  409. 
V.  Lycoming  County  Mut.  Ins.  Co.,  477,  483,  584,  592. 
V.  Maryland  Fire  Ins.  Co.,  266,  515,  524,  575,  688. 
V.  "Van  Riper,  287. 
Benninghoff  v.  Agricultural  Ins.  Co.,  266. 
Benson  v.  Markoe,  151. 
Bent  V.  Hart,  724,  728,  746,  747,  751. 
Bentley  v.  Lumbermen's  Ins.  Co.,  416. 
Benton  v.  Farmers'  Mut.  Fire  Ins.  Co.,  360,  361,  366. 


791 


792  TABLE    OF    CASES. 

References  are  to  pages. 

Bentz  T.  Northwestern  Aid  Ass'n,  530,  763,  780. 
Berger  v.  Pacific  Mut.  Life  Ins.  Co.,  390. 
Bergman  v.  Commercial  Assur.  Co.,  648. 
Bernard  v.  Kellogg,  773. 

V.  United  Life  Ins.  Ass'n,  211,  230. 
Bernero  v.  South  British  &  Nat.  Ins.  Co.,  525,  565. 
Bernheim  v.  Beer,  692. 

Bernheimer  v.  City  of  Leadville,  196.  * 

Berry  v.  American  Cent.  Ins,  Co.,  280,  408,  558,  561. 

V.  Knights  Templars'  &  Masons'  Life  Indemnity  Co.,  38. 
Bersche  v.  Globe  Mut.  Ins.  Co.,  439. 

V.  St.  Louis  Mut.  F.  &  M.  Ins.  Co.,  439. 
Betcher  v.  Capital  Fire  Ins.  Co.,  235,  317,  419,  420.  432,  710,  711. 
Bevin  v.  Connecticut  Mut.  Life  Ins.  Co.,  5,  8,  69,  423. 
Bicknell  v.  Lancaster  City  &  County  Fire  Ins.  Co.,  281. 
Biddeford  Sav.  Bank  v.  Dwelling-House  Ins.  Co.,  576. 
Bidwell  V.  Northwestern  Ins.  Co.,  335. 
Bigelow  V.  Berkshire  Life  Ins.  Co.,  395. 
Bilbrough  v.  Metropolis  Ins.  Co.,  336. 
Billings  V.  Accident  Ins.  Co.,  395. 

V.  German  Ins.  Co.,  678,  704. 

V.  Metropolitan  Life  Ins.  Co.,  341,  347. 

V.  Tolland  County  Mut.  Fire  Ins.  Co.,  335. 
Bird  V.  Mutual  Union  Ass'n,  757. 
Birmingham  Fire  Ins.  Co.  v.  Kroegher,  217. 

Y.  Pulver,  514,  614,  618. 
Bish  V.  Hawkeye  Ins.  Co.,  423. 
Bishop  V.  Agricultural  Ins.  Co.,  557,  561,  603,  635,  637,  641,  643,  667. 

V.  Brainerd,  742. 

V.  Clay  F.  &  M.  Ins.  Co.,  141,  281. 

V.  Grand  Lodge,  81,  88,  89. 
Black  V.  Delaware  &  R.  Canal  Co.,  742, 
Blackburn,  Low  &  Co.  v.  Vigors,  201,  348. 
Blackerby  v.  Continental  Ins.  Co.,  296. 
Blackmer  v.  Home  Ins.  Co.,  36. 
Blackstone  v.  Alemannia  Fire  Ins,  Co.,  738. 

V.  Standard  Life  &  Ace.  Ins.  Co.,  395,  778. 
Blackwell  v.  Miami  Valley  Ins.  Co.,  403. 
Blake  v.  Exchange  Mut.  Ins.  Co.,  547,  558,  575,  595. 

V.  Hamburg  Bremen  Fire  Ins.  Co.,  100,  166. 
Blakeley  v.  Phoenix  Ins.  Co.,  470. 
Blanks  v.  Hibernia  Ins.  Co.,  428. 
Blinn  v.  Dresden  Mut.  Fire  Ins.  Co.,  134. 


TABLE    OF    CASES.  793 

References  are  to  pages. 

Block  V.  Valley  Mut.  Ins.  Ass'n,  690. 

Bloom  V,  Franklin  Life  Ins.  Co.,  378,  389,  390. 

V.  State  Ins.  Co.,  317. 
Bloomington  Mut.  Ben.  Ass'n  v.  Blue,  283,  679. 
Bloomington  Mut.  Life  Ben.  Ass'n  v.  Cummins,  341,  345. 
Blossom  V,  Lycoming  Fire  Ins.  Co.,  460,  548,  550,  590,  593. 
Blumer  v.  Phoenix  Ins.  Co.,  334. 
Boardman  v.  Merrimack  Mut.  Fire  Ins.  Co.,  355. 
Boatman's  F.  &  M.  Ins.  Co.  v.  Parker,  370. 
Bodine  v.  Exchange  Fire  Ins.  Co,,  193,  245,  249,  254,  255,  293. 
Body  V.  Hartford  Fire  Ins.  Co.,  172. 
Boehen  v.  Williamsburg  City  Ins.  Co.,  182. 
Boehm  v.  Commercial  Alliance  Life  Ins.  Co.,  328. 
Boetcher  v.  Hawkeye  Ins.  Co.,  206,  208,  219. 
Bogards  v.  Farmers'  Mut.  Ins.  Co.,  122. 
Bogart  V.  Thompson,  289. 
Bohen  v.  Williamsburgh  City  Ins.  Co.,  193. 
Bohn  Mfg.  Co.  v.  Sawyer,  280. 
Boice  V.  Thames  &  M.  Marine  Ins.  Co.,  78, 
Bolan  V.  Fire  Ass'n  of  Philadelphia,  548,  555. 
Bolton  V.  Bolton,  144,  681. 
Bon  V.  Railway  Passenger  Assur.  Co.,  394. 
Bonefaut  v.  American  Fire  Ins.  Co.,  688. 
Bohenfant  v.  American  Fire  Ins.  Co.,  549. 
Boon  V.  Aetna  Ins.  Co.,  375. 
Borden  v.  Hingham  Mut.  Fire  Ins.  Co.,  69. 
Borgards  v.  Farmers'  Mut.  Ins.  Co.,  120,  125. 
Boright  V.  Springfield  F.  &  M.  Ins.  Co.,  131,  133,  140,  361,  368. 
Born  V.  Home  Ins.  Co.,  410. 
Boston  Safe  D.  &  T.  Co.  v.  Thomas,  704. 
Boston  Water  Power  Co.  v.  Gray,  639. 
Boston  &  A.  R.  Co.  v.  Mercantile  Trust  &  Deposit  Co.,  104. 
Bostwick  V.  Stiles,  381. 

Bosworth  V.  Western  Mut.  Aid  Soc,  293,  303. 
Boulware  v.  Davis,  37. 

Bound  Brook  Mut.  Fire  Ins.  Ass'n  v.  Nelson,  704. 
Bourgeois  v.  Mutual  Fire  Ins.  Co.,  258,  351. 

V.  Northwestern  Nat.  Ins.  Co.,  213. 
Boussmaker,  Ex  parte,  20. 
Boutelle  v.  Westchester  Fire  Ins.  Co.,  70,  344. 
Bouton  V.  American  Mut.  Life  Ins.  Co.,  248. 
Bowen  v.  National  Life  Ass'n,  532,  534,  536. 
Bowlin  V.  Hekla  Fire  Ins.  Co.,  238,  459,  460,  560,  563. 


794  TABLE    OF    CASES. 

References  are  to  pages. 

Bowlus  V.  Phenix  Ins.  Co.,  222,  410,  419. 
Bowman  v.  Agricultural  Ins.  Co.,  52,  250. 

V.  Franklin  Ins.  Co.,  335. 
Boyd  V.  Cedar  Rapids  Ins.  Co.,  586. 

V.  Mississippi  Home  Ins.  Co.,  362. 
Boyer  v.  Grand  Rapids  Fire  Ins.  Co.,  416. 
Boyle  V.  Hamburg-Bremen  Fire  Ins.  Co.,  493,  500,  624. 

V.  Northwestern  Mut.  Relief  Ass'n,  213,  327. 
Boynton  v.  Clinton  &  E.  Mut.  Ins.  Co.,  367. 
Bradbury  v.  Fire  Ins.  Ass'n  of  England,  367. 
Braddy  v.  New  York  Bowery  Fire  Ins.  Co.,  641,  643,  657,  667» 
Bradford  v.  Homestead  Fire  Ins.  Co.,  180. 
Bradley  v.  Mutual  Ben.  Life  Ins.  Co.,  379,  390. 

V.  Phoenix  Ins.  Co.,  425. 

V.  Potomac  Fire  Ins.  Co.,  101. 
Bradlie  v.  Maryland  Ins.  Co.,  101. 
Bradshaw  v.  Agricultural  Ins.  Co.,  634,  651,  656. 
Bradtfeldt  v.  Cooke,  355. 
Brady  v.  Northwestern  Ins.  Co.,  139,  357,  438. 

V.  United  Life  Ins.  Ass'n,  327,  340. 
Braker  v.  Connecticut  Ind.  Ass'n,  491.  498. 
Brandon  v.  Curling,  20. 
Brandup  v.  St.  Paul  F.  &  M.  Ins.  Co.,  169. 
Brant  v.  Virginia  Coal  &  Iron  Co.,  709. 
Braunstein  v.  Accidental  Death  Ins.  Co.,  498,  616,  632, 
Breckinridge  v.  American  Cent.  Ins.  Co.,  160,  241,  407,  714,  776» 
Breed  v.  Providence  Wash.  Ins.  Co.,  440. 
Breedlove  v.  Norwich  Union  Fire  Ins.  Co.,  330,  332. 
Breeze  v.  Metropolitan  Life  Ins.  Co.,  341. 
Breitung,  In  re,  138. 

Breuner  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  371. 
Brewer  v.  Chelsea  Mut.  Ins.  Co.,  121,  209,  547,  595. 
Brick  V.  Campbell,  688. 

Briesenmeister  v.  Supreme  Lodge  K.  of  P.,  328. 
Briggs  V.  Earl,  688. 

V.  Fireman's  Fund  Ins.  Co.,  603,  659,  661. 

V.  McCullough,  5,  8,  69. 

V.  North  American  &  M.  Ins.  Co.,  369. 
Brigham  v.  Home  Life  Ins.  Co.,  697. 

Brighton  Mfg.  Co.  v.  Reading  Fire  Ins.  Co.,  411,  413,  419,  420. 
Brink  v.  Hanover  Fire  Ins.  Co.,  108,  482,  489,  515,  523,  584. 

V.  Merchants'  &  Mechanics'  Ins.  Co.,  131,  217. 
Brinley  v.  National  Ins.  Co.,  433,  435,  438. 


TABLE    OF    CASES.  795 

References  are  to  pages. 

British-America  Assiir.  Co.  v.  Bradford,  447. 

V.  Miller,  367. 
British  &  American  Tel.  Co.  v.  Colson,  526. 
Broadwater  v.  Lion  Fire  Ins.  Co.,  363,  401. 
Broadway  Ins.  Co.  v.  Doying,  623,  642,  650,  664. 

Brock  V.  Des  Moines  Ins.  Co.,  459,  491,  501,  523,  552,-557,  558,  5*61,  575, 
582,  597,  604. 

V.  Dwelling  House  Ins.  Co.,  620,  623,  624,  626,  627,  635,  636,  641, 
657,  665,  667. 
Brockway  v.  Mutual  Ben.  Life  Ins.  Co.,  393. 
Bromberg  v.  Minnesota  Fire  Ass'n,  575. 
Brooklyn  Life  Ins.  Co.  v.  Butcher,  133,  134. 

V.  Week,  442. 
Brown  v.  American  Cent.  Ins.  Co.,  90,  96. 

V.  Balfour,  24. 

V.  Cotton  &  Woolen  Manuf'rs  Mut.  Ins.  Co.,  402,  405,  688. 

V.  Equitable  Life  Assur.  Soc,  688,  689. 

V.  Hartford  Fire  Ins.  Co.,  493. 

V.  Iowa  Legion  of  Honor,  682. 

V.London  Assur.  Corp.,  475,  477,  484.  584,  588,  593. 

V.  Massachusetts  M.  L.  Ins.  Co.,  185,  318. 

V.  Metropolitan  Life  Ins.  Co.,  340,  341,  352. 

V.  People's  Mut.  Ins.  Co.,  782. 

V.  Quincy  Mut.  Fire  Ins.  Co.,  70. 

V.  Railway  Passenger  Assur.  Co.,  256. 

V.  Roger  Williams  Ins.  Co.,  648. 

V.  State  Ins.  Co.,  263. 

V.  United  States  Casualty  Co.,  Ii4,  390. 
Brownfield  v.  Phoenix  Ins.  Co.,  293. 
Brown's  Appeal,  681. 
Bruce  v.  Connecticut  Mut.  Life  Ins.  Co.,  339,  345. 

V.  Continental  Life  Ins.  Co.,  119. 
Brum  V.  Merchants'  Mut.  Ins.  Co.,  724,  744,  746,  750,  756. 
Bruner  v.  Thiesner,  40. 
Brush  V.  Fisher^  653. 
Bryan  v.  National  Life  Ins.  Ass'n,  246. 

V.  Traders'  Ins.  Co.,  404. 
Bryant  v.  Commonwealth  Ins.  Co.,  141. 
Bryce  v.  Lorillard  Fire  Ins.  Co.,  146,  147. 
Buchanan  v.  Exchange  Fire  Ins.  Co.,  364. 

V.  Westchester  County  Mut.  Ins.  Co.,  403. 
Buchannan  v.  Supreme  Conclave,  I.  O.  of  H.,  298,  311,  469. 
Buck  V.  Phoenix  Ins.  Co.,  346,  676. 


796  TABLE    OF    CASES. 

References  are  to  pages.  * 

Buckley  V.  Humason,  33. 

Buell  V.  Breese  M.  &  G.  Co.,  32. 

Buelow,  In  re,  697. 

Buffalo  L.  T.  &  S.  Deposit  Co.  v.  Knights  Templar  &  M.  Mut.  Aid 

Ass'n,  491,  496,  498,  503. 
Buffum  V.  Fayette  Mut.  Fire  Ins.  Co.,  294,      > 
Bulger  V.  Washington  Life  Ins.  Co.,  297. 
Bullman  v.  North  British  &  M.  Ins.  Co.,  686. 
Bumstead  v.  Dividend  Mut.  Ins.  Co.,  469. 
Burchell  v.  Marsh,  649,  652,  654. 
Burger  v.  Columbian  Ins.  Co.,  764. 
Burgess  v.  Alliance  Ins.  Co.,  364. 
Burkard  v.  Travelers'  Ins.  Co.,  132. 
Burkhard  v.  Travelers'  Ins.  Co.,  135,  391,  397. 
Burkheiser  v.  Mutual  Ace.  Ass'n,  135. 
Burland  v.  Northwestern  Mut.  Ben.  Ass'n,  764. 
Burleigh  v.  Gebhard  Fire  Ins.  Co.,  334. 
Burlington  Ins.  Co.  v.  Brockway,  335,  412. 

v.  Gibbons,  236,  240,  431. 

V.  Kennerly,  553,  563,  566. 
Burlington  V.  R.  D.  v.  White,  82. 
Burner's  Adm'r  v.  German-American  Ins.  Co.,  305. 
Burnett  v.  American  Cent.  Ins.  Co.,  506, 

V.  Eufaula  Home  Ins.  Co.,  135,  401. 
Burnham  v.  Royal  Ins.  Co.,  488. 
Burns  v.  Thayer,  410. 

Burritt  v.  Saratoga  County  Mut.  Fire  Ins.  Co.,  322. 
Bursinger  v.  Bank  of  Watertown.  687. 
Burson  v.  Fire  Ass'n  of  Philadelphia,  331. 
Burton  v.  Connecticut  Mut.  Life  Ins.  Co.,  288,  768. 

V.  Farinholt,  693,  697. 
Buse  v.  Mutual  Ben.  Life  Ins.  Co.,  101. 
Bush  V.  Westchester  Fire  Ins.  Co.,  524,  560,  563. 
Business  Men's  League  v.  Waddill,  71. 
Butero  v.  Travelers'  Ace.  Ins.  Co.,  390. 
Butler  V.  Supreme  Council  C.  B.  L.,  336. 

Caballero  v.  Home  Mut.  Ins.  Co.,  359,  370. 
Cable  V.  United  States  Lite  Ins.  Co.,  321,  399. 
Cables  v.  Prescott,  683. 
Cahen  v.  Continental  Life  Ins.  Co.,  758. 
Caldwell  v.  Dwelling-House  Ins.  Co.,  479. 
V.  Fire  Ass'n  of  Philadelphia,  219. 


TABLE    OF    CASES.  791 

References  are  to  pages. 

Caledonian  Ins.  Co.  v.  Cooke,  602. 

V.  Traub,  551,  609,  638,  642,  643,  650,  667. 
Caledonian  Ry.  Co.  v.  Lockhart,  640. 
Caley  v.  Hoopes,  278. 

California  Ins.  Co.  v.  Union  Compress  Co.,  277,  357,  674. 
California  Sav.  Bank  of  San  Diego  v.  American  Surety  Co.,  459,  464, 

479,  489. 
California  State  Bank  v.  Hamburg-Bremen  Ins.  Co.,  402. 
Calverley  v.  Williams,  83. 
Cammack  v.  Lewis,  287. 
Campbell  v.  American  Fire  Ins.  Co.,  57,  60,  61,  62,  115,  456,  589,  715. 

V.  American  Popular  Life  Ins.  Co.,  504,  505,  509,  609,  616,  633, 
635,  652. 

V.  Charter  Oak  P.  &  M.  Ins.  Co.,  356,  528,  532. 

V.  International  Life  Assur.  Soc,  158,  245.  i 

V.  Monmouth  Mut.  Fire  Ins.  Co.,  376. 

V.  National  Life  Ins.  Co.,  184, 

V.  New  England  Mut.  Life  Ins.  Co.,  120,  283,  287,  325,  342,  345, 
680. 

V.  Supreme  Lodge,  K.  of  P..  167,  192,  206. 
Canada  Sugar  Refining  Co.  v.  Insurance  Co.  of  North  America,  436. 
Candy  v.  Orient  Ins.  Co.,  220. 
Canfield  v.  Greater  Camp,  K.  of  M.,  609,  612. 

V.  Watertown  Fire  Ins.  Co.,  614,  618,  640,  652. 
Cannon  v.  Home  Ins.  Co.,  409,  724,  747. 

V.  Northwestern  Mut.  Life  Ins.  Co.,  517,  520. 

V.  Phoenix  Ins.  Co.,  373,  374. 
Canton  Ins.  Office  v.  Woodside,  136. 
Capital  City  Ins.  Co.  v.  Caldwell,  362,  569. 
Capitol  Ins.  Co.  v.  Wallace,  483,  578,  619. 
Caplis  V.  American  Fire  Ins.  Co.,  411. 
Carey  v.  Farmers'  Ins.  Co.,  475,  485. 

V,  German  American  Ins.  Co.,  243,  401,  405,  420,  688,  711,  783. 

V.  London  Provincial  Fire  Ins.  Co.,  280,  436. 
Cargill  V.  Millers'  &  M.  Mut.  Ins.  Co.,  361,  363. 
Carlson  v.  Presbyterian  Board,  9,  676,  692. 

V.  Supreme  Council,  A.  L.  of  H.,  313.  316,  548,  707. 
Carnes  v.  Iowa  State  Traveling  Men's  Ass'n,  122,  382,  384,  778. 
Carnochan  v.  Christie,  650. 
Carpenter  v.  Centennial  Mut.  Life  Ass'n,  310. 

v.  German  American  Ins.  Co.,  452,  459,  471,  483,  488,  541,  599, 

v.  Knapp,  691. 

V.  Providence  Wash.  Ins.  Co.,  8,  9,  276,  278,  408,  677,  686,  714. 


798  TABLE  OF  casp:s. 

References  are  to  pages. 

Carpenter  v.  Snelling,  49. 

V.  United  Slates  Life  Ins.  Co.,  288.  289. 
Carr  v.  Hibemia  Ins.  Co.,  362. 
Carr's  Case,  747. 

Carrigan  v.  Lycoming  Fire  Ins.  Co.,  185,  237,  355,  356. 
Carrington  v.  Commercial  F.  &  M.  Ins.  Co.,  18,  723. 
Carroll  v.  Boston  Marine  Ins.  Co.,  9. 

V.  Charter  Oak  Ins.  Co.,  159,  178,  182. 

V.  Girard  Fire  Ins.  Co.,  557,  602,  603,  616,  617,  645. 
Carruge  v.  Atlantic  Fire  Ins.  Co.,  239. 
Carson  v.  Jersey  City  Ins.  Co.,  69,  329,  536. 
Carter  v.  Cotton  States  Life  Ins.  Co.,  245,  251. 

V.  John  Hancock  Mut.  Life  Ins.  Co.,  308. 
Case  V.  Hartford  Fire  Ins.  Co.,  357,  372,  376. 

V.  Manufacturers'  F.  &  M.  Ins.  Co.,  614,  618,  619. 

V.  Sun  Ins.  Co.,  426,  427. 
Cashau  v.  Northwestern  Nat.  Ins.  Co.,  734,  735,  738. 
easier  v.  Connecticut  Mut.  Life  Ins.  Co.,  421. 
Cason  V.  Owens,  691. 
Cassady  v.  American  Ins.  Co.,  304. 
Casserly  v.  Manners,  725,  727,  745,  747,  749,  751,  755, 
Castner  v.  Farmers'  Mut.  Fire  Ins.  Co.,  276,  716. 
Cathcart  v.  Equitable  Mut.  Life  Ass'n,  724,  732,  746,  749. 
Catlin  V.  Springfield  Fire  Ins.  Co.,  376,  494,  500. 
Catoir  v.  American  Life  Insurance  &  Trust  Co.,  236,  249. 
CaufReld  v.  Continental  Ins.  Co.,  302,  304. 
Cayon  v.  Dwelling  House  Ins.  Co.,  65,  508,  538,  574. 
Cedar  Rapids  Ins.  Co.  v.  Shimp,  357. 
Central  Bank  of  Washington  v.  Hume,  117,  287,  692,  693. 
Central  City  Ins.  Co.  v.  Oates,  455,  477,  482,  488,  526. 
Central  Nat.  Bank  v.  Hume,  694. 

Central  Transport. .tion  Co.  v.  Pullman's  Palace  Car  Co.,  42, 
Cerys  v.  State  Ins.  Co.,  327,  343,  344,  346. 
Chaffee  v.  Cattaraugus  Coimty  Mut,  Ins.  Co.,  345. 
Chalaron  v.  Insurance  Co.  of  North  America,  724,  725,  729,  733. 
Chamberlain  v.  Prudential  Ins.  Co.,  79,  88,  95,  110,  133,  159,  211,  773. 
Chambers  v.  Atlas  Ins.  Co.,  425. 

V.  Northwestern  Mut.  Life  Ins.  Co.,  338,  353,  769,  770,  778. 
Chandler  v.  Ins.  Co.  of  North  America,  441. 

V.  St.  Paul  F.  &  M.  Ins.  Co.,  401,  425. 

V.  Worcester  Mut.  Fire  Ins.  Co.,  376. 
Chandos  v.  American  Fire  Ins.  Co.,  430,  635,  638,  648,  650,  651,  653, 
677,  678. 


TABLE    OF   CASES.  799 

References  are  to  pages. 

Chapman  v.  Mcllwrath,  688, 

V.  Rockford  Ins.  Co.,  614,  615,  633,  641,  657,  667. 
Charter  Oak  Life  Ins.  Co.  v.  Rodel,  492,  778. 

V.  Sawyer,  33,  37. 
Chartrand  v.  Brace,  132,  144,  679,  682,  690. 
Chase  v.  People's  Fire  Ins.  Co.,  255, 

V.  Phoenix  Mut.  Life  Ins.  Co.,  308. 
Chauncey  v.  German  American  Ins.  Co.,  232,  255. 
Cheever  v.  Union  Cent.  Life  Ins.  Co.,  150. 
Chesapeake  Bank  v.  Swain,  773. 
Chicago  Guaranty  Fund  Life  Soc.  v.  Dyon,  288. 
Chicago  Life  Ins.  Co.  v.  Warner,  52. 
Chicago  Mut.  Life  Ind.  Ass'n  v.  Hunt,  20. 
Chicago,  M.  &  St.  P.  Ry.  Co.  v.  Becker,  760. 

Chicago,  St.  L.  &  N.  O.  R.  Co.  v.  Pullman  Southern  Car  Co.,  702. 
Chicago  &  A.  R.  Co.  v.  Glenny,  701. 
Chickasaw  County  Farmers'  Mut.  Fire  Ins.  Co.  v,  Weller,  448,  700- 

702, 
Chickering  v.  Globe  Mut.  Life  Ins.  Co.,  245,  294, 
Childs  V.  Firemen's  Ins.  Co.,  25. 
Chipman  v.  Carroll,  10,  677. 
Chippendale  v.  Holt,  736. 
Chippewa  Lumber  Co.  v.  Phenix  Ins.  Co.,  435,  609,  610,  615,  618,  620, 

628,  631,  671. 
Chisholm  v.  National  Capitol  Life  Ins.  Co.,  69. 
Chrisman  v.  State  Ins.  Co.,  275. 
Church  V.  La  Fayette  Fire  Ins.  Co.,  300. 
Cincinnati  Mut.  Health  Assur.  Co.  v.  Rosenthal,  33. 
Cincinnati  Mut.  Ins.  Co.  v.  May,  372. 
Cisna  v.  Sheibley,  284. 

Citizens'  Fire  Ins.  Co.  v.  Swartz,  201,  234, 
Citizens'  Fire  Ins.,  S.  &  L.  Co.  v.  Doll,  591. 
Citizens'  F.  &  M.  Ins.  Co.  v.  Short,  347. 
Citizens'  Ins.  Co.  v.  Bland,  550,  625. 
V.  Coit,  631,  652. 
V.  Hamilton,  641. 
V.  McLaughlin,  364, 
V.  Marsh,  376. 
City  Drug  Store  v.  Scottish  U.  &  N.  Ins.  Co.,  332,  717. 
City  Fire  Ins.  Co.  v.  Corlies,  359,  371,  375, 
City  Ins.  Co.  v.  Bricker,  119. 
City  of  Columbus  v.  Hartford  Ins.  Co.,  25. 
City  of  Davenport  v.  Peoria  M.  &  F.  Ins.  Co.,  49,  101. 


800  TABLE    OF    CASES. 

References  are  to  pages. 

City  of  New  Orleans  v.  Virginia  F.  &  M.  Ins.  Co.,  38. 

City  of  Worcester  v.  Worcester  Mut.  Fire  Ins.  Co.,  336. 

City  P.  &  S.  Mill  Co.  v.  Merchants'  M.  &  C.  Mut.  Fire  Ins.  Co.,  420. 

Claflin  V.  Commonwealth  Ins.  Co.,  533,  540. 

V.  United  States  Credit  System  Co.,  14,  355. 
Clark  V.  Allen,  687. 

V.  Brand,  49. 

V.  Insurance  Co.  of  North  America,  318. 

V.  Metropolitan  Life  Ins.  Co.,  295. 

V.  Mutual  Reserve  Fund  Life  Ass'n,  191. 

V.  Port  of  Mobile,  36. 
Clarke  v.  Firemen's  Ins.  Co.,  281,  361. 

V.  Schwarzenberg,  108,  685. 
Clawson  v.  Citizens'  Mut.  Fire  Ins.  Co.,  400. 
Clay  V.  Phoenix  Ins.  Co.,  233. 

Clay  Fire  &  Marine  Ins.  Co.  v.  Huron  Salt  &  Lumber  Mfg.  Co.,  28,  29. 
Clearwater  v.  Meredith,  742. 

Cleaver  v.  Traders'  Ins.  Co.,  66,  230,  236,  240,  432,  711,  715. 
Clemans  v.  Supreme  Assembly  R.  S.  of  G.  F.,  511. 
Clement  v.  British  American  Assur.  Co.,  492,  675. 
Clemmitt  v.  New  York  Life  Ins.  Co.,  311,  442. 
Cleveland  Ins.  Co.,  In  re,  741. 
Cleveland  Oil  &  Paint  Mfg.  Co.  v.  Norwich  Union  Fire  Ins.  Co.^  16, 

47,  780. 
Clevenger  v.  Mutual  Life  Ins.  Co.,  41,  161,  211,  240. 
Clifton  Coal  Co.  v.  Scottish  U.  &  N.  Ins.  Co.,  414. 
Clover  v.  Greenwich  Ins.  Co.,  435. 
Cluff  V.  Mutual  Ben.  Life  Ins.  Co.,  143. 
Coates  V.  Pennsylvania  Fire  Ins.  Co.,  765. 
Cobb  v.  Covenant  Mut.  Ben.  Ass'n,  322,  340. 

V.  New  England  Mut.  Marine  Ins.  Co.,  99,  141,  665. 
Cochran  v.  London  Assur.  Corp.,  427. 

V.  Mutual  Life  Ins.  Co.,  528. 
Cocker's  Case,  750,  752. 
Coffman  v.  Niagara  Fire  Ins.  Co.,  493. 
Cohen  v.  Continental  Fire  Ins.  Co.,  52,  107. 

V.  Continental  Life  Ins.  Co.,  731,  733. 

V.  New  York  Mut.  Life  Ins.  Co.,  11,  470. 
Cohn  V.  Orient  Ins.  Co.,  548,  555. 
Colby  V.  Light  Ins.  &  Inv.  Co.,  305,  311,  312. 
Cole  v.  Accident  Ins.  Co.,  388. 

V.  Manchester  Fire  Assur.  Co.,  529. 

V.Union  Cent.  Life  Ins.  Co.,  63,  182,  184. 


TABLE    OF   CASES.  801 

References  are  to  pages. 

Coleman  v.  New  Orleans  Ins.  Co.,  783. 

V.  Retail  Lumberman's  Ins.  Ass'n,  775. 
Coles  V.  Bowne,  83,  146. 

V.Iowa  State  Mut.  Ins.  Co.,  209. 

V.  Jefferson  Ins.  Co.,  168,  185,  208,  211,  212,  221. 
Collier  v.  Bedell,  271. 
Collins  V.  Charlestown  Mut.  Fire  Ins.  Co.,  346. 

V.London  Assur.  Corp.,  331,  398. 

V.  Phoenix  Ins.  Co.,  99,  101. 

V.  St.  Paul  F.  &  M.  Ins.  Co.,  332,  345. 
Columbia  Ins.  Co.  v.  Cooper,  280.  i 

V.  Lawrence,  477,  502,  765. 
Columbia  Mill  Co.  v.  National  Bank  of  Commerce,  155. 
Columbian  Ins.  Co.  v.  Lawrence,  452,  600. 
Columbus  Ins.  Co.  v.  Walsh,  29. 
Comly  v.  Hillegass,  309. 
Commercial  Assur.  Co.  v.  Rector,  162. 
Commercial  Fire  Ins.  Co.  v.  Allen,  167,  331,  363,  399,  435,  587. 

V.  Morris,  52.. 
Commercial  Ins.  Co.  v.  Friedlander,  536. 

V.  Globe  Mut.  Ins.  Co.,  729. 

V.  Hallock,  101. 

V.  Robinson,  135,  369,  625. 

V.  Scammon,  403,  404. 

V.  Sennett,  355,  433. 

V.  Spankneble,  219. 
Commercial  League  Ass'n  v.  People,  24. 
Commercial  Mut.  Ace.  Co.  v.  Bates,  325,  330,  339. 
Commercial  Mut.  Ins.  Co.  v.  Detroit  F.  &  M.  Ins.  Co.,  736, 

V.  Union  Mut.  Ins.  Co.,  47,  48,  50,  51,  57,  726. 
Commercial  Union  Assur.  Co.  v.  American  Cent.  Ins.  Co.,  739. 

V.  Hocking,  631,  632. 

V.  Meyer,  494. 

V.  State,  576. 
Com.  V.  Hide  &  Leather  Ins.  Co.,  353,  360,  361. 

V.  Mechanics'  Mut.  Fire  Ins.  Co.,  162. 

V.  National  Mut.  Aid  Ass'n,  24. 

V.  Nutting,  25. 

V.  Reinoehl,  23. 

V.  Vrooman,  26. 

V.  Wetherbee,  4,  144,  339. 
Conboy  v.  Railway  Officials'  Employes'  Ace.  Ass'n,  388,  397,  769. 
Concord  Union  Mut.  Fire  Ins.  Co.  v.  Woodbury,  704. 
KERR,  INS.— 51 


802  TABLE    OF    CASES. 

References  are  to  pages. 

Concordia  Fire  Ins.  Co.  v.  Johnson,  235,  556,  557. 
Condon  v.  Mutual  R.  F.  L.  Ass'n,  114,  293. 
Cone  Export  &  Commission  Co.  v.  Poole,  Hi,  36. 
Confederation  Life  Ass'n  v.  O'Donnell,  86. 
Conigland  v.  Smith,  682. 
Connecticut  Fire  Ins.  Co.  v.  Erie  Ry.  Co.,  701,  702. 

V.  Hamilton,  551,  576,  602,  628,  631,  647. 

V.  O'Fallon,  652,  653. 
Connecticut  Ind.  Ass'n  t.  Grogan's  Adm'r,  95,  250. 
Connecticut  Mut.  Life  Ins.  Co.  v.  Akens,  395. 

V.  Baldwin,  682. 

V.  Bulte,  176. 

V.  Cushman,  117. 

V.  Duerson's  Ex'r,  311. 

V.  Groom,  395,  396. 

V.  Lathrop,  778. 

V.  Luchs,  18,  285,  288,  329,  349. 

V.  Pyle,  343. 

V.  Rudolph,  80,  82. 

V.  Schaefer,  67,  G©,  283,  285,  680,  687. 

V.  Siegel,  511,  531. 

V.  Union  Trust  Co.,  342,  349. 

V.  Westervelt,  138,  688. 
Connecticut  River  Mut.  Fire  Ins.  Co.  v.  Way,  37. 
Connell  v.  Milwaukee  Mut.  Fire  Ins.  Co.,  492,  523,  524. 
Connelly  v.  Masonic  Mut.  Ben.  Ass'n,  124,  126. 
Conover  v.  Massachusetts  Mut.  Life  Ins.  Co.,  328. 

V.  Mutual  Ins.  Co.,  177. 
Conquest's  Case,  752. 
Conrad's  Estate,  In  re,  681. 

Consolidated  R.  E.  &  F.  Ins.  Co.  v.  Cashow,  735,  737. 
Constant  v.  Allegheny  Ins.  Co.,  48. 
Continental  Ins.  Co.  v.  Chamberlain,  352. 

V.  Daly,  298. 

V.  Dorman,  553,   584,  604,  606. 

V,  Jachnichen,  776. 

V.  Kasey,  159,  335,  343. 

V.  Kyle,  411,  412. 

V.  Lippold,  482. 

V.  Munns,  686. 

V.  Pearce,  206. 

V.  Pruitt,  361. 

V.  Ruckman,  182,  185. 


TABLE    OF    CASES.  803 

References  are  to  pages. 

Continental  Ins.  Co.  v.  Vanlue,  410,  713,  771. 

V.  Ward,  783. 
Continental  Life  Ins.  Co.  v.  Chamberlain,  159,  167,  171,  173,  213,  221, 
231,  338. 

V.  Rogers,  321, 

V.  Volger,  284. 

V.  Webb,  138, 

V,  Young,  321. 
Converse  v.  Citizens'  Mut.  Ins.  Co.,  279. 

V.  Knights  Templars  &  M.  Life  Ind.  Co.,  422. 
Conway  v.  Phoenix  Mut.  Life  Ins.  Co.,  318. 
Cook  V.  Continental  Ins.  Co.,  718. 

V.  Federal  Life  Ass'n,  171. 

V.  Standard  Life  &  Ace.  Ins.  Co.,  226,  230. 
Cooke  V.  Aetna  Ins.  Co.,  47,  78,  97. 
Cooker's  Case,  743. 
Cooper  V.  Pacific  Mut.  Life  Ins.  Co.,  99. 

V.  United  States  Mut.  Ben.  Ass'n,  458,  466. 
Co-operative  Fire  Ins.  Co.  v.  Lewis,  24,  339. 
Cooper  Mfg.  Co.  v.  Ferguson,  37,  174. 
Copeland  v.  Mercantile  Ins.  Co.,  258. 
Copp  v.  German  American  Ins.  Co.,  325. 
Corbett  v.  Metropolitan  Life  Ins.  Co.,  288. 

v.  Spring  Garden  Ins.  Co.,  445,  621. 
Corey  v.  Sherman,  41,  44,  757. 
Corkery  v.  Security  Fire  Ins.  Co.,  530. 
Cornell  v.  LeRoy,  489,  510,  513,  520,  527,  571. 

V.  Tiverton  &  L.  C.  Mut.  Fire  Ins.  Co.,  317. 
Cornett  v.  Phenix  Ins.  Co.,  587,  590. 
Cornwell  v.  Fraternal  Ace.  Ass'n,  397. 
Corson,  Appeal  of,  285. 
Cory  V.  Boylston  F.  &  M.  Ins.  Co.,  771. 
Coryeon  v.  Providence  Wash.  Ins.  Co.,  771. 
Gotten  V.  Fidelity  &  Casualty  Co.,  296,  341,  39"4. 
Cotter  v.  Grand  Lodge,  A.  O.  U.  W.,  121. 
Cottingham  v.  Firemen's  Fund  Ins.  Co.,  402. 
Cotton  v.  Vansittart,  694. 

Cotton  States  Life  Ins.  Co.  v.  Edwards,  179,  188. 
Couch  V.  City  Fire  Ins.  Co.,  709. 

V.  Rochester  German  Fire  Ins.  Co.,  214. 
Coursin  v.  Pennsylvania  Ins.  Co.,  275. 
Covenant  Mut.  Ben.  Ass'n  v.  Conway,  79,  80. 

V.  Hoffman,  682. 


804  TABLE    OF    CASES. 

References  are  to  pages. 

Covenant  Mut.  Ben.  Ass'n  v.  Sears,  684,  763. 

V.  Spies,  30b,  606. 
Covenant  Mut.  Life  Ass'n  v.  Baughman,  549,  556. 
Coventry  Mut.  Live  Stock  Ass'n  v.  Evans,  458,  464,  473,  474,  480,  487. 
Cowan  V.  Iowa  State  Ins.  Co.,  403. 
Cowles  V.  Continental  Life  Ins.  Co.,  118. 
Cox  V.  Aetna  Ins.  Co.,  327. 
Craft  V.  Hanover  Fire  Ins.  Co.,  56. 
Cranberry  Mut.  Fire  Ins.  Co.  v.  Hawk,  82. 
Crane  v.  City  Ins.  Co.,  407. 

V.  Partland,  83. 
Craufurd  v.  Hunter,  274. 
Cravens  v.  New  York  Life  Ins.  Co.,  138. 
Crawford  County  Mut.  Ins.  Co.  v.  Cochran,  195,  251. 
Creed  v.  Sun  Fire  Office  of  London.  278,  279. 
Crenshaw  v.  Pacific  Mut.  Life  Ins.  Co.,  549,  556,  594,  605. 
Crescent  Ins.  Co.  v.  Camp,  220. 

Crete  Farmers'  Mut.  Township  Ins.  Co.  v.  Miller,  418. 
Crew-Levick  Co.  v.  British  &  Foreign  Marine  Ins.  Co.,  367. 
Crigler  v.  Standard  Fire  Ins.  Co.,  119. 
Crikelair  v.  Citizens'  Ins.  Co.,  409. 
Crittenden  v.  Springfield  F.  &  M.  Ins.  Co.,  530. 
Croghan  v.  New  York  Underwriters'  Agdncy,  107,  159. 
Cromwell  v.  Brooklyn  Fire  Ins.  Co.,  677. 

V.  Royal  Canadian  Ins.  Co.,  138. 
Cronin  v.  Fire  Ass'n  of  Philadelphia,  327,  342,  343,  360,  420,  42L 

V.Vermont  Life  Ins.  Co.,  288. 
Cross  V.  DeValle,  20. 

V.  National  Fire  Ins.  Co.,  280. 
Crossley  v.  Connecticut  Fire  Ins.  Co.,  613,  619. 
Crossman  v.  Massachusetts  Ben.  Ass'n,  126,* 
Crosswell  v.  Connecticut  Ind.  Ass'n,  288. 
Crotty  V.  Union  Mut.  Life  Ins.  Co.,  692. 
Crouse  v.  Hartford  Fire  Ins.  Co.,  202,  237. 
Crown  Point  Iron  Co.  v.  Aetna  Ins.  Co.,  109. 
Cuesta  V.  Royal  Ins.  Co.,  371. 
Cumberland  Bone  Co.  v.  Andes  Co.,  280. 
Cumberland  Valley  Mut.  Protection  Co.  v.  Douglas,  417. 
Cummings  v.  Cheshire  County  M.  F.  Ins.  Co.,  9. 
Cummins  v.  Agricultural  Ins.  Co.,  414. 

V.  German-American  Ins.  Co.,  772. 
Cunningham  v.  Evansville  &  T.  H.  R.  Co.,  448. 
Currier  v.  Continental  Life  Ins.  Co.,  288. 


TABLE    OF    CASES.  805 

References  are  to  pages. 

Currie's  Adm'rs  v.  Mutual  Assur.  Co.,  124, 
Curry  v.  Commonwealth  Ins.  Co.,  350,  441. 
Curtis  V.  Leavitt,  745. 

Cushing  V.  Williamsburg  City  Fire  Ins.  Co.,  552. 
Cushman  v.  New  England  Fire  Ins.  Co.,  147,  150. 

V.  Northwestern  Ins.  Co.,  69,  70. 

V.  United  States  Life  Ins.  Co.,  322,  340,  385. 
Cutchin  V.  Johnston,  682. 

Cuthbertson  v.  North  Carolina  Home  Ins.  Co.,  322,  330. 
Cyrenius  v.  Mut.  Life  Ins.  Co.,  18,  245,  249,  251,  295. 

Dacey  v.  Agricultural  Ins.  Co.,  435. 

Dade  v.  Aetna  Ins.  Co.,  526. 

Daggs  V.  Orient  Ins.  Co.,  23. 

Dahlberg  v.  St.  Louis  Mut.  F.  &  M.  Ins.  Co.,  213. 

Dailey  v.  Preferred  Masonic  Mut.  Ace.  Ass'n,  84,  89,  94,  95,  99,  394, 

403. 
Dakin  v.  Liverpool,  L.  &  G.  Ins.  Co.,  456. 
Dalby  v.  India  &  London  Life  Assur.  Co.,  8,  289. 
Daniels  v.  Equitable  Fire  Ins.  Co.,  492,  500,  502,  507,  511,  514,  550,  584. 

V.  Hudson  River  Fire  Ins.  Co.,  325,  774,  779. 
Daniher  v.  Grand  Lodge,  A.  O.  U.  W.,  589,  612,  613. 
Darrow  v.  Family  Fund  Soc,  389. 
Daughtry  v.  Knights  of  Pythias,  124. 
Daul  v.  Firemen's  Ins.  Co.,  534. 
Davenport  v.  Long  Island  Ins.  Co.,  643,  645. 
Davenport  Fire  Ins.  Co.  v.  Moore,  443,  724,  728,  744,  746,  747. 
Davey  v.  Aetna  Life  Ins.  Co.,  392,  531. 
David  v.  Williamsburgh  City  Fire  Ins.  Co.,  276. 
Davidson  v.  Hawkeye  Ins.  Co.,  402. 

V.  Old  People's  Mut.  Ben.  Soc.,  47,  81,  121,  144,  313. 

V.  Supreme  Lodge,  K.  of  P.,  144. 
Davis  V.  Aetna  Mut.  Fire  Ins.  Co.,  207. 

V.  Anchor  Mut.  Fire  Ins.  Co.,  360,  628,  770. 

V.  Atlas  Assur.  Co.,  626,  627,  664. 

V.  Davis,  489,  521. 

V.  German  American  Itis.  Co.,  108. 

V.  Iowa  State  Ins.  Co.,  399. 

V.  Lamar  Ins.  Co.,  255. 

V.  Massachusetts  Mut.  Life  Ins.  Co.,  91. 

V.  New  England  Fire  Ins.  Co.,  360. 

v.  Old  Colony  R.  Co.,  39. 

V.  Pioneer  Furniture  Co.,  416. 

V.  United  States,  396. 


806  TABLE    OF    CASES. 

References  are  to  i>age3. 

Davis  Lumber  Co.  v.  Home  Ins.  Co.,  299, 
Davis  Shoe  Co.  v.  Kittanning  Ins.  Co.,  577. 
Day  V.  Charter  Oak  F.  &  M.  Ins.  Co.,  782, 

V.  Hawkeye  Ins.  Co.,  399. 

V.  Mechanics'  &  Traders'  Ins.  Co.,  176,  409. 

V.  Mill-Ovrners'  Mut.  Fire  Ins.  Co.,  420. 

V.  Mutual  Ben.  Life  Ins.  Co.,  107,  511,  531. 

V.  New  England  Life  Ins.  Co.,  697, 
Dayo  V.  Hawkeye  Ins.  Co.,  103. 
Dayton  v.  H.  B.  Claflin  Co.,  693, 
Dayton  Ins.  Co.  v.  Kelly,  4S. 
Dean  v.  Equitable  Fire  Ins.  Co.,  149. 
Dee  &  Sons  Co.  v.  Key  City  Fire  Ins.  Co.,  597. 
De  Frece  v.  National  Life  Ins.  Co.,  315. 
De  Grafi  v.  Queen  Ins.  Co.,  132,  367,  368. 
De  Grove  v.  Metropolitan  Ins,  Co.,  53,  115. 
Deitz  V.  Providence  Wash.  Ins.  Co.,  167,  202,  208,  254,  255. 
De  Jernette  v.  Fidelity  &  Casualty  Co.,  462. 
De  Land  v.  Aetna  Ins.  Co.,  504,  509. 
Delaware  Farmers'  Mut.  Fire  Ins.  Co.  v.  "U'agner,  41. 
Delaware  Ins.  Co.  v.  Quaker  City  Ins.  Co.,  721,  736,  740, 
Delaware  State  F.  &  M.  Ins.  Co.  v.  Shaw,  53. 
Delaware  &  H.  Canal  Co.  v.  Pennsylvania  Coal  Co.,  610. 
Dennis  v.  Massachusetts  Ben.  Ass'n.  109,  310. 
Denny  v.  Conway  S.  &  M.  Fire  Ins.  Co..  327. 
Denton  v.  Farmers'  Mut.  Fire  Ins.  Co.,  663,  669. 
Dentz  V.  O'Neill,  34A. 
Denver  Fire  Ins.  Co.  v.  McClelland.  44. 
Deshong  v.  Iowa  Life  &  Endowment  Ass'n,  41. 
De  Silver  v.  State  Mut.  Ins.  Co.,  555. 
Desmazes  v.  Mutual  Ben.  Life  Ins.  Co.,  138. 
Des  Moines  lee  Co.  v.  Niagara  Fire  Ins.  Co..  331. 
Devens  v.  Mechanics'  &  Traders'  Ins.  Co.,  204,  591. 
Devereaux  v.  Sun  Fire  Office  of  London,  147. 
Devlin  v.  Queen  Ins.  Co.,  376. 
De  Witt  V.  Home  Forum  Ben.  Order,  221. 
Dey  V.  Mechanics'  &  Traders'  Ins.  Co.,  233. 
Dial  V.  Valley  Mut.  Life  Ass'n,  606. 
Dibble  v.  Northern  Assur.  Co.,  94. 
Dibbrell  v.  Georgia  Home  Ins.  Co.,  263,  567. 
Diboll  V.  Aetna  Life  Ins.  Co.,  76,  83,  109,  246. 
Dick  V.  Equitable  F.  &  M.  Ins.  Co.,  561. 
V.  Franklin  Fire  Ins.  Co.,  278. 


TABLE    OF    CASES.  807 

References  are  to  pages. 

Digby  V.  American  Cent.  Ins.  Co.,  350. 
Dillard  v.  Manhattan  Life  Ins.  Co.,  20,  470. 
Dilleber  v.  Home  Life  Ins.  Co.,  328,  342. 

V.  Knickerbocker  Life  Ins.  Co.,  189. 
Dinning  v.  Phoenix  Ins.  Co.,  52,  57,  159, 
Dishong  v.  Iowa  L.  &  E.  Ass'n,  746,  748,  749. 
District  Grand  Lodge  No.  4  v.  Cohn,  144. 
Dittmer  v.  Germania  Ins.  Co.,  419. 
Dixon  V.  National  Life  Ins.  Co.,  687. 
Doane  v.  Millville  Mut.  M.  &  F.  Ins.  Co.,  121. 
Dodd  V.  Gloucester  Mut.  Fishing  Ins.  Co.,  82. 

V.  Jones,  443. 
Dogge  V.  Northwestern  Nat.  Ins.  Co.,  536. 
Dohlantry  v.  Blue  Mounds  F.  &  L.  Ins.  Co.,  716. 
Dohmen  Co.  v.  Niagara  Fire  Ins.  Co.,  533. 
Dolan  V.  Aetna  Ins.  Co.,  535. 

V.  Mutual  Reserve  Fund  Life  Ass'n,  351. 
Dolliver  v.  St.  Joseph  F.  &  M.  Ins.  Co.,  329,  349,  509. 
Dolloff  V.  Phoenix  Ins.  Co.,  535. 

Donahue  v.  Windsor  Co.  Mut.  Fire  Ins.  Co.,  477,  482,  483,  585. 
Donald  v.  Chicago,  B.  &  Q.  Ry.  Co.,  114,  120. 
Doniol  V.  Commercial  Fire  Ins.  Co.,  147,  149. 
Donnell  v.  Donnell,  279. 
Dooly  V,  Hanover  Fire  Ins.  Co.,  588. 
Dorn  V.  Germania  Ins.  Co.,  407. 
Doten  V.  Aetna  Ins.  Co.,  414. 
Doud  V.  Citizens'  Ins.  Co.,  412,  413. 
Dougherty  v.  Greenwich  Ins.  Co.,  149. 
Douville  V.  Farmers'  Mut.  Fire  Ins.  Co.,  669,  716. 
Dover  Glass  Works  Co.  v.  American  Fire  Ins.  Co.,  421, 
Dow  V.  Smith,  444. 
Dowd  V.  American  Ins.  Co.,  399. 
Dowling  V.  Lancashire  Ins.  Co.,  71,  143. 
Downey  v.  Hoffer,  687. 
Dows  V.  Faneuil  Hall  Ins.  Co.,  370. 
Dows'  Case,  752. 

Doyle  V.  Continental  Ins.  Co.,  760. 
Dozier  v.  Fidelity  &  Casualty  Co.,  384. 
Drake  v.  Marryat,  163. 

Dreier  v.  Continental  Life  Ins.  Co.,  510,  531. 
Dresser  v.  United  Firemen's  Ins.  Co.,  403,  537. 
Dryer  v.  Security  Fire  Ins.  Co.,  80,  156,  158,  161,  164,  203. 
D.  S.  Morgan  &  Co.  v.  White,  37. 


808  TABLE    OF    CASES. 

References  are  to  pages. 

Dube  V.  Masconia  Mut.  Fire  Ins.  Co.,  404,  688,  698. 
Duer  V.  Supreme  Council,  O.  of  C.  F.,  124. 
Duluth  Nat.  Bank  v.  Knoxville  Fire  Ins.  Co.,  201,  234. 
Duncan  v.  Sun  Fire  Ins.  Co.,  325. 
Dupin  V.  Mutual  Ins.  Co.,  375. 
Dupree  v.  Virginia  Home  Ins.  Co.,  347. 
Duran  v.  Standard  L.  &  A.  Ins.  Co.,  389. 
Durham  v.  Fire  &  Marine  Ins.  Co.,  146. 

Dwelling  House  Ins.  Oo.  v.  Dowdall,  155,  332,  477,  550,  558,  560,  561, 
577. 

V,  Hardie,  303. 

V.  Jones,  593. 

V.  Kansas  Loan  &  Trust  Co.,  465,  519. 

V.  Snyder,  256. 
Dwight  V.  Germania  Life  Ins.  Co.,  130,  293,  325,  337,  431. 
Dyer  v.  Piscataqua  F.  &  M.  Ins.  Co.,  358. 

Eads  V.  "Williams,  640. 

Eagle  Ins.  Co.  v.  Lafayette  Ins.  Co.,  720,  734,  737,  740. 

Fames  v.  Home  Ins.  Co.,  48,  55,  77,  84,  105,  408. 

Early  v.  Standard  Life  &  Ace.  Ins.  Co.,  384,  387,  388. 

Eamshaw  v.  Sun  Mut.  Aid  Sec,  764. 

Easley  v.  New  Zealand  Ins.  Co.,  54,  80. 

Easly  V.  New  Zealand  Ins.  Co.,  80. 

Eastabrook  v.  Union  Mut.  Life  Ins.  Co.,  395. 

Eastern  R.  Co.  v.  Relief  Fire  Ins.  Co.,  135,  183,  275,  277,  462,  547,  561, 

565,  595,  718. 
East  Texas  Fire  Ins.  Co.  v.  Brown,  196,  330,  398,  567. 

V.  Coffee,  550,  560. 

V.  Kempner,  233,  234,  243. 

V.  Perkey,  717. 
Ebert  v.  Mutual  Reserve  Fund  Life  Ass'n,  173,  211,  214,  224,  442,  754. 
Eckel  V.  Renner,  687. 

Eclectic  Life  Ins.  Co.  v.  Fahrenkrug,  183,  193. 
Eddy  V.  Hawkeye  Ins.  Co.,  346,  413. 

V.  London  Assur.  Corp.,  430,  440,  642,  678. 
Edgerly  v.  Farmers'  Ins.  Co.,  500. 
Edie  V.  East  India  Co.,  141. 
Edington  v.  Aetna  Life  Ins.  Go.,  779. 

Edison  Gen.  Electric  Co.  v.  Canadian  Pacific  Nav.  Co.,  32. 
Educational  Endowment  Ass'n,  In  re,  757. 

Edwards  v.  Baltimore  Fire  Ins.  Co.,  475,  477,  482,  488,  548,  555,  585. 
592. 


TABLE    OF    CASES.  809 

References  are  to  pages. 

Edwards  v.  Lycoming  Co.  Mut.  Ins.  Co.,  484,  524,  565. 
V.  Mississippi  Valley  Ins.  Co.,  115. 
V.  Travelers'  Life  Ins.  Co.,  496. 
Egan  V.  Oakland  Home  Ins.  Co.,  424. 

V.  Westchester  Ins.  Co.,  233,  234,  243. 
Eggenberger  v.  Guarantee  Mut.  Ace.  Ass'n,  385. 
Eggleston  v.  Council  Bluffs  Ins.  Co.,  469. 
Ehrman  v.  Teutonia  Ins.  Co.,  29. 

Eilenberger  v.  Protective  Mut.  Fire  Ins.  Co.,  82,  192. 
Eiseman  v.  Hawkeye  Ins.  Co.,  450. 
Elder  v.  Grand  Lodge,  A.  O.  U.  W.,  191. 
Eldred  v.  Malloy,  309. 
Eliason  v.  Henshaw,  82. 
Eliot  Five  Cents  Sav.  Bank  v.  Commercial  Union  Assur.  Co.,  407,  432, 

583. 
Elkhart  Mut.  Aid  B.  &  R.  Ass'n  v.  Houghton,  143,  288,  764,  780. 
Elkins  V.  Susquehanna  Mut.  Fire  Ins.  Co.,  295. 
Ellerbe  v.  Faust,  316. 

Elliott  v.  Merchants'  &  Bankers'  Fire  Ins.  Co.,  439,  662. 
Elliott's  Ex'rs'  Appeal,  693,  694. 
Ellis  V.  Albany  Ciiy  Fire  Ins.  Co.,  59,  75. 
V.  Council  Bluffs  Ins.  Co.,  425. 
V.  Insurance  Co.  of  North  America,  398,  710. 
V.  Kreutzinger,  689. 
V.  State  Ins.  Co.,  108,  109. 
Ellsworth  V.  Aetna  Ins.  Co.,  376. 

Elsey  V.  Odd  Fellows'  Mut.  Relief  Ass'n,  144,  685,  691. 
Ely  V.  Ely,  275,  280,  677. 

Embler  v.  Hartford  Steam  Boiler  I.  &  Ins.  Co.,  6. 
Embry's  Adm'r  v.  Harris,  289. 
Emerson  v.  Bemis,  693. 
Emery  v.  Boston  Marine  Ins.  Co.,  46-48,  180. 

V.  Piscataqua  F.  &  M.  Ins.  Co.,  65. 
Employers'  Liability  Assur.  Co.  v.  Commissioner  of  Ins.,  24. 
Employers'  Liability  Assur.  Corp.  v.  Merrill,  5,  6,  436. 

V.  Rochelle,  593,  671. 
Endowment  Rank  K.  P.  v.  Cogbill,  211. 
Endowment  &  Benevolent  Ass'n  v.  State,  5,  12. 
Engebretson  v.  Hekla  Fire  Ins.  Co.,  524,  526,  548,  563,  590,  593,  597. 
English  V.  Franklin  Fire  Ins.  Co.,  366. 
Enos  V.  St.  Paul  F.  &  M.  Ins.  Co.,  261,  529,  567,  599. 

V.  Sun  Ins.  Co.,  215,  238,  240. 
Enright  v.  Montauk  Fire  Ins.  Co.,  630,  638,  641,  642,  649. 


810  TABLE    OF    CASES. 

References  are  to  pages. 

Enterprise  Ins.  Co.  v.  Parisot,  550. 
Equitable  Ace.  Ins.  Co.  v.  Osborn,  398. 
Equitable  Life  Assur.  Co.  v.  Brobst,  160,  185. 

V.  Clements,  116,  138. 

V.  Hiett's  Adm'r,  715. 

V.  McElroy,  47,  53,  83,  318,  348,  707. 

V.  Trimble,  306. 

V.  Winning,  590. 
Equitable  Life  Ins.  Co.  v.  Hazelwood,  212,  221,  231,  326. 
Erb  V.  Fidelity  Ins.  Co.,  220,  441. 

V.  German-American  Ins.  Co.,  355,  403,  536. 
Ermentrout  v.  American  Fire  Ins.  Co.,  677,  678. 

V.  Girard  F.  &  M.  Ins.  Co.,  194,  371,  488,  524,  548,  555,  563,  585, 
590,  593. 
Ernest  v.  Nicholls,  747. 
Ervin  v.  New  York  Cent.  Ins.  Co.,  362. 

Erwin  v.  Springfield  F.  &  M.  Ins.  Co.,  490,  492,  496,  499,  513,  593. 
Essex  Sav.  Bank  v.  Meriden  Fire  Ins.  Co.,  276. 
Estes  V.  Aetna  Mut.  Fire  Ins.  Co.,  168,  207. 
Eureka  Ins.  Co.  v.  Robinson,  61,  77,  456. 
Evans  v.  Opperman,  682. 

V.  Trimountain  Mut.  Fire  Ins.  Co.,  121,  238. 
Evarts  v.  United  States  Mut.  Ace.  Ass'n,  576,  607,  770. 
Everett  v.  Continental  Ins.  Co.,  361,  368. 

V.  Niagara  Ins.  Co.,  761. 
Ewards  v.  Baltimore  Fire  Ins.  Co.,  477. 
Ewell  V.  Daggs,  117. 
Ewing's  Lessee  v.  Burnet,  133. 

Excelsior  Mut.  Aid  Ass'n  v.  Riddle,  522,  524,  764,  767. 
Exchange  Bank  of  Macon  v.  Loh,  286,  287. 

Fabyan  v.  Union  Mut.  Fire  Ins.  Co.,  420. 

Failey  v.  Fee,  126,  144,  757. 

Fair  v.  Manhattan  Ins.  Co.,  363. 

Fairchild  v.  Northwestern  Mut.  Life  Ass'n,  764. 

Fairfield  Packing  Co.  v.  Southern  Mut.  Fire  Ins.  Co.,  409. 

Falconer  v.  Montgomery,  641. 

Fame  Ins.  Co.  v.  Mann,  167,  346. 

V.  Thomas,  200. 
Fame  Ins.  Go's.  Appeal,  721,  724,  729,  736,  737,  746. 
Family  Endowment  Soc.,  In  re,  752,  756. 

Faneuil  Hall  Ins.  Co.  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  721,  731,  735. 
Farmers'  Fire  Ins.  Co.  v.  Mispelhorn,  499,  591,  601. 


i 


TABLE    or    CASES. 


References  are  to  pages. 


811 


Farmers'  Ins.  Co.  v.  Archer,  403. 

V.  Burris,  766. 

V.  Butler,  68. 

V.  McCluckin,  345. 

V.Williams,  221. 
Farmers'  Insurance  &  Loan  Co.  v.  Snyder,  326. 
Farmers'  Lxjan  &  Trust  Co.  v.  Aberle,  188,  257,  757. 

V.  Harmony  F.  &  M.  Ins.  Co.,  365. 
Farmers'  Mut.  Fire  Ins.  Co.  v.  Barr,  428. 

V.  Chase,  256. 

V.  Ensminger,  189. 

V.  Gargett,  529. 

V.  Kryder,  367. 

V.  Moyer,  550. 
Farmers'  Mut.  Ins.  Co.  v.  Graybill,  516,  518. 

V.  Meese,  42. 

V.  New  Holland  Turnpike  Co.,  437. 

V.  Taylor,  155,  163. 
Farmers'  &  Merchants'  Ins.  Co.  v.  Chesnut,  444. 

V.  Graham,  204. 

V.  Wiard,  302,  779. 
Farnum  v.  Phoenix  Ins.  Co.,  155,  249,  293,  408,  558,  560,  561,  586. 
Farr  v.  Grand  Lodge,  A.  O.  U.  W.,  679. 
Farragut  Fire  Ins.  Co.  v.  Shepley,  245. 
Faulkner  v.  Manchester  Fire  Assur.  Co.,  534,  537. 
Faunce  v.  State  Mut.  Life  Assur.  Co.,  96. 
Faust  V.  American  Fire  Ins.  Co.,  263,  349,  415,  567. 
Fay  V.  Richmond,  176. 
Fayerweather  v.  Phenix  Ins.  Co.,  703. 
Fayles  v.  National  Ins.  Co.,  177,  180. 
P^earn  v.  Ward,  132,,  695. 
Feder  v.  Iowa  State  T.  M.  Ass'n,  382. 
Feibelman  v.  Manchester  Fire  Assur.  Co.,  376. 
Felix  V.  Grand  Lodge,  A.  O.  U.  W.,  682. 
Fenn  v.  Lewis,  684. 

V.  New  Orleans  Mut.  Ins.  Co.,  275. 
Fenton  v.  Fidelity  &  Casualty  Co.,  688. 
Ferdon  v.  Canfield,  690. 
Ferguson  v.  Massachusetts  Life  Ins.  Co.,  8. 

V.  Pekin  Plow  Co.,  277,  674. 
Fernandez  v.  Merchants'  Mut.  Ins.  Co.,  374. 
Fern  Holme,  The,  280. 
Ferrer  v.  Home  Mut.  Ins.  Co.,  118. 


812  TABLE    OF    CASES. 

References  are  to  pages. 

Ferris  v.  Home  Life  Assur.  Co.,  345. 

Fidelity  Mut.  Life  Ass'n  v.  Ficlilin,  323,  351,  713. 

V.  Miller,  339. 
Fidelity  T.  &  T.  Co.  v.  People's  Nat.  Gas  Co.,  702. 
Fidelity  &  Casualty  Co.  v.  Ballard  &  Ballard  Co.,  47,  52,  60,  762. 

V.  Chambers,  132,  397. 

V.  Eickhoff,  28,  304,  355,  701,  768,  78L 

V.  Freeman,  761,  769. 

V.  Johnson,  381,  383. 

V.  Loewenstein,  117,  132,  140,  380,  383,  387. 

V.  Sittig,  397. 

V.  Waterman,  387,  388. 
Field  V.  City  of  Des  Moines,  375. 

V.  Insurance  Co.  of  North  America,  281,  347. 
Fillmore  v.  Great  Camp,  K.  of  M.,  550. 
Finch  V.  Modern  Woodmen  of  America,  339,  345,  952,  710. 
Findeisen  v.  Metropole  Fire  Ins.  Co.,  547,  583,  591. 
Fink  V.  Lancashire  Ins.  Co.,  492,  500,  502.  507,  511,  514,  593. 
Finlay  v.  Mexican  Inv.  Corp.,  7. 
Finster  v.  Merchants'  &  B.  Ins.  Co.,  713. 
Fire  Ass'n  of  Philadelphia  v.  Colgin,  640. 

V.  Jones,  524,  557,  561. 

V.  Rosenthal,  117,  139,  438. 
Fire  Ins.  Ass'n  v.  Canada  F.  &  M.  Ins.  Co.,  734. 

Y.  Merchants'  &  Miners'  Transp.  Co.,  277,  676. 
Fire  Ins.  Ass'n  of  England  v.  Merchants'  &  Miners'  Transp.  Co.,  136. 
Fireman's  Fund  Ins.  Co.  v.  Congregation  Rodeph  Sholom,  371,  418. 

V.  Norwood,  150,  184. 
Fireman's  Ins.  Co.  v.  Powell,  279. 

Firemen's  Fund  Ins.  Co.  v.  Western  Refrigerating  Co.,  364. 
Firemen's  Ins.  Co.  v.  Floss,  106. 

V.  Horton,  219,  220. 

V.  Kuessner,  47,  48,  305. 
First  Baptist  Church  v.  Brooklyn  Fire  Ins.  Co.,  188,  190. 
First  Congregational  Church  v.  Holyoke  Mut.  Fire  Ins.  Co.,  405,  414, 

418,  419. 
First  Nat.  Bank  v.  American  Cent.  Ins.  Co.,  410,  580. 

V.  North  America  Ins.  Co.,  333. 
First  Nat.  Bank  of  Devil's  Lake  v.  Lancashire  Ins.  Co.,  261. 

V.  Manchester  Fire  Assur.  Co.,  164,  261. 
First  Nat.  Bank  of  Dubuque  v.  G^tz,  223,  252. 

First  Nat.  Bank  of  Kansas  City  v.  Hartford  Fire  Ins.  Co.,  69,  325. 
First  Nat.  Bank  of  Waxahachie  v.  Lancashire  Ins.  Co.,  236,  365,  366. 


TABLE    OF    CASES.  813 

Keferences  are  to  pages. 

Fischer  v.  American  Legion  of  Honor,  691. 

V.  Hope  Mut.  Life  Ins.  Co.,  722. 

V.  London  &  L.  Fire  Ins.  Co.,  221. 
Fish  V.  Cottenet,  60,  80,  291. 
Fishbeck  v.  Phenix  Ins.  Co.,  715. 
Fisher  v.  Crescent  Ins.  Co.,  346,  434,  524,  561,  604. 

V.  Fidelity  Mut.  Life  Ass'n,  528. 

V.  London  &  L.  Fire  Ins.  Co.,  416. 

V.  Metropolitan  Life  Ins.  Co.,  309. 
Fitch  V.  American  Popular  Life  Ins.  Co.,  325. 
Fitchburg  Sav.  Banlv  v.  Amazon  Ins.  Co.,  409. 
Fitchner  v.  Fidelity  Mut.  Fire  Ass'n,  146,  147,  203. 
Fitzgerald  v.  Metropolitan  Ace.  Ass'n,  209. 

V.  Union  Ins.  Co.,  536. 
Fitzpatrick  v.  Hartford  Life  &  Annuity  Ins.  Co.,  254,  289. 
Flaherty  v.  Continental  Ins.  Co.,  556,  567. 
Flanagan  v.  Camden  Mut.  Ins.  Co.,  765. 
Flanaghan  v.  Phenix  Ins.  Co.,  597. 
Fleisch  v.  Insurance  Co.  of  North  America,  539,  544. 
Fleming  v.  Hartford  Fire  Ins.  Co.,  79,  80,  177. 
Fletcher  v.  Commonwealth  Ins.  Co.,  342. 

V.  German-American  Ins.  Co.,  624. 

V.  New  York  Life  Ins.  Co.,  111. 
Flynn  v.  Equitable  Life  Assur.  Soc,  211,  221,  230. 

V.  Equitable  Life  Ins.  Co.,  176,  342,  349. 

V.  Massachusetts  Ben.  Ass'n,  498,  510,  514. 
Fogg  V.  Middlesex  Mut.  Fire  Ins.  Co.,  686. 
Foley  V.  Manufacturers'  &  B.  F.  Ins.  Co.,  276. 

V.  Royal  Arcanum,  111,  429,  776. 
Follis  V.  United  States  Mut.  Ace.  Ass'n,  397,  764. 
Folsom  V.  Merchants'  Mut.  Marine  Ins.  Co.,  275. 
Foot  V.  Aetna  Life  Ins.  Co.,  130,  132,  134,  135,  230,  341,  403. 
Forbes  v.  American  Mut.  Life  Ins.  Co.,  421. 

V.  Union  Cent.  Life  Ins.  Co.,  302,  303. 
Ford  V.  Buckeye  State  Ins.  Co.,  33. 

V.  United  States  Mut.  Ace.  Relief  Co.,  147,  150,  337,  386. 
Forest  City  Ins.  Co.  v.  Hardesty,  404. 

V.  School  Directors  of  Dist.  No.  1,  296.  • 
Forrester  v.  Gill,  695. 
Ft.  Wayne  Ins.  Co.  v.  Irwin,  695,  769,  771. 
Forward  v.  Continental  Ins.  Co.,  214,  219,  403,  404. 
Foster  v.  Fidelity  &  Casualty  Co.,  455,  458,  463,  485-488. 

V.  Mentor  Life  Assur.  Co.,  733. 


8U 


TABLE    OF    CASES. 


References  are  to  pages. 

Fowle  V.  Springfield  F.  &  M.  Ins.  Co.,  492,  498, 
Fowler  v.  Aetna  Fire  Ins.  Co.,  335. 

V.  Metropolitan  Life  Ins.  Co.,  56,  113,  119,  120,  275,  293,  302. 

V.  Preferred  Ace.  Ins.  Co.,  54,  80,  207,  236. 
Fox  V.  Phoenix  Fire  Ins.  Co.,  275,  276. 
Fraim  v.  National  Fire  Ins.  Co.,  416. 
Frane  v.  Burlington  Ins.  Co.,  232. 
Franklin  Beneficial  Ass'n  v.  Com.,  5. 
Franklin  Fire  Ins.  Co.  v.  Chicago  Ice  Co.,  281,  557. 

V.  Coates,  565. 

V.  Colt,  45,  48,  50,  166. 

V.  Findlay,  279. 

V.  Gruver,  779, 

V.  Hamill,  439. 

V.  Hewitt,  364. 

V.  Martin,  335,  345,  346,  400. 

V.  Taylor,  48. 

V.  Vaughan,  345,  401. 
Franklin  Ins.  Co.  v.  Colt,  88,  93,  100,  244. 

V.  Humphrey,  376. 

V.  Sears,  269. 
Franklin  Life  Ins.  Co.  v.  Hazzard,  285. 

V.  Sefton,  248,  285,  768. 
Fred  Miller  Brewing  Co.  v.  Capital  Ins.  Co.,  760,  768,  770. 

V.  Council  Bluffs  Ins.  Co.,  24,  260. 
Freedman  v.  Providence  Wash.  Ins.  Co.,  200. 
Freeland  v.  Pennsylvania  Cent.  Ins.  Co.,  304. 
Freeman  v.  Mercantile  Mut.  Ace.  Ass'n,  378. 

V.  Travelers'  Ins.  Co.,  778. 
French  v.  Hartford  L.  &  A.  Ins.  Co.,  316,  318. 

V.  People,  37,  171,  173,  262. 
Fried  v.  Royal  Ins.  Co.,  92,  99.  , 

Friesmuth  v.  Agawan  Mut.  Fire  Ins.  Co.,  782. 
Friezen  v.  Allemania  Fire  Ins.  Co.,  404,  409,  426,  660. 
Fritz  V.  Lebanon  Mut.  Ins.  Co.,  551. 

Fromherz  v.  Yankton  Fire  Ins.  Co.,  168,  196,  199,  201,  344,  345. 
Frost's  Detroit  L.  &    W.  W.  Works  v.  Millers'  &  M.  Mut.  Ins.  Co.,  362, 

405,  411. 
Fry  V.  Charter  Oak  Life  Ins.  Co.,  121. 

V.  Provident  Sav.  Life  Assur.  Soc,  756,  758. 
Fudickar  v.  Guardian  Mut.  Life  Ins.  Co.,  639. 
Fugure  v.  Mutual  Soc.  of  St.  Joseph,  209. 
Fullam  v  New  York  Union  Ins.  Co.,  424,  425. 


TABLE    OF    CASES.  815 

References  are  to  page^. 

Fullenwider  v.  Supreme  Council,  R.  L.,  124. 
Fuller  V.  Detroit  F.  &  M.  Ins.  Co.,  497. 

V.  Metropolitan  Life  Ins.  Co.,  120,  284. 
Fulton  V.  Phoenix  Ins.  Co.,  551,  596. 
Funke  V.  Minnesota  Farmers'  Mut.  Fire  Ins.  Ass'n,  408. 
Furlong  v.  Agricultural  Ins.  Co.,  535. 

Gadd  V.  Equitable  Life  Assur.  Soc,  444. 

Galbraith's  Adm'r  v.  Arlington  Mut.  Life  Ins.  Co.,  226. 

Gale  V.  State  Ins.  Co.,  603. 

Gamble  v.  Accident  Assur.  Co.,  451,  459,  470. 

Gandy  v.  Orient  Ins.  Co.,  215,  441. 

Ganong  v.  Aetna  Ins.  Co.,  509. 

Gans  V.  St.  Paul  F.  &  M.  Ins.  Co.,  219,  220,  708. 

Ganser  v.  Fireman's  Fund  Ins.  Cb.,  28,  55,  134,  158,  180. 

Gantt  V.  American  Cent.  Ins.  Co.,  737. 

Garido  v.  American  Cent.  Ins.  Co.,  424. 

Garlick  v.  Mississippi  Valley  Ins.  Co.,  301. 

Garner  v.  Germania  Life  Ins.  Co.,  298,  682. 

Garrison  v.  Farmers'  Mut.  Fire  Ins.  Co.,  132. 

Garver  v.  Hawkeye  Ins.  Co.,  399,  783. 

Gaskarth  v.  Law  Union  Fire  Ins.  Co.,  373. 
Gasser  v.  Sun  Fire  Office,  609,  614,  615,  620. 
Gastonguay  v.  Sovereign  Fire  Ins.  Co.,  535. 
Gates  V.  Madison  County  Mut.  Ins.  Co.,  376. 

Gauch  V.  St.  Louis  Mut.  Life  Ins.  Co.,  682. 

Gauche  v.  London  &  L.  Ins.  Co.,  492,  500,  550,  579,  591,  600,  617. 

Gauthier  v.  Canadian  Mut.  Ins.  Co.,  118. 

Gay  V.  Farmers'  Mut.  Ins.  Co.,  82. 

Gaysvllle  Mfg  Co.  v.  Phoenix  Mut.  Fire  Ins.  Co.,  168,  199,  296. 

Geare  v.  United  States  Life  Ins.  Co.,  776. 

Geisek  v.  Crescent  Mut.  Ins.  Co.,  373. 

Geiss  V.  Franklin  Ins.  Co.,  783,  784. 

Gellatly  v.  Minnesota  Odd  Fellows'  Mut.  Ben.  Soc,  606. 

General  Mut.  Ins.  Co.  v.  Sherwood,  376. 

Gent  V.  Manufacturers'  &  Merchants'  Mutual  Ins.  Co.,  39. 

George  v.  Goldsmiths'  &  G.  B.  Ins.  Ass'n,  7. 

George  Dee  &  Sons  Co.  v.  Key  City  Fire  Ins.  Co.,  552,  597,  615,  628, 

630,  659,  664,  669. 

Georges  v.  Niess,  663. 

Georgia  Home  Ins.  Co.  v.  Allen,  364. 

V.  Goode,  490. 

V.  Jacobs,  189. 


816  TABLE    OF    CASES. 

References  are  to  pages. 

Georgia  Home  Ins.  Co.  v.  Jones,  280. 

V.  Kinnier's  Adm'x,  182,  184,  405,  688. 
V.  Leaverton,  457. 
V,  O'Neal,  541. 
V.  Rosenfield,  407,  717. 
V.  Stein,  648. 
Gerard  F.  &  M.  Ins.  Co.  v.  Frymier,  575. 
Gere  v.  Council  Bluffs  Ins.  Co.,  435,  536,  618. 
Gerhauser  v.  North  British  &  M.  Ins.  Co.,  69,  325,  345. 
Gerling  v.  Agricultural  Ins.  Co.,  586. 

German-American  Ins.  Co.  v.  Commercial  Fire  Ins.  Co.,  363,  783. 
V.  Davis,  149.- 
V.  Divilbiss,  302. 
V.  Etherton,  502,  508. 
V.  Hocking,  762. 
V.  Humphrey,  256. 
V.  Paul,  281,  767. 
V.  Stelger,  619,  628,  665. 
German  Fire  Ins.  Co.  v.  Carrow,  549. 

V.  Columbia  Encaustic  Tile  Co.,  162,  254,  770. 
V.  Eddy,  621. 

V.  Gueck,  146,  147,  586,  588. 
V.  Laggart,  86. 
V.  Roost,  373. 
Germania  Fire  Ins.  Co.  v.  Boykin,  493.^ 
V.  Curran,  28,  464,  466,  539,  675. 
V.  Deckard,  375,  417,  454,  481. 
V.  Frazier,  619,  625,  636. 
V.  Hick,  219. 

V.  Home  Ins.  Co.,  399,  402-404,  688. 
V.  Klewer,  408,  714,  776. 
V.  Thompson,  275,  278. 
Germania  Ins.  Co.  v.  Rudwig,  347. 

V.  Swigert,  36. 
Germania  Life  Ins.  Co.  v.  Koehler,  219,  221,  231,  232. 
V.  Lunkenheimer,  148,  351,  366. 
V.  Peetz,  117,  139. 
German  Ins.  Co.  v.  Davis,  156,  164,  450,  460,  550,  553,  560. 
V.  Eddy,  72,  445. 
V.  Everett,  171,  172,  435. 
V.  Fairbank,  425. 
V.  PYederick,  586. 
V.  Gibson,  591. 


TABLE    OF    CASES.  817 

References  are  to  pages. 

German  Ins.  Co.  v.  Gray,  182,  184,  212,  214,  219,  221,  230,  263,  352, 

408,  561,  567,  576,  596. 

V.  Independent  School  District,  165. 

V.  Luckett,  534. 

V.  Pearlstone,  499,  543. 

V.  Penrod,  232. 

V.  Ward,  522. 

V.  York,  404. 
Gerrish  v.  German  Ins.  Co.,  57,  65,  148. 
Getchell  v.  Aetna  Ins.  Co.,  364. 
Gettleman  v.  Commercial  Union  Assur.  Co.,  399. 
Getz  V.  Equitable  Life  Assur.  Soc,  162. 
Gibb  V.  Philadelphia  Fire  Ins.  Co.,  401,  402. 
Gibbons  v.  German  Ins.  &  Sav.  Institution,  357,  374. 
Gibson  v.  American  Mut.  Life  Ins.  Co.,  396,  510. 

V.  Imperial  Council,  O.  of  U.  F.,  680. 

V.  Manufacturers'  F.  &  M.  Ins.  Co.,  260. 

V.  McGrew,  292. 
Gibson  Electric  Co.  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  717. 
Giddings  v.  Northwestern  Mut.  Life  Ins.  Co.,  137. 

V.  Phoenix  Ins.  Co.,  107,  114. 
Gilbert  v.  North  American  Fire  Ins.  Co.,  404. 

V.  State  Ins.  Co.,  32. 
Gillett  V.  Liverpool  &  L.  &  G.  Ins.  Co.,  409. 
Gilman  v.  Dwelling  House  Ins.  Co.,  280. 
Ging  V.  Cox,  52. 

V.  Travelers'  Ins.  Co.,  390. 
Girard  F.  &  M.  Ins.  Co.  v.  Field,  522. 
Girard  Life  Ins.  Annuity  &  Trust  Co.  v.  Mutual  Life  Ins.  Co.,  118, 

455,  587. 
Girard  Life  Ins.  Co.  v.  Mutual  Life  Ins.  Co.,  312, 
Given  v.  Wisconsin  Odd  Fellows'  Mut.  Life  Ins.  Co.,  86,  226,  684. 
Glass  V.  Walker,  425. 
Glen  V.  Hope  Mut.  Life  Ins.  Co.,  722,  739. 
Glendale  Woolen  Co.  v.  Protection  Ins.  Co.,  674. 
Glens  Falls  Ins.  Co.  v.  Hopkins,  165. 

Glens  Falls  Portland  Cement  Co.  v.  Travellers'  Ins.  Co.,  336. 
Globe  Ace.  Ins.  Co.  v.  Gerisch,  470. 
Globe  Ins.  Co.  v.  Boyle,  146,  147. 
Globe  Mut.  Ben.  Ass'n,  In  re,  19. 
Globe  Mut.  Life  Ins.  Co.  v.  Reals,  150,  350,  351. 

V.  Snell,  82. 

KERR,  INS.—  53 


818  TABLE    OF    CASES. 

References  are  to  pages. 

Glolse  Mut  Life  Ins.  Co.  v.  Wolff,  161,  207,  211,  230,  245,  547,  555, 

717. 
Gloucester  Mfg.  Co.  v.  Howard  Fire  Ins.  Co.,  182,  561. 
Glover  v.  Rochester  German  Ins.  Co.,  656. 
Gnatt  V.  American  Cent.  Ins.  Co.,  738. 
Gnau  V.  Masons'  Fraternal  Ace.  Ass'n,  579,  625,  669. 
Godchaux  v.  Merchants'  Mut.  Ins.  Co.,  715. 
Goddard  v.  East  Texas  Fire  Ins.  Co.,  119. 

V.  King,  640. 

V.  Monitor  Mut.  Fire  Ins.  Co.,  76,  83.  347. 
Godfrey  v.  New  York  Life  Ins.  Co.,  150,  223,  237,  246,  252,  265,  350. 
Gold  V.  Sun  Ins.  Co.,  115,  456,  589. 
Golden  Rule  v.  People,  12,  24. 
Goldin  V.  Northern  Assur.  Co.,  196,  202,  234,  710. 
Goldman  v.  North  British  Mercantile  Ins.  Co.,  333. 
Goldsmith  v.  Home  Ins.  Co.,  36. 
Goldwater  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  185. 
Good  V.  Buckeye  Mut.  Fire  Ins.  Co.,  439. 
Goode  V.  Georgia  Home  Ins.  Co.,  182,  254,  490. 
Goodman  v.  Jedidjah  Lodge  No.  7,  144,  747. 
Goodrich  v.  Treat,  130. 
Goodwillie  v.  McCarthy,  180. 
Goodwin  v.  Massachusetts  Mut.  Life  Ins.  Co.,  557. 

v.  Provident  Sav.  L.  Assur.  Soc,  132,  306,  327. 
Gordon  v.  Massachusetts  F.  &  M.  Ins.  Co.,  278. 

V.  United  States  Casualty  Co.,  102. 

v.  Wright,  278. 
Gore  V.  Canada  Life  Assur.  Co.,  164,  184. 
Gottsman  v.  Pennsylvania  Ins.  Co.,  782, 
Gough  V.  Davis,  534. 

Gould  v.  Dwelling  House  Ins.  Co.,  230,  240,  243,  458,  460,  557,  563,  574, 
578,  579.  581. 

V.  Emerson,  298,  679. 

V.  York  County  Mut.  Fire  Ins.  Co.,  782. 
Gove  V.  Farmers'  Mut.  Fire  Ins.  Co.,  376. 
Grabbs  v.  Farmers'  Mut.  Fire  Ins.  Ass'n,  279. 
Grace  v.  American  Cent.  Ins.  Co.,  141,  206,  208,  268. 

V.  Northwestern  Mut.  Relief  Ass'n,  685. 
Grady  v.  American  Cent.  Ins.  Co.,  86,  156. 
Graham  v.  American  Fire  Ins.  Co.,  219,  220. 

v.  Firemen's  Ins.  Co.,  108,  275,  344,  359. 

v.  Phoenix  Ins.  Co.,  516. 

V.  Stevens,  118. 


TABLE    OF   CASES.  819 

References  are  tc»  pages. 

Grandin  v.  Rochester  German  Ins.  Co.,  118,  132,  365. 

Grand  Lodge  v.  Besterfield,  578. 

Grand  Lodge,  A.  O.  U.  W.  v.  Bagley,  303. 

V.  McKlnstry,  287,  289. 
Grand  Lodge,  I.  O.  M.  A.  v.  Wieting,  395. 
Grand  Rapids  Fire  Ins.  Co.  v.  Finn,  626. 
Grange  Mill  Co.  v.  Western  Assur.  Co.,  281,  588,  677,  704. 
Grangers'  Life  Ins.  Co.  v.  Brown,  138. 
Grant's  Adm'rs  v.  Kline,  287,  680. 
Grattan  v.  Metropolitan  Life  Ins.  Co.,  221,  230,  336,  607. 

V.  National  Life  Ins.  Co.,  288. 
Graves  v.  Horton,  177. 

V.  Merchants'  &  Bankers'  Ins.  Co.,  455. 
Gray  v.  Blum,  574. 

V.  National  Ben.  Ass'n,  44,  221. 
Graybill  v.  Penn.  Township  Mut.  Fire  Ins.  Ass'n,  158,  365. 
Grayson  v.  Willoughby,  745,  746,  748,  751,  752,  754. 
Great  Falls  Mut.  Fire  Ins.  Co.  v.  Harvey,  122,  124. 
Greeff  v.  Equitable  Life  Assur.  Soc,  444,  747,  756. 
Green  v.  Des  Moines  Fire  Ins.  Co.,  546,  574. 

V.  Green,  436,  676. 

v.  Holway,  49. 

V.  Liverpool  &  L.  &  G.  Ins.  Co.,  366. 

V.  Palmer,  766. 
Greenlee  v.  Hanover  Ins.  Co.,  562. 

V.  Iowa  State  Ins.  Co.,  524. 
Greenleaf  v.  Moody,  155,  180,  183,  268. 
Greenville  C.  &  W.  Co.  v.  Planters'  C.  &  W.  Co.,  43. 
Greenwald  v.  Insurance  Co.,  359,  371. 
Greenwich  Ins.  Co.  v.  Dougherty,  417. 

V.  Oregon  Imp.  Co.,  296. 
Greff  V.  Equitable  Life  Assur.  Soc,  758. 
Greiss  v.  State  Inv.  &  Ins.  Co.,  618. 
Gresham  v.  Equitable  Ace.  Ins.  Co.,  379. 
Grier  v.  Northern  Assur.  Co.,  423. 
Griesa  v.  Massachusetts  Ben.  Ass'n,  36. 
Griffey  v.  New  York  Cent.  Ins.  Co.,  136,  402,  483,  687,  689. 
Griffin  v.  Prudential  Ins.  Co.,  315. 

V.  Western  Mut.  Benev.  Ass'n,  390. 
Griffith  v.  New  York  Life  Ins.  Co.,  72. 
Grimbley  v.  Harrold,  759. 
Gristock  v.  Royal  Ins.  Co.,  550,  551,  573,  596. 
Griswold  v.  Sawyer,  683. 


820  TABLE    OF    CASES. 

References  are  te  pages. 

Griswold  v.  Waddington,  20. 

Grobe  v.  Erie  County  Mut.  ins.  Co.,  747. 

Gross  V.  Miller,  388. 

Grousset  v.  Sea  Ins.  Co.,  101. 

Grubbs  v.  North  Carolina  Home  Ins.  Co.,  231,  255. 

V.  Virginia  F.  &  M.  Ins.  Co.,  336. 
Gruber  v.  Grand  Lodge,  A.  O.  U.  W.,  680. 
Guarantee  Co.  v.  Mechanics'  Sav.  Bank  &  T.  Co.,  7. 
Guardian  Mut.  Life  Ins^  Co.  v.  Hogan,  162,  226,  288,  768. 
Gude  V.  Exchange  Fire""lns.  Co.,  164,  167,  196,  199,  200-202» 
Guerin  v.  St.  Paul  F.  &  M.  Ins.  Co.,  713,  769,  771. 
Guerlain  v.  Columbian  Ins.  Co.,  118. 
Guernsey  v.  American  Ins.  Co.,  176. 
Guest  V.  New  Hampshire  Fire  Ins.  Co.,  409. 
Guiterman  v.  German  American  Ins.  Co.,  279. 
Gulf  City  Ins.  Co.  v.  Stephens,  779. 
Gulf,  C.  &  S.  F.  Ry.  Co.  v.  Ellis,  782. 
Gulnare,  The,  280. 
Gundlach  v.  Fischer,  258. 

Gunther  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  119,  416. 
Gushing  v.  Thompson,  676. 
Gustin  V.  Concordia  Fire  Ins.  Co.,  766. 
Guthrie  v.  Armstrong,  260. 

V.  Connecticut  Ind.  Ass'n,  761. 
Gutterson  v.  Gutterson,  690. 

Hacheny  v.  Leary,  38. 

Haden  v.  Farmers'  &  Mechanics'  Fire  Ass'n,  77. 

Haggard  v.  German  Ins.  Co.,  578. 

Hahn  v.  Guardian  Assur.  Co.,  553,  591,  592. 

Haight  V.  Continental  Ins.  Co.,  404. 

Hale  V.  Life  Ind.  &  Inv.  Co.,  325,  328,  689,  765,  775,  777. 

V.  Mechanics'  Mut.  Fire  Ins.  Co.,  121,  236. 
Haley  v.  Manufacturers'  F.  &  M.  Ins.  Co.,  276,  277. 
Hall  V.  Concordia  Fire  Ins.  Co.,  473. 

V.  Dorchester  Mut.  Fire  Ins.  Co.,  688. 

V.  Fire  Ass'n  of  Philadelphia,  648. 

V.  Insurance  Co.  of  North  America,  363,  415. 

V.  Niagara  Fire  Ins.  Co.,  398,  400,  686. 

Y.  Norwalk  Fire  Ins.  Co.,  654. 

T.  People's  Mut.  Fire  Ins.  Co.,  335. 

V.  Philadelphia  Fire  Ass'n,  677. 
Hallock  V.  Commercial  Ins,  Co.,  84,  98,  99,  101,  311. 


TABLE    OF    CASES.  821 

References  are  to  pages. 

Halpin  v.  Aetna  Fire  Ins.  Co.,  421. 

V.  Insurance  Co.  of  North  America,  413. 

V.  Phenix  Ins.  Co.,  411,  421. 
Hamberg  v.  St.  Paul  F.  &  M.  Ins.  Co.,  533,  540,  669. 
Hamblet  v.  City  Ins.  Co.,  76. 
Hambleton  v.  Home  Ins.  Co.,  77,  195,  245. 
Hamburg-Bremen  Fire  Ins.  Co.  v.  Garlington,  139,  441,  446. 
Hamill  v.  Supreme  Council  of  R.  A.,  298. 
Hamilton  v.  Connecticut  Fire  Ins.  Co.,  576. 

V.  Dwelling  House  Ins.  Co.,  332,  400. 

V.  Home  Ins.  Co.,  176,  241,  614,  618. 

V.  Liverpool  &  L.  &  G.  Ins.  Co.,  609,  614,  615,  625,  643,  670. 

V.  Lycoming  Mut.  Ins.  Co.,  82,  85. 

V.  Mutual  Ben.  Life  Ins.  Co.,  308. 

V.  Mutual  Life  Ins.  Co.,  20. 

V.  Phoenix  Ins.  Co.,  143,  478,  551,  576,  577,  602,  631. 
Hamilton  Mut.  Ins.  Co.  v.  Hobart,  746,  751,  752. 
Hammatt  v.  Emerson,  533. 
Hammel  v.  Queen's  Ins.  Co.,  404. 

Hamm  Realty  Co.  v.  New  Hampshire  Fire  Ins.  Co.,  93,  94,  151. 
Hancock  Mut.  Life  Ins.  Co.  v.  Dick,  529. 

V.  Moore,  395. 
Hand  v.  National  Live-Stock  Ins.  Co.,  428. 
Hankins  v.  Rockford  Ins.  Co.,  238,  240,  410. 
Hanna  v.  American  Cent.  Ins.  Co.,  599,  602. 

V.  Connecticut  Mut.  Life  Ins.  Co.,  529. 

V.  Mutual  Life  Ass'n,  341. 
Hannan  v.  Williamsburgh  City  Fire  Ins.  Co.,  362. 
Hanover  Fire  Ins.  Co.  v.  Ames,  268,  269. 

V.  Bohn,  278. 

V.  Dole,  303. 

v.  Gustin,  263,  333.. 

V.  Lewis,  528,  649. 

V.  Mannasson,  361. 

V.  National  Exchange  Bank,  108. 
Hanscom  v.  Home  Ins.  Co.,  534,  536,  546,  549,  715. 
Hansen  v.  American  Ins.  Co.,  536. 
Hanson  v.  Minnesota  S.  R.  Ass'n,  684. 
Harden  v.  Milwaukee  Mechanics'  Ins.  Co.,  483. 
Hardesty  v.  Forest  City  Ins.  Co.,  135. 
Hardie  v.  St.  Louis  Mut.  Life  Ins.  Co.,  86. 
Harding  v.  Norwich  Union  F.  Ins.  Co.,  182,  183,  220,  409. 
Hardwick  v.  State  Ins.  Co.,  55. 


822 


TABLE    OF    CASES. 


References  are  to  pages. 

Hardy  v.  Lancashire  Ins.  Co.,  409. 

Hare  v.  Headley,  598,  701,  704. 

Harkins  v.  Quincy  Mut.  Fire  Ins.  Co.,  457,  493,  499. 

Harle  v.  Council  Bluffs  Ins.  Co.,  165,  167,  20S. 

Harman's  Case,  743,  751. 

Harnden  v.  Milwaukee  Mechanics'  Ins.  Co.,  162,  488. 

Harnickel  v.  New  York  Life  Ins.  Co.,  82,  90,  96,  309. 

Harp  V.  Grangers'  Mut.  Fire  Ins.  Co.,  80. 

Harper  v.  Albany  Mut.  Ins.  Co.,  130,  363,  415. 

Harper's  Adm'r  v.  Phoenix  Ins.  Co.,  379. 

Harrington  v.  Fitchburg  Mut.  Fire  Ins.  Co.,  347. 

Harris  v.  Columbian  County  Mut.  Ins.  Co.,  774. 

V.  Eagle  Fire  Ins.  Co.,  70. 

V.  Equitable  Life  Assur.  Soc,  150,  350. 

V.  New  York  Mut.  Ins.  Co.,  280. 

V.  Phoenix  Ins.  Co.,  72,  150,  549,  551,  586,  712. 

V.  Royal  Canadian  Ins.  Co.,  367,  492. 

V.  Tumbridge,  773. 

V.  Waterloo  Mut.  Fire  Ins.  Co.,  535. 

V.  York  Mut.  Ins.  Co.,  275,  375. 
Harrison  v.  German-American  Fire  Ins.  Co.,  548,  556,  574,  623,  628, 
631,  647,  662,  664. 

-v.  Hartford  Fire  Ins.  Co.,  554,  563,  660,  665,  774. 

V.  Pepper,  10,  436,  676. 
Hart  V.  National  Masonic  Ace.  Ass'n,  337,  386,  764. 

V.  Niagara  Fire  Ins.  Co.,  176,  333. 

V.  Western  R.  Corp.,  448,  700. 
Hartford  Fire  Ins.  Co.  v.  Bonner  Mercantile  Co.,  639,  656. 

V.  Cannon,  436. 

V.  Davenport,  114. 

V.  Farrish,  163. 

V.  Kahn,  565,  566. 

V.  Keating,  219,  551,  562,  567. 

V.  King,  99. 

V.  McKenzie,  100,  165,  166. 

V.  Moore,  336. 

V.  Olcott,  678. 

V.  Orr,  182. 

V.  Raymond,  24,  34. 

V.  Reynolds,  109,  161,  197. 

V.  Small,  709. 

V.  Smith,  261,  487,  492,  524. 
V.  Walsh,  105,  106. 


TABLE    OF    CASES.  823 

References  are  to  pages. 

Hartford  Fire  Ins.  Co.  v.  Webster,  431. 
V.  Wilcox,  44,  258, 
V.  Williams,  440. 
Hartford  Ins.  Co.  v.  Haas,  149. 

Hartford  Life  &  Annuity  Ins.  Co.  v.  Eastman,  189. 
V.  Gray,  111,  344. 
V.  Hayden's  Adm'r,  182,  558,  561. 
V.  Unsell,  315,  547,  707,  709. 
Hartford  Live  Stock  Ins.  Co.  v.  Matthews,  29. 
Hartford  Protection  Ins.  Co.  v.  Harmer,  779. 
Hartford  S.  B.  I.  &  Ins.  Co.  v.  Lasher  Stocking  Co.,  83. 
Hartman  v.  Keystone  Ins.  Co.,  779. 
Hartshorn  v.  Shoe  &  Leather  Dealers'  Ins.  Co.,  291. 
Hartwell  v.  California  Ins.  Co.,  364. 

V.  Penn  Fire  Ins.  Co.,  649. 
Harvey  v.  Cherry,  279. 

Haskin  v.  Agricultural  Fire  Ins.  Co..  47,  53,  80,  99,  161. 
Haskins  v.  Hamilton  Mut.  Ins.  Co.,  439. 
Hass  v.  Mutual  Relief  Ass'n,  121,  124. 
Hastings  v.  Westchester  Fire  Ins.  Co.,  119,  437,  678. 
Hatch  V.  Mutual  Life  Ins.  Co.,  389. 
Hathaway  v.  Orient  Ins.  Co.,  648,  677. 
V.  State  Ins.  Co.,  401. 
V.  Trenton  Mut.  Life  &  Fire  Ins.  Co.,  422. 
Haughton  v.  Ewbank,  156. 
Hausen  v.  Citizens'  Ins.  Co.,  203. 
Havens  v.  Germania  Fire  Ins   Co.,  447. 

V.  Home  Ins.  Co.,  783,  784. 
Haverhill  Ins.  Co.  v.  Prescott,  32,  36. 
Hawley  v.  Michigan  Mut.  Life  Ins.  Co.,  90. 
Haws  V.  Fire  Ass'n  of  Philadelphia,  131,  367,  368. 
Haydel  v.  Mutual  Reserve  Fund  Life  Ass'n,  310,  316. 
Hayes  v.  Milford  Mut.  Fire  Ins.  Co.,  428,  627. 
Hayne  v.  Metropolitan  Trust  Co.,  355. 
Haynie  v.  Knights  Templars  &  M.  Life  Ind.  Co..  116. 
Hazard's  Adm'r  v.  The  New  England  Marine  Ins.  Co.,  141. 
Heald  v.  Builders'  Mut.  Fire  Ins.  Co.,  281. 
Healey  v.  Mutual  Ace.  Ass'n,  5,  383,  388. 
Hearing,  Succession  of,  693. 
Hearn  v.  Equitable  Safety  Ins.  Co.,  114. 
Hearne  v.  Marine  Ins.  Co.,  350. 

v.  New  England  Mut.  Marine  Ins.  Co.,  146,  151. 


824:  TABLE    OF    CASES. 

References  are  to  pages. 

Heasley  v.  Heasley,  691. 

Heath  v.  Springfield  Fire  Ins.  Co.,  203,  204. 

Hebdon  v.  West,  288. 

Hebert  v.  Mutual  Life  Ins.  Co.,  57,  76,  77. 

Hedden  v.  Griffin,  350. 

Heebner  v.  Eagle  Ins.  Co.,  138. 

Heffron  v.  Kittanning  Ins.  Co.,  357,  369. 

Heidenreich  v.  Aetna  Ins.  Co.,  576. 

Heiman  v.  Phoenix  Mut.  Life  Ins.  Co.,  53,  76,  79,  80,  89,  90,  92,  96. 

Heinlein  v.  Imperial  Life  Ins.  Co.,  109,  305. 

Heins  v.  Wicke,  678,  704. 

Helbing  v.  Svea  Ins.  Co.,  536. 

Hellenberg  v.  District  No.  1,  O.  of  B.  B.,  684. 

Helme  v.  Philadelphia  Life  Ins.  Co.,  52,  141. 

Helmetag's  Adm'r  v.  Miller,  286, 

Helvetia  Swiss  Fire  Ins.  Co.  v.  Edward  P.  AUis  Co.,  275,  547,  549, 

551,  588,  594. 
Helwig  V.  Mutual  Life  Ins,  Co.,  530. 
Heman  v.  Britton,  750,  757, 
Henbeau  v.  Great  Camp,  K,  of  M.,  612. 
Henderson  v.  Travelers'  Ins.  Ca,  146. 
Hendrie  &  B.  Mfg.  Co.  v.  Piatt,  694, 
Henning  v.  United  States  Ins.  Co.,  48-50. 
Hepburn  v.  Dunlop,  20. 

Herekenrath  v.  American  Mut.  Ins.  Co.,  721. 
Herman  v.  Phenix  Mut.  Life  Ins.  Co.,  164, 
Hermann  v.  Niagara  Fire  Ins.  Co.,  586. 
Hermany  v.  Fidelity  Mut.  Life  Ass'n,  713. 
Herndon  v.  Imperial  Fire  Ins.  Co.,  651. 
Herrick  V.  Union  Mut.  Fire  Ins.  Co.,  417. 
Herrman  v.  Adriatic  Fire  Ins.  Co.,  412. 
Herron  v.  Peoria  M.  &  F.  Ins.  Co.,  85,  522, 
Hersey  v.  Merrimac  Co,  Mut.  Fire  Ins.  Co.,  69. 
Heuer  v.  Northwestern  Nat.  Ins.  Co.,  370. 
Heusinkveld  v.  St.  Paul  F,  &  M.  Ins.  Co.,  491,  501,  557. 
Hewitt  V.  Watertown  Fire  Ins.  Co.,  364. 
Hews  V.  Atlas  Ins.  Co.,  361,  367. 
Hey  V.  Guarantor's  Liability  Ind.  Co.,  131,  140,  349. 
Heywood  v.  Maine  Mut.  Ace.  Ass'n,  452,  454,  459,  463,  492,  605. 
Hibernia  Ins.  Co.  v.  O'Connor,  86,  565. 
Hibernia  Mut.  Fire  Ins.  Co.  v.  Meyer,  491,  493,  518,  523. 
Hickerson  v.  German-American  Ins.  Co.,  434,  624,  635,  637,  641,  665- 

667,  669. 


TABLE    OF    CASES.  825 

References  are  to  pages. 

Hicks  V.  British  America  Assiir.  Co.,  46,  50,  56,  58,  61,  63,  71,  72,  77, 
115,  117,  140,  143,  150,  163,  231,  244,  456,  549,  586,  712,  769, 
780. 

V.  Farmers'  Ins.  Co.,  410. 
Higgbee  v.  Guardian  Mut.  Life  Ins.  Co.,  120. 
Higgins  V.  Phoenix  Mut.  Life  Ins.  Co.,  340. 
High  Court,  I.  0.  F.  v.  Schweitzer,  191. 
High  Court  of  W.  I.  O.  F.  v.  Commissioner  of  Ins.,  25. 
Highlands  v.  Lurgan  Mut.  Fire  Ins.  Co.,  233.     • 
Hiles  V.  Hanover  Fire  Ins.  Co.,  529. 
Hill  V.  Hartford  Ace.  Ins.  Co.,  388. 

V.  Ohio  Ins.  Co.,  413. 

V.  United  States  Life  Ins.  Ass'n,  283,  680. 
Hillier  v.  Allegheny  County  Mut.  Ins.  Co.,  358,  370. 
Hills  V.  Home  Ins.  Co.,  642,  650. 
Hillyard  v.  Mutual  Ben.  Life  Ins.  Co.,  20. 
Hilt  V.  Metropolitan  Life  Ins.  Co.,  232,  241, 
Hilton  V.  Phoenix  Assur.  Co.,  414.    ' 
Hinckley  v.  Germania  Fire  Ins.  Co.,  356,  492. 
Hines  v.  Mutual  Life  Ins.  Co.,  444. 
Hingston  v,  Aetna  Ins.  Co.,  213. 
Hinman  v.  Hartford  Fire  Ins.  Co.,  468. 
Hiscock  V.  Harris,  657. 
Hitchcock  V.  State  Ins.  Co.,  552,  596. 
Hoadley  v.  Purifoy,  23,  26. 
Hobbs  V.  Iowa  Mut.  Ben.  Ass'n,  125,  313. 
Hobkirk  v.  Phoenix  Ins.  Co.,  148,  712-714,  763,  774. 
Hocking  v.  Howard  Ins.  Co.,  423. 

V.  Virginia  F.  &  M.  Ins.  Co.,  677. 
Hocking  Valley  Coal  Co.  v.  Rosser,  782. 
Hodge  V.  Ellis,  298. 

V.  Security  Ins.  Co.,  90. 
Hodgkins  v.  Montgomery  County  Mut.  Ins.  Co.,  526. 
Hodsdon  v.  Guardian  Life  Ins.  Co.,  779. 
Hoffecker  v.  New  Castle  Co.  Mut.  Ins.  Co.,  487. 
Hoffman  v.  Aetna  Fire  Ins.  Co.,  68,  70,  468. 

V.  Hoke,  682. 

V.  John  Hancock  Mut.  Life  Ins.  Co.,  251,  294. 

V.  Manufacturers'  Ace.  lad.  Co.,  458,  463,  469,  607. 

V.  Western  M.  &  F.  Ins.  Co.,  434. 
Hogben  v.  Metropolitan  Life  Ins.  Co.,  83. 
Hogue  V.  Minnesota  Packing  &  Provision  Co.,  687-689. 
Hohn  V.  Inter-State  Casualty  Co.,  386,  569,  587. 


826  TABLE    OF    CASES. 

References  are  to  pages. 

Hoke  V.  Richie,  349,  504. 

Holbrook  v.  Baloise  Fire  Ins.  Co.,  429. 

V.  St.  Paul  F.  &  M.  Ins.  Co.,  18,  131,  140,  280,  281,  417,  418,  675, 
Holdom  V.  A.  O.  U.  W.,  391. 
Holland  v.  Supreme  Council  of  C.  F.,  120,  144. 

V.  Taylor,  191,  691. 
Hollis  V.  State  Ins.  Co.,  566,  715. 
Holloway  v.  Dwelling  House  Ins.  Co.,  332. 
Holman  v.  Continental  Life  Ins.  Co.,  293. 
Holmes  v.  Charleston  Mut.  Fire  Ins.  Co.,  69,  359. 

V.  Charter  Oak  Ins.  Co.,  138. 

V.  Oilman,  692,  694,  695. 

V.  Phenix  Ins.  Co.,  6,  14,  133,  135. 
Holtzman  v.  Franklin  Ins.  Co.,  372. 
Home  V.  Mutual  Safety  Ins.  Co.,  721. 
Home  District  Mut.  Ins.  Co.  v.  Thompson,  439, 
Home  Fire  Ins.  Co.  v.  Bean,  602,  659. 

V.  Fallon,  212. 

V.  Garbacz,  256. 

V.  Ourney,  212,  220,  233. 

V.  Hammang,  493,  504. 

V.  Kuhlman,  414. 

V.  Wood,  220,  710. 
Home  Forum  Ben.  Order  v.  Jones,  80,  82,  88,  120,  191. 
Home  Ins.  Co.  v.  Adler,  47,  55,  58,  103,  140,  435,  437. 

V.  Baltimore  W.  Co.,  67,  68,  70,  277,  365,  560. 

V.  Boyd,  586. 

V.  Curtis,  245,  295. 

V.  Davis,  483,  488. 

V.  Duke,  219,  767. 

V.  Favorite,  141. 

V.  Field,  280. 

V.  Oilman,  236. 

V.  Karn,  318. 

V.  Lindsey,  470. 

V.  Mendenhall,  219, 

V.  Morse,  760. 

V.  Peoria  &  P.  U.  Ry.  Co.,  277,  674. 

V.  Swigert,  36. 

V.  Winn,  534,  535. 

V.Wood,  235,  412. 
Home  Ins.  &  Banking  Co.  v.  Lewis,  164,  188. 
Home  Life  Ins.  Co.  v.  Pierce,  163,  423. 


TABLE    OF   CASES.  827 

References  are  to  pages. 

Home  Marine  Ins.  Co.  v.  Smith,  726. 

Home  Mut.  Ins.  Co.  v.  Oregon  Ry.  &  Nav.  Co.,  701. 

V.  Roe,  130. 
Hone  V.  Mutual  Safety  Ins.  Co.,  141,  737. 
Hong  Sling  v.  Royal  Ins.  Co.,  426. 

V.  Scottish  U.  &  N.  Ins.  Co.,  651. 
Hood  V.  Hartshorn,  645. 

V.  Manhattan  Fire  Ins.  Co.,  361. 
Hooker  v.  Phoenix  Ins.  Co.,  665. 

V.  Sugg,  682. 
Hooper  v.  California,  23,  25,  171,  173. 

V.  People,  197. 

V.  Robinson,  275,  276,  676. 
Hoose  V.  Prescott  Ins.  Co.,  202,  325,  330,  398. 
Hope  Mut.  Ins.  Co.  v.  Flynn,  307. 
Hope  Oil  M.  C.  &  M.  Co.  v.  Phoenix  Assur.  Co.,  674. 
Hopkins  v.  Hawkeye  Ins.  Co.,  223,  317. 

V.  Phoenix  Ins.  Co.,  420. 
Hopkins  Mfg.  Co.  v.  Aurora  F.  &  M.  Ins.  Co.,  404.  ' 

Hopkinson  v.  Marquis  of  Exeter,  126. 
Horridge  v.  Dwelling  House  Ins.  Co.,  407. 
Horsch  V.  Dwelling  House  Ins.  Co.,  275,  281. 
Hort's  Case,  743,  751,  752. 
Hosford  V.  Germania  Fire  Ins.  Co.,  325. 
Hosmer  v.  Welch,  287-289. 
Hotchkiss  V.  Phoenix  Ins.  Co.,  158. 
Houdeck  v.  Merchants'  &  B.  Ins.  Co.,  718. 
Hough  V.  City  Fire  Ins.  Co.,  169,  400. 

V.  People's  Fire  Ins.  Co.,  278,  437. 
Houghton  V.  Watertown  Fire  Ins.  Co.,  364. 
Hoven  v.  Employers'  Liability  Assur.  Corp.,  380. 
Hovey  v.  American  Mut.  Ins.  Co.,  487. 

V.  Home  Ins.  Co.,  741. 
How  V.  Union  Mut.  Life  Ins.  Co.,  167,  197,  200,  301,  318. 
Howard  v.  Great  Western  Ins.  Co.,  117,  773. 

V.  Metropolitan  Life  Ins.  Co.,  531. 

V.  Mutual  Ben.  Life  Ins.  Co.,  310. 

V.  Refuge  Friendly  Soc,  309. 
Howard  Fire  Ins.  Co.  v.  Bruner,  351. 
Howard  Ins.  Co.  v.  Owen's  Adm'rs,  178,  182. 
Howard's  Case,  103. 

Howell  V.  Knickerbocker  Life  Ins.  Co.,  293,  310. 
Hoyt  V.  Mutual  Ben.  Life  Ins.  Co.,  90. 


828  TABLE    OF    CASES. 

References  are  to  pages. 

Hubbard  v.  Hartford  Fire  Ins.  Co.,  63,  75,  88,  103,  408. 

V.  Mutual  Reserve  Fund  Life  Ass'n,  158,  161,  211,  716,  718. 
V.  North  British  &  Mercantile  Ins.  Co.,  70. 
V.  Turner,  682. 
Huchberger  v.  Home  Fire  Ins.  Co.,  530. 
Huck  T.  Globe  Ins.  Co.,  371. 
Huckins  v.  People's  Mut.  Fire  Ins.  Co.,  376. 
Huesinkveld  v.  St.  Paul  F.  &  M.  Ins.  Co.,  177,  263,  265. 
Huff  V.  Jewett,  537. 
Hughes  V.  Hunner,  756. 

V.  Mercantile  Mut.  Ins.  Co.,  76,  149. 
Humphrey  v.  Hartford  Fire  Ins.  Co.,  430. 
Humphreys  v.  National  Ben.  Ass'n,  379. 
Hunt  V.  New  Hampshire  F.  U.  Ass'n,  723,  737. 
Hurd  V.  Doty,  679,  685. 
Hurlbut  V.  Hurlbut,  697. 
Hurrell  v.  Bullard,  270. 

Hurst  V.  Home  Protection  Fire  Ins.  Co.,  762. 
Hustisford  Farmers'  Mut.  Ins.  Co.  v.  Chicago,  M.  &  St.  P.  Ry.  Co., 

701. 
Huston  V.  State  Ins.  Co.,  361. 
Hutchcraft's  Ex'r  v.  Travelers'  Ins.  Co.,  390. 
Hutchins  v.  Cleveland  Mut.  Ins.  Co.,  322. 
Hutchinson  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  609,  611,  625,  628,  663, 

672. 
Hutchison  v.  Hartford  Life  &  Annuity  Ins.  Co.,  214. 
Hyatt  V.  McMahon,  124. 
Hyde  v.  Goodnow,  38. 
Hynds  v.  Schenectady  County  Mut.  Ins.  Co.,  376. 

Idaho  Forwarding  Co.  v.  Firemen's  Fund  Ins.  Co.,  57,  59,  107,  165, 

166. 
Tde  V.  Phoenix  Ins.  Co.,  565. 
Illinois  Live  Stock  Ins.  Co.  v.  Baker,  711. 
Illinois  Masons'  Benev.  Soc.  v.  Baldwin,  144. 
Illinois  Mut.  Fire  Ins.  Co.  v.  Andes  Ins.  Co.,  275,  674,  736-738. 
Imperial  Fire  Ins.  Co.  v.  American  M.  U.  Exp.  Co.,  370. 

v.  Coos  County,  405,  420. 

V.  Dunham,  185,  331,  400,  688. 

V.  Murray,  435,  565. 

V.  Shimer,  217. 
Imperial  Shale  Brick  Co.  v.  Jewett,  26. 
Improved  Match  Co.  v.  Michigan  Mut.  Fire  Ins.  Co.,  421. 


TABLE   OF    CASES. 


829 


References  are  to  pages. 
Indemnity  Mut.  Marine  Assur.  Co.  v.  United  Oil  Co.,  772. 
Independent  Mut.  Ins.  Co.  v.  Agnew,  180,  375. 
Indiana,  B.  &  W.  Ry.  Co.  v.  Adamson,  176,  177. 
Indiana  Ins.  Co.  v.  Brehm,  357,  653. 
V.  Capehart,  263. 
V.  Hartwell,  192,  198,  206. 
Indiana  Millers'  Mut  Fire  Ins.  Co.  v.  People,  173,  189. 
Inland  Insurance  &  Deposit  Co.  v.  Stauffer,  522,  546. 
Inman  v.  Western  Fire  Ins.  Co.,  482,  484. 
Insurance  Com'r  v.  Provideat  Aid  Soc,  443,  728,  746,  751,  755,  757, 

758. 
Insurance  Co.  v.  Connor,  124. 
V.  Haven,  275,  280, 
V.  Lamkin,  346. 
V.  Newton,  528. 
V.  Stinson,  281. 
Insurance  Co.  of  North  America  v.  Bachler,  446. 
V.  Bird,  16,  46. 

V.  Brim,  454,  475,  478,  548,  585,  593. 
V.  Canada  Sugar-Refining  Co.,  621. 
V.  Caruthers,  554,  592. 
V.  Garland,  714. 
V.  Hibernia  Ins.  Co.,  723,  747. 
V.  Hope,  438. 

V.  McDowell,  420,  432,  524. 
V.  McLimans,  523. 
V.  Martin,  702. 
Insurance  Co.  of  Pennsylvania,  In  re,  138,  265. 
Insurance  Co.  of  State  of  Pennsylvania  v.  Telfair,  729,  738. 
Insurance  Cos.  v.  Boykin,  468,  469. 
Insurance  &  Banking  Co.  v.  Butler,  149. 
International  Trust  Co.  v.  Norwich  Union  Fire  Ins.  Soc,  107,  223, 

254,  255,  280. 
Irish  Catholic  Ben.  Ass'n  v.  O'Shaughnessey,  14. 
Irving  V.  Excelsior  Fire  Ins.  Co.,  528,  532. 
Isaacs  V.  Royal  Ins.  Co.,  101,  103. 
Israel  v.  Teutonia  Ins.  Co.,  536. 

Jackson  v.  British  American  Assur.  Co.,  119. 
V.  Fidelity  &  Casualty  Co.,  427,  428. 
V.  Mutual  Ben.  Life  Ins.  Co.,  155,  234,  246,  252. 
V.  Northwestern  Mut.  Relief  Ass'n,  109. 
V.  St.  Paul  F.  &  M.  Ins.  Co.,  723,  734,  738,  741. 


830  TABLE    OF    CASES. 

References  are  to  pages. 

Jackson  v.  Southern  Mut.  Life  Ins.  Co.,  489. 

V.  State,  38. 
Jackson  County  v.  Boylston  Mut.  Ins.  Co.,  700,  703. 
Jackson  Ins.  Co  v.  Partee,  260. 
Jaeckel  v.  American  Credit  Ind.  Co.,  6. 
James  v.  Lycoming  Ins.  Co.,  406. 

Jameson  v.  Hartford  Fire  Ins.  Co.,  728,  744,  747,  749,  756. 
Jarman  v.  Knights  Templars  &  M.  Life  Ind.  Co.,  116,  127,  128. 
Jefferson  v.  German-American  M'ut.  Life  Ass'n,  578,  588. 
Jefferson  Ins.  Co.  v.  Cotheal,  779. 
Jeffries  v.  Economical  Mut.  Life  Ins.  Co.,  66. 
Jennings  v.  Chenango  County  Mut.  Ins.  Co.,  323,  327,  345. 
Jerdee  v.  Cottage  Grove  Fire  Ins.  Co.,  715. 
Jerrett  v.  John  Hancock  Mut.  Life  Ins.  Co.,  341,  345. 
Jersey  City  Ins.  Co.  v.  Nichol,  440,  529. 
Jervis  v.  Hoyt,  183. 
Johannas  v.  National  Ace.  Soc,  397. 
Johannes  v.  Phenix  Ins.  Co.,  4,  722,  743,  753, 

V.  Standard  Fire  Office,  400. 
John  Davis  &  Co.  v.  Insurance  Co.  of  North  America,  370. 
John  Hancock  Life  Ins.  Co.  v.  Warren,  344. 
John  Hancock  Mut.  Life  Ins.  Co.  v.  Dick,  529. 

V.  Moore,  395,  778. 

V.  Schlink,  219,  248,  251,  252. 
John  Morrill  &  Co.  v.  New  England  Fire  Ins.  Co.,  423. 
John  R.  Davis  Lumber  Co.  v.  Hartford  Fire  Ins.  Co.,  168,  172,  173, 
200,  201. 

V.  Home  Ins.  Co.,  299. 

V.  Scottish  U.  &  N.  Ins.  Co.,  53,  59. 
Johnson  v.  American  Ins.  Co.,  408,  409,  584,  659. 

v.  Berkshire  Mut.  Fire  Ins.  Co.,  358. 

V.  Campbell.  278,  365. 

V.  Connecticut  Fire  Ins.  Co.,  76,  159,  709. 

V.  Dakota  F.  &  M.  Ins.  Co.,  114,  460,  474,  593,  594. 

V.  Goodyear  Min.  Co.,  782. 

V.  Horsford,  299. 

V.  Humboldt  Ins.  Co.,  425,  660. 

V.  Knights  of  Honor,  680,  682. 

V.  London  Guarantee  &  Ace.  Co.,  397. 

V.  New  York  Life  Ins.  Co.,  140. 

V.  Northwestern  Mut.  Life  Ins.  Co.,  19,  310. 

V.  Northwestern  Nat.  Ins.  Co.,  130,  132,  134. 

V.  Norwalk  Fire  Ins.  Co.,  413. 


TABLE    OF    CASES. 


References  are  to  pages. 


831 


Johnson  v.  Pennsylvania  R.  Co.,  777. 

V.  Phoenix  Ins.  Co.,  503,  663. 

V.  Scottish  Union  &  Nat.  Ins.  Co.,  19,  42,  327,  349. 

V.  Van  Epps,  690. 
Johnston  v.  Cheape,  640. 

V.  Columbian  Ins.  Co.,  604. 

V.  Farmers'  Fire  Ins.  Co.,  457,  494. 

V.  Northwestern  Live  Stock  Ins.  Co.,  329,  343. 
Jones  V.  German  Ins.  Co.,  23,  35,  102,  141,  429. 

V.  Granite  State  Fire  Ins.  Co.,  419,  781. 

V.  Howard  Ins.  Co.,  494,  502,  506,  575. 

V.  Insurance  Co.  of  North  America,  334. 

V.  Mechanics'  Fire  Ins.  Co.,  492,  499,  542. 

V.  New  York  Life  Ins.  Co.,  244. 

V.  United  States  Mut.  Ace.  Ass'n,  388,  778. 
Jordan  v.  State  Ins.  Co.,  220. 
Jory  v.  Supreme  Council,  A.  L.  of  H.,  690. 
Joyce  V.  Maine  Ins.  Co.,  335,  418. 

Kahn  v.  Traders'  Ins.  Co.,  491,  493,  550. 

Kahnweiler  v.  Phoenix  Ins.  Co.  of  Brooklyn,  471,  594,  609,  616,  671, 

716,  770. 
Kane  v.  Hibernia  Mut.  Fire  Ins.  Co.,  676. 
Kansas  City  M.  &  B.  R.  Co.  v.  Southern  News  Co.,  6. 
Kansas  Farmers'  Fire  Ins.  Co.  v.  Saindon,  148,  265. 
Karelsen  v.  Sun  Fire  Office,  55,  63,  115,  515,  519,  575. 
Karow  v.  Continental  Ins.  Co.,  778. 
Karthaus  v.  Ferrer,  640. 
Kasten  v.  Interstate  Casualty  Co.,  384,  432. 
Kauffman  v.  Robey,  214. 
Kausal  v.  Minnesota  Farmers'  Mut.  Fire  Ins.  Ass'n,  167,  169,  206, 

209,  212,  219. 
Kautreuer  v.  Penn  Mut.  Life  Ins.  Co.,  86. 
Keary  v.  Miitual  Reserve  Fund  Life  Ass'n,  764. 
Keeler  v.  Niagara  Fire  Ins.  Co.,  519,  520. 
Keeley-Goodfellow  Shoe  Co.  v.  Liberty  Ins.  Co.,  119. 
Keels  v.  Mutual  Reserve  Fund  Life  Ass'n,  528. 
Keene  v.  New  England  Mut.  Ace.  Ass'n,  391,  397. 
Keeney  v.  Home  Ins.  Co.,  405,  511,  578,  593. 
Keim  v.  Home  Mut.  F.  &  M.  Ins.  Co.,  83,  98. 
Keith  V.  Globe  Ins.  Co.,  147,  155. 
Kelley  v.  Life  Insurance  Clearing  Co.,  339. 
V.  Mutual  Life  Ins.  Co.,  Ill,  337. 


832  TABLE    OF    CASES. 

References  are  to  pages. 

Kelley  v.  Worcester  Mut.  Fire  Ins.  Co.,  417. 
Kelley-Goodfellow  Shoe  Co.  v.  Liberty  Ins.  Co.,  332. 
Kelly  V.  Home  Ins.  Co.,  356. 

V.  Metropolitan  Life  Ins.  Co.,  516. 

V.  St.  Louis  Mut.  Life  Ins.  Co.,  92. 

V.  Sun  Fire  Office,  438,  503. 

V.  Supreme  Council  of  Catholic  Mut.  Ben.  Ass'n,  429,  777. 
Kelsey  v.  Universal  Life  Ins.  Co.,  326. 
Kempton  v.  State  Ins.  Co.,  276. 
Kenaston  v.  Lorig,  675. 
Kencht  v.  Mutual  Life  Ins.  Co.,  393. 
Kendall  v.  Holland  Purchase  Ins.  Co.,  565. 

V.  Pacific  Mut.  Life  Ins.  Co.,  191. 
Kendrick  v.  Mutual  Ben.  Life  Ins.  Co.,  781. 

V.  Ray,  121. 
Kennan  v.  Rundle,  41,  746,  748. 

Kennebec  Co.  v.  Augusta  Insurance  &  Banking  Co.,  561. 
Kennedy  v.  New  York  Life  Ins.  Co.,  63. 
Kenney  v.  Home  Ins.  Co.,  507,  688. 
Kenniston  v.  Merrimac  County  Mut.  Ins.  Co.,  372. 
Kensington  Nat.  Bank  v.  Yerkes,  118. 
Kent  V.  Liverpool  &  L.  Ins.  Co.,  364. 
Kenton  Ins.  Co.  v.  Downs,  473. 

V.  Wigginton,  346,  351,  547,  571,  572,  707, 
Kentucky  Life  &  x\ccident  Ins.  Co.  v.  Franklin,  398. 

V.  Hamilton,  283,  680. 
Kentucky  Mut.  Ins.  Co.  v.  Jenks,  92,  94,  95,  101,  294. 
Kentucky  &  L.  Mut.  Ins.  Co.  v.  Southard,  325,  327. 
Kentzler  v.  American  Mut.  Ace.  Ass'n,  458,  459,  466,  485,  486. 
Kenyon  v.  Knights  Templar  &  M.  Mut.  Aid  Ass'n,  131,  294,  337. 
Ketcham  v.  American  Mut.  Ace.  Ass'n,  211,  226,  230,  352. 
Kettenring  v.  Northwestern  Masonic  Aid  Ass'n,  427. 
Kerman  v.  Howard,  683. 

Kernochan  v.  New  York  Bowery  Fire  Ins.  Co.,  700. 
Kerr  v.  Minnesota  Mut.  Ben.  Ass'n,  389, 
Kershaw  v.  Kelsey,  20. 
Key  V.  Des  Moines  Ins.  Co.,  408. 
Keystone  Mut.  Ben.  Ass'n  v.  Norris,  283. 
Kibbe  v.  Hamilton  Mut.  Ins.  Co.,  332. 
Kiernan  v.  Dutchess  County  Mut.  Ins.  Co.,  656,  716, 
Killips  V.  Putnam  Fire  Ins.  Co.,  455,  472,  473,  475,  487,  490,  548,  593, 
Kimball  v.  Aetna  Ins.  Co.,  321. 

V.  Howard  Fire  Ins.  Co.,  477,  782. 


TABLE    OF    CASES. 


References  are  to  pages. 


833 


Kimball  v.  Lion  Ins.  Co.,  77. 

V.  Masons'  Fraternal  Ace.  Ass'n,  429,  454,  463,  469. 

V.  Monarch  Ins.  Co.,  411. 
King  V.  Council  Bluffs  Ins.  Co.,  182. 

V.  Cox,  46,  232. 

V.  Gleason,  42. 

V.  Hekla  Fire  Ins.  Co.,  52,  105,  588. 

V.  Travelers'  Ins.  Co.,  394. 

V.  Watertown  Fire  Ins.  Co.,  426. 
King  Brick  Mfg.  Co.  v.  Phoenix  Ins.  Co.,  327. 
Kings  County  Fire  Ins.  Co.  v.  Swigert,  200. 
Kingsley  v.  New  England  Mut.  Fire  Ins.  Co.,  118,  475. 
Kinney  v.  Baltimore  &  O.  B.  R.  Ass'n,  379,  609. 

V.  Dodd,  289. 
Kirby  v.  Thames  &  Mersey  Ins.  Co.,  157. 

Kircher  v.  Milv/aukee  Mechanics'  Mut.  Ins.  Co.,  417,  418,  429. 
Kirkman  v.  Farmers'  Ins.  Co.,  240,  553,  557,  558,  562. 
Kister  v.  Lebanon  Mut.  Ins.  Co.,  202,  206,  207,  208,  222,  408,  410,  419. 
Kittel  V.  Augusta  T.  &  G.  R.  Co.,  751. 
Klein  v.  New  York  Life  Ins.  Co.,  294,  310. 
Kleis  V.  Niagara  Fire  Ins.  Co.,  53,  56,  98,  146,  148,  762,  774. 
Kline  v.  National  Ben.  Ass'n,  690. 
Klopp  V.  Bernville  Live  Stock  Ins.  Co.,  382. 
Knauer  v.  Globe  Mut.  Life  Ins.  Co.,  177,  188. 
Knecht  v.  Mutual  Life  Ins.  Co.,  338. 
Knickerbocker  Ins.  Co.  v.  Gould,  487. 

V.  McGinnis,  487. 

V.  Norton,  233. 
Knickerbocker  Life  Ins.  Co.  v.  Foley,  393. 

V.  Heidel,  114,  119. 

V.  Norton,  52,  155,  211,  230,  237,  239,  245,  546,  550,  558,  560,  562. 
708,  715. 

V.  Pendleton,  301. 
Knights  of  Honor  v.  Watson,  690. 
Knights  of  Pythias  of  the  World  v.  Bridges,  192. 
Knights  Templar  &  Masons'  Life  Indemnity  Co.  v.  Berry,  28. 
Knopp  V.  National  Fire  Ins.  Co.,  400,  533,  536. 
Knowlton  v.  Homer,  638. 
Knox  V.  Lycoming  Fire  Ins.  Co.,  172. 

V.  Rossi,  49. 
Knudson  v.  Hekla  Fire  Ins.  Co.,  557,  563,  597,  603. 
Koehler  v.  Centennial  Mut.  Life  Ins.  Co.,  682. 
Koelges  v.  Guardian  Life  Ins.  Co.,  248. 
KERR,  INS.— 53 


834  TABLE    OF   CASES, 


Beferences  are  to  pages. 


Kohen  v.  Mutual  Reserve  Fund  Life  Ass'n,  80,  90,  191.  M 

Konrad  v.  Union  Casualty  &  Surety  Co.,  458,  479,  481,  485,  486,  489.  ^ 

Koshland  v.  Fire  Ass'n,  404. 

Kratzenstein  v.  Western  Assur.  Co.,  326,  424. 

Krause  v.  Equitable  Life  Assur.  Soe.,  295. 

Kroeger  v.  Pitcairn,  158,  272. 

Kruger  v.  Western  F.  &  M.  Ins.  Co.,  159,  185. 

Krumm  v.  Jefferson  Fire  Ins.  Co.,  101,  163,  182,  254,  317. 

Kugler,  In  re,  690. 

Kuney  v.  Amazon  Ins.  Co.,  254. 

Kuznik  V.  Orient  Ins.  Co.,  585. 

Kyte  V.  Commercial  Union  Assur.  Co.,  238,  240,  280,  404,  420,  711. 

Lafayette  Ins.  Co.  v.  French,  760. 

La  Force  v.  Williams  City  Fire  Ins.  Co.,  370,  487. 

Ilake  V.  Farmers'  Ins.  Co.,  551,  556,  558,  567,  596,  718. 

Lake  Erie  &  W.  R.  Co.  v.  Griffin,  448. 

La  Marche  v.  New  York  Life  Ins.  Co.,  147. 

Lamb  v.  Bowser,  26,  39. 

v!  Council  Bluffs  Ins.  Co.,  537. 
Lambert  v.  Addison,  126. 

Lamberton  v.  Connecticut  Fire  Ins.  Co.,  150,  239,  546,  561. 
Lamont  v.  Grand  Lodge,  283. 
Lamkin  v.  Travelers'  Ins.  Co.,  576,  588. 

Lamson  C.  Store-Service  Co.  v.  Prudential  Fire  Ins.  Co.,  614,  663. 
Lancashire  Ins.  Co.  v.  Bush,  413,  441,  782. 

V.  Monroe,  588. 
Lancey  v.  Phoenix  Fire  Ins.  Co.,  106. 
Landers  v.  Watertown  Fire  Ins.  Co.,  714. 
Landrum  v.  American  Cent.  Ins.  Co.,  551.  < 

Lane  v.  Maine  Mut.  Fire  Ins.  Co.,  275,  420. 

V.  St.  Paul  F.  &  M.  Ins.  Co.,  450,  453,  455,  475,  503,  511,  555,  578. 
594,  600,  603. 
Lang  V.  Eagle  Fire  Co.,  651. 

V.  Hawkeye  Ins.  Co.,  331,  335. 
Langan  v.  Aetna  Ins.  Co.,  439,  616. 

V.  Royal  Ins.  Co.,  470,  492,  499,  542. 
Langdale  v.  Mason,  375. 

Langdon  v.  Minnesota  Farmers'  Mut.  Fire  Ins.  Ass'n,  402. 
Lange  v.  Lycoming  Fire  Ins.  Co.,  201. 
Langworthy  v.  Garding,  33. 
L'Anse  v.  Fire  Ass'n  of  Philadelphia,  366. 
Lantz  V.  Vermont  Life  Ins.  Co.,  108,  316. 


TABLE    OF   CASES.  835 

References  are  to  pages. 

La  Plant  v.  Firemen's  Ins.  Co.,  428,  594,  671,  716. 
Larkin  v.  Glens  Falls  Ins.  Co.,  117,  139,  438,  44P 

v.  Interstate  Casualty  Co.,  384. 
Larocque  v.  Royal  Ins.  Co.,  535. 
Larson  v.  Fidelity  Mut.  Life  Ass'n,  186. 
Larue's  Assignee  v.  Larue,  697. 
Laselle  v.  Hoboken  Fire  Ins.  Co.,  412. 
Lattan  v.  Royal  Ins.  Co.,  440. 
Lauman  v.  Lebanon  Valley  R.  Co.,  742. 
Lavalle  v.  Societe  St.  Jean  Baptiste,  442. 
Law  V.  New  England  Mut.  Ace.  Ass'n,  428L 
Lawler  v.  Murphy,  120. 
Lawrence  v.  National  Fire  Ins.  Co.,  356. 

V.  Ocean  Ins.  Co.,  491. 
Leach  v.  Republic  Fire  Ins.  Co.,  533. 
Leadbetter  v.  Aetna  Ins.  Co.,  502,  508. 

Leavenworth  County  Com'rs  v.  Chicago,  R.  I.  &  P.  Ry.  Co.,  727. 
Leavitt  v.  Canadian  Pacific  Ry.  Co.,  701. 
Lebanon  Mut.  Ins.  Co.  v.  Erb,  274. 
V.  Hoover,  295. 
V.  Kepler,  329,  437. 
Lee  V.  Agricultural  Ins.  Co.,  419. 

V.  Guardian  Life  Ins.  Co..  161,  211. 
V.  Howard  Fire  Ins.  Co.,  782. 
V.  Massachusetts  F.  &  M.  Ins.  Co.,  67. 
V.  Mutual-  Reserve  Fund  Life  Ass'n,  442. 
Lee  Mut.  Fire  Ins.  Co.  v.  State,  24. 
Lefavour  v.  Insurance  Co.,  100. 
Lehigh  v.  Springfield  F.  &  M.  Ins.  Co.,  503. 
Lehigh  Coal  &  Navigation  Co.  v.  Mohr,  260. 
Lehman  v.  Clark,  292. 

v.  Gunn,  694. 
Leiber  v.  Liverpool,  L.  &  G.  Ins.  Co.,  180,  375,  376. 
Leigh  v.  Springfield  F.  &  M.  Ins.  Co.,  593,  597. 
Leitch  V.  Atlantic  Mut.  Ins.  Co.,  779. 
Leman  v.  Manhattan  Life  Ins.  Co.,  529. 
Leonard  v.  American  Ins.  Co.,  209,  238,  335. 

V.  Clinton,  694. 
Leonarda  v.  Phoenix  Assur.  Co.,  437. 
Le  Roy  v.  Park  Fire  Ins.  Co.,  327. 
Leslie  v.  Knickerbocker  Life  Ins.  Co.,  312. 
Lester  v.  Howard  Bank,  30. 
Lesure  Lumber  Co.  v.  Mut.  Fire  Ins.  Co.,  263,  441,  609,  614,  620,  626, 


836  TABLE    OF    CASES. 

References  are  to  pap:es. 

Levine  v.  Lancashire  Ins.  Co.,  580,  617,  635,  645,  653,  655-658,  666, 

775. 
Levy  V.  Peabody  Ins.  Co.,  604,  715. 
Lewis  V.  Burlington  Ins.  Co.,  522. 
V.  Council  Bluffs  Ins.  Co.,  533. 
V.  Penn  Mut.  Life  Ins.  Co.,  308. 
V.  Phoenix  Mut.  Life  Ins.  Co.,  226,  230,  248,  286. 
V.  Rucker,  69. 

V.  Springfield  F.  &  M.  Ins.  Co.,  371. 
Lewis  Baillie  &  Co.  v.  Western  Assur.  Co.,  671. 
Liberty  Hall  Ass'n  v.  Housatonic  Mut.  Fire  Ins.  Co.,  104. 
Liberty  Ins.  Co.  v.  Boulden,  332. 
Liebenstein  v.  Aetna  Ins.  Co.,  367. 

V.  Baltic  Fire  Ins.  Co.,  362. 
Lieber  v.  Liverpool,  L.  &  G.  Ins.  Co.,  372. 
Life  Ass'n  of  America  v.  Cravens,  304. 
Life  Ins.  Clearing  Co.  v.  O'Neill,  283,  284,  288. 
Light  V.  Countrymen's  Mut.  Fire  Ins.  Co.,  281. 
Lightbody  v.  North  American  Ins.  Co.,  97,  101,  176,  182,  184. 
Limburg  v.  German  Fire  Ins.  Co.,  412,  413. 
Lindauer  v.  Delaware  Mut.  S.  Ins.  Co.,  48. 
Linde  v.  Republic  Fire  Ins.  Co.,  642. 
Linder  v.  Fidelity  &  Casualty  Co.,  196. 
Lindley  v.  Orr,  9. 

Lindner  v.  St.  Paul  F.  &  M,  Ins.  Co.,  446. 
Lindsay  v.  Pettigrew,  62,  271. 

V.  Western  Mut.  Aid  Soc,  110. 
Lindsey  v.  Western  Mut.  Aid  Soc,  117. 
Lingenfelter  v.  Phoenix  Ins.  Co.,  75,  255,  398. 
Linscott  v.  Orient  Ins.  Co.,  350. 
Lipman  v.  Niagara  Fire  Ins.  Co.,  55,  63,  115. 
List  V.  Com.,  25,  171. 

Little  V.  Phoenix  Ins.  Co.,  184,  281,  537,  561. 
Liverpool  &  G.  W.  Steam  Co.  v.  Phenix  Ins.  Co.,  140. 
Liverpool  &  L.  &  G.  Ins.  Co.  v.  Clunie,  23,  25. 
V.  Colgin,  346,  621. 
V.  Creighton,  618. 
V.  Ende,  186,  714. 
V.  Goehring,  653,  655,  657,  667. 
V.  Kearney,  333. 
V.  McNeill,  277. 
V.  Sorsby,  598. 
V.  Van  Os,  215,  219,  415. 


TABLE    OF    CASES.  837 

References  are  to  pages. 

Livingston  v.  Maryland  Ins.  Co.,  141. 

Lobdill  V.  Laboring  Men's  Mut.  Aid  Ass'n,  386,  447. 

Locke  V.  North  American  Ins.  Co.,  342. 

Lockhart  v.  Cooper,  275. 

Lockwood  V.  Bishop,  18,  682. 

V.  Middlesex  Mut.  Assur.  Co.,  105,  477,  484,  51^,  578. 
Loeb  V.  American  Cent.  Ins.  Co.,  516,  523,  549,  556,  569. 
Loeffler  v.  Modern  Woodmen,  124,  759. 
Loehner  v.  Home  Mut.  Ins.  Co.,  230. 
Lohnes  v.  Insurance  Co.  of  North  America,  524,  563. 
London  Assurance  v.  Companhia  De  Moagens  Do  Barreiro,  135,  137. 
London  Assur.  Corp.  v.  Thompson,  729. 
London  Life  Ins.  Co.  v.  Wright,  48. 
London  &  L.  Fire  Ins.  Co.  v.  Fischer,  416, 

V.  Gerteson,  196. 

V.  Lycoming  Fire  Ins.  Co.,  729,  736. 

V.  Storrs,  150,  602,  623,  630. 

V.  Turnbull,  408. 
Long  Creek  Bldg.  Ass'n  v.  State  Ins.  Co.,  246,  297. 
Longueville  v.  Western  Assur.  Co.,  368. 
Loomis  V.  Eagle  L.  &  H.  Ins.  Co.,  288. 

V.  Rockford  Ins.  Co.,  783, 
Looney  v.  Looney,  281. 
Lord  V.  American  Mut.  Ace.  Ass'n,  379. 

V.  Ball,  288. 

V.  Godard,  533, 
Lorscher  v.  Supreme  Lodge  K.  of  H.,  82,  88,  89,  92,  191,  453,  520. 
Louck  V.  Orient  Ins.  Co.,  347. 
Lounsbury  v.  Protection  Ins.  Co.,  507,  514. 
Love  V.  Clune,  44,  685. 
Lovejoy  v.  Augusta  Mut.  Fire  Ins.  Co.,  782. 

V.  Hartford  Fire  Ins.  Co.,  522. 
Lovelace  v.  Travelers'  Protective  Ass'n,  381,  397.  v 

Lovell  v.  St.  Louis  Mut.  Life  Ins.  Co.,  308,  443,  747,  750,  752,  754,  756. 
Loventhal  v.  Home  Ins.  Co.,  400. 
Lovewell  v.  Westchester  Fire  Ins.  Co.,  364. 
Lovick  V.  Providence  Life  Ass'n,  110. 
Lowe  V.  Union  Cent.  Life  Ins.  Co.,  344,  345. 
Lowell  V.  Middlesex  Mut.  Fire  Ins.  Co.,  226. 
Lowry  v.  Insurance  Co.  of  North  America,  765. 

V.  Lancashire  Ins.  Co.,  550,  558,  560. 
Loy  V.  Home  Ins.  Co.,  404. 
Lubrano  v.  Imperial  Council  0.  U.  F.,  13,  24. 


S38  TABLE    OF    CASES. 

References  are  to  pages. 

Lucas  V.  Liverpool  &  L.  &  G.  Ins.  Co.,  365. 

Luce  V.  Dorchester  Mut.  Fire  Ins.  Co.,  69,  419. 

Lucena  v.  Craufurd,  3. 

Lumbermen's  Mut.  Ins.  Co.  v.  Bell,  148,  517. 

Lungstrass  v.  German  Ins.  Co.,  176,  183. 

Luthe  V.  Farmers'  Mut.  Fire  Ins.  Co.,  39,  42,  121. 

Lutz  V.  Linthicum,  640. 

Lycoming  County  Ins.  Co.  v.  Updegraff,  367,  600. 

Lycoming  Fire  Ins.  Co.  v.  Dunmore,  565. 

V.  Jaclison,  276,  327. 

V.  Langley,  133,  225,  230. 

V.  Rubin,  70,  344. 

V.  Schwenk,  375. 

V.  Ward,  192,  206,  294,  296. 

V.  Woodworth,  160. 

V.Wright,  33. 
Lycoming  Ins.  Co.  v.  Mitchell,  69,  70. 
Lycoming  Mut.  Ins.  Co.  v.  Sailer,  359,  775. 
Lyman  v.  State  Mut.  Fire  Ins.  Co.,  406. 
Lynchburg  Fire  Ins.  Co.  v.  West,  347. 
Lyndsay  v.  Niagara  Dist.  Mut.  Fire  Ins.  Co.,  237. 
Lynn  v.  Burgoyne,  86. 

Lynn  Gas  &  Electric  Co.  v.  Meriden  Fire  Ins.  Co.,  357,  359,  370. 
Lyon  V.  Railway  Passenger  Assur.  Co.,  485. 

T.  Stadacona  Ins.  Co.,  223. 

V.  Travelers'  Ins.  Co.,  296,  709. 
Lyons  v.  Providence  Wash.  Ins.  Co.,  367. 

V.  Yerex,  682. 

McAllaster  v.  Niagara  Fire  Ins.  Co.,  439,  661. 

McAllister  v.  New  England  Mut.  Life  Ins.  Co.,  300. 

McArthur  v.  Home  Life  Ass'n,  176,  265. 

McBride  v.  Republic  Fire  Ins.  Co.,  565,  588. 

McCabe  v.  Aetna  Ins.  Co.,  45,  51,  52,  60,  105,  107,  159,  223,  242,  312. 

McCanna  v.  Citizens'  Trust  &  Surety  Co.,  32. 

McCanna  &  Eraser  Co.  v.  Citizens'  T.  &  S.  Co.,  180. 

McCarthy  v.  Catholic  K.  &  L.  of  A.,  336. 

v.  New  England  Order  of  Protection,  289. 
McCarty  v.  New  York  Life  Ins.  Co.,  159,  223. 
McCarvel  v.  Phenix  Ins.  Co.,  572,  578,  581,  582. 
McCauley's  Appeal,  683. 

McClave  v.  Mutual  Reserve  Fund  Life  Ass'n,  90. 
McCleary  v.  Orient  Ins.  Co.,  234. 


1 


TABLE    OF   CASES. 


Referonces  are  to  pages. 


839 


McCluer  v.  Girard  F.  &  M.  Ins.  Co.,  368. 
McClure  v.  Mississippi  Valley  Ins.  Co.,  256. 
McCollum  V.  Hartford  Fire  Ins.  Co.,  457, 
V.  Liverpool,  L.  &  G.  Ins.  Co.,  263. 
V.  North  British  &  Mercantile  Ins.  Co.,  563. 
McConnell  v.  Provident  Sav.  Life  Assur.  Soc,  309. 
McCormick  v.  Orient  Ins.  Co.,  146. 

V.  Springfield  F.  &  M.  Ins.  Co.,  717. 
McCoy  V.  Metropolitan  Life  Ins.  Co.,  211,  230. 

V.  Northwestern  Mut.  Relief  Ass'n,  44,  144. 
McCracken  v.  Hayward,  116. 
McCulloch  V.  Norwood,  332. 
McCullouch  V.  Eagle  Ins.  Co.,  65. 
McCullough  V.  Expressman's  Mut.  Ben.  Ass'n,  386. 

V.  Phoenix  Ins.  Co.,  524,  633,  635,  641,  667. 
McCully's  Adm'r  v.  Phoenix  Mut.  Life  Ins.  Co.,  79,  86,  95. 
McCutcheon  v.  Rivers,  309. 
McCutcheon's  Appeal,  693. 
McDermott  v.  Centennial  Mut.  Life  Ass'n,  682. 

V.  Lycoming  Fire  Ins.  Co.,  484. 
McDonald  v.  Jackson,  429. 

V.  Metropolitan  Life  Ins.  Co.,  222. 
V.  Royal  Ins.  Co.,  157. 
McDonnell  v.  Alabama  G.  L.  Ins.  Co.,  307. 
McElroy  v.  British  American  Assur.  Co.,  168,  206,  714. 
V.  Continental  Ins.  Co.,  426. 

V.  John  Hancock  Mut.  Life  Ins.  Co.,  466,  470,  477,  569. 
McElwee  v.  New  York  Life  Ins.  Co.,  684. 
McEvers  v.  Lawrence,  481,  484. 

McEwen  v.  Montgomery  County  Mut.  Ins.  Co.,  182. 
McFarland  v.  Peabody  Ins.  Co.,  428. 

V.  Railway  O.  &  B.  Ace.  Ass'n,  424,  427. 

V.  United  States  Mut.  Ace.  Ass'n,  477,  484,  485,  487,  490,  495. 
McFetridge  v.  Phoenix  Ins.  Co.,  399. 
McGannon  v.  Michigan  Millers'  Mut.  Fire  Ins.  Co.,  333. 
McGinley  v.  United  States  Life  Ins.  Co.,  392. 
McGlinchey  v.  Fidelity  &  Casualty  Co.,  381. 
McGlother  v.  Providence  Mut.  Ace.  Co.,  387,  388. 
McGowan  v.  People's  Mut.  Fire  Ins.  Co.,  783. 

v.  Supreme  Court,  I.  O.  of  F.,  322,  345. 
McGraw  v.  Germania  Fire  Ins.  Co.,  514,  539. 
McGregor  v.  Insurance  Co.  of  Pennsylvania,  140. 
McGuire  v:  Hartford  Fire  Ins.  Co.,  242,  524. 


S-iiO  TABLE    OF    CASES. 

References  are  to  pages. 

McGurk  V.  Metropolitan  Life  Ins.  Co.,  183,  214,  219,  337,  716. 

Mclntyre  v.  Michigan  State  Ins.  Co.,  238. 

Mack  V.  Lancashire  Ins.  Co.,  435,  533. 

McKean  v.  Biddle,  124,  728,  747,  751,  756,  758. 

McKee  v.  Susquehanna  Mut.  Fire  Ins.  Co.,  429,  539,  543,  544,  678. 

McKenty  v.  Universal  Life  Ins.  Co.,  8. 

McKenzie  v.  Scottish  U.  &  N.  Ins.  Co.,  333. 

McKim  V.  Phoenix  Ins.  Co.,  69. 

McKinley  v.  Bankers'  Ace.  Ins.  Co.,  386. 

McKinney,  In  re,  284,  697. 

McKinnon  v.  Vollmar,  151. 

McLanahan  v.  Universal  Ins.  Co.,  779. 

McLaughlin  v.  Washington  County  Mut.  Ins.  Co.,  450. 

McLean  v.  Hess,  281,  692,  695. 

McMahon  v.  Travelers'  Ins.  Co.,  296. 

McManus  v.  Western  Assur.  Co.,  513,  668. 

McMaster  v.  Insurance  Co.  of  North  America,  528. 

V.  New  York  Life  Ins.  Co.,  158,  303,  309. 
McNally  v.  Phoenix  Ins.  Co.,  405,  466,  487,  495,  502,  507,  511,  512,  688. 
McNamara  v.  Dakota  P.  &  M.  Ins.  Co.,  136. 
McNees  v.  Southern  Ins.  Co.,  615,  625,  627,  665. 
McNeil  V.  Southern  T.  M.  Relief  Ass'n,  124. 
McNeilly  v.  Continental  Life  Ins.  Co.,  259. 
McPike  V.  Western  Assur.  Co.,  489. 
McQueeny  v.  Phoenix  Ins.  Co.,  782,  783. 
Mc Williams  v.  Cascade  F.  &  M.  Ins.  Co.,  332. 
Macy  V.  Whaling  Ins.  Co.,  141. 
Maddox  v.  Dwelling  House  Ins.  Co.,  461,  526. 
Maher  v.  Hibernia  Ins.  Co.,  146,  294,  529,  533,  534. 
Mahr  v.  Bartlett,  687,  689. 
Maier  v.  Fidelity  Mut.  Ins.  Ass'n,  211,  230. 
Maine  Guarantee  Co.  v.  Cox,  33. 
Maisel  v.  Fire  Ass'n  of  Philadelphia,  362, 
Malicki  v.  Chicago  Guaranty  Fund  Life  Soc,  345,  393. 
Malleable  Iron  Works  v.  Phoenix  Ins.  Co.,  169. 
Mallette  v.  British  American  Assur.  Co.,  105,  107, 
Mallory  v.  Ohio  Farmers'  Ins.  Co.,  299,  317. 

T.  Travelers'  Ins.  Co.,  777. 
Mallough  V.  Barber,  268. 
Manchester  v.  Guardian  Assur.  Co.,  60,  232. 
Manchester  Fire  Assur.  Co.  v.  Abrams,  330. 

V.  Feibelman,  357,  360,  364,  446. 
Manchester  Fire  Ins.  Co.  v.  Herriott,  24. 


TABLE    OF    CASES.  841 

References  are  to  pages. 

Manchester  Fire  Ins.  Co.,  v.  Simmons,  665. 
Manchester  &  L.  Life  Assur.  &  Loan  Ass'n,  In  re,  743,  752. 
Mandego  v.  Centennial  Mut.  Life  Ass'n,  306,  431. 
Mandell  v.  Fidelity  &  Casualty  Co.,  437,  458,  464,  486,  487. 
Manhattan  Fire  Ins.  Co.  v.  Weill  Ullman,  183. 
Manhattan  Ins.  Co.  v.  Stein,  520. 

V.  Webster,  148,  279. 
Manhattan  Life  Ins.  Co.  v.  Carder,  347. 

V.  Le  Pert,  311. 

V.  Warwick,  259. 
Mann  v.  Western  Assur.  Co.,  514. 
Manning  v.  Ancient  Order  of  U.  W.,  690. 
Manson  v.  Grand  Lodge  A.  O.  U.  W.,  109,  141,  144,  313. 
Manufacturers'  Ace.  Ind.  Co.  v.  Dorgan,  341,  379,  397,  398. 
Manufacturers'  F.  &  M.  Ins.  Co.  v.  Western  Assur.  Co.,  725,  730,  735. 
Manufacturers'  &  B.  Fire  Ins.  Co.  v.  Mullen,  642,  650. 
Manufacturers'  &  Merchants'  Mut.  Ins.  Co.  v.  Gent,  209. 

V.  Zeitinger,  343,  526. 
March  v.  Metropolitan  Life  Ins.  Co.,  344,  345,  349. 
Marcus  v.  St.  Louis  Mut.  Life  Ins.  Co.,  190. 
Marden  v.  Hotel  Owners'  Ins.  Co.,  138. 
Maril  v.  Connecticut  Fire  Ins.  Co.,  415. 
Marine  Ins.  Co.  v.  St.  Louis,  I.  M.  &  S.  Ry.  Co.,  38. 
Mark  v.  National  Fire  Ins.  Co.,  619. 

Markey  v.  Mutual  Ben.  Life  Ins.  Co.,  54,  89,  96,  155,  160,  193. 
Marks  v.  Hope  Mut.  Life  Ins.  Co.,  63. 
Marsden  v.  City  &  County  Assur,  Co.,  565. 
Marsh  v.  Supreme  Council,  A.  L.  of  H.,  690. 
Marston  v.  Kennebec  Mut.  Life  Ins.  Co.,  Ill,  172,  212,  773. 
Marten  v.  Mutual  Fire  Ins.  Co.,  125. 
Marthinson  v.  North  British  &  M.  Ins.  Co.,  519,  586. 
Martin  v.  Capital  Ins.  Co.,  414,  419. 

V.  Equitable  Ace.  Ass'n,  378. 

V.  Manufacturers'  Ace.  Ind.  Co.,  136,  452,  491,  550. 

V.  State  Ins.  Co.,  335. 

V.  Stubbings,  285. 
Martine  v.  International  Life  Assur.  Soc,  164,  258,  260. 
Marts  V.  Cumberland  Mut.  Fire  Ins.  Co.,  403,  404. 
Mi.rtz  V.  Detroit  F.  &  M.  Ins.  Co.,  522. 
Marvin  v.  Universal  Life  Ins.  Co.,  236,  238,  243. 

V.  Wilber,  177. 
Marx  V.  Travelers'  Ins.  Co.,  397. 
Maryland  Fire  Ins.  Co.  v.  Gusdorf,  162,  239,  367. 


842  TABLE    OP^    CASES. 

References  are  to  pages. 

Maryland  Home  Fire  Ins.  Co.  v.  Kimmell,  438,  762. 
Mascott  V.  Granite  State  Fire  Ins.  Co.,  136. 
Mason  v,  Cronk,  443,  724,  727,  747,  751,  755. 

V.  Franklin  Fire  Ins.  Co.,  141. 

V.  Joseph,  256,  267, 

V.  Skurray,  360. 
Massachusetts  Ben.  Life  Ass'n  v.  Robinson,  211,  300,  303,  314,  343. 

V.  Sibley,  781. 
Massachusetts  Life  Ins.  Co.  v.  Eshelman,  214. 
Massasoit  Steam  Mills  Co.  v.  Western  Assur.  Co.,  75. 
Masters  v.  Madison  County  Mut.  Ins.  Co.,  334. 
Masterson  v.  Howard,  20. 

Mathers  v.  Union  Mut.  Ace.  Ass'n,  46,  51,  52,  76,  158,  173. 
Mathews  v.  Howard  Ins.  Co.,  376. 

V.  St.  Louis  &  S.  F.  Ry.  Co.,  701. 
Matlack  v.  Mutual  Life  Ins.  Co.,  308,  690. 
Matt  V.  Roman  Catholic  Mut.  Protective  Soc,  44. 
Matthes  v.  Imperial  Ace.  Ass'n,  398. 

Matthews  v.  American  Cent.  Ins.  Co.,  131,  135,  142,  298,  427,  450,  452, 
464,  469,  516. 

V.  American  Ins.  Co.,  305. 
Mattoon  Mfg.  Co.  v.  Oshkosh  Mut.  Fire  Ins.  Co.,  15,  75,  76. 
Mauger  v.  Holyoke  Mut.  Fire  Ins.  Co.,  131. 
Mawhinney  v.  Southern  Ins.  Co.,  367. 
Maxcy  v.  New  Hampshire  Fire  Ins.  Co.,  678,  765. 
May  V.  Western  Assur.  Co.,  167,  170. 
Mayher  v.  Manhattan  Life  Ins.  Co.,  685. 

Maynard  v.  Locomotive  Engineers'  Mut.  L.  &  A.  Ins.  Ass'n,  144,  379. 
Meacham  v.  New  York  State  Mut.  Ben.  Ass'n,  338,  778. 
Mead  v.  Northwestern  Ins.  Co.,  118. 

V.  Stirling,  126. 

V.  Westchester  Fire  Ins.  Co.,  146,  149. 
Meadows  v.  Pacific  Mut.  Life  Ins.  Co.,  390. 
Mechanics'  Ins.  Co.  v.  Hodge,  628,  632. 

V.  Thompson,  334. 
Mechanics'  Sav.  Bank  &  Trust  Co.  v.  Guarantee  Co.,  13. 
Mechanics'  &  Traders'  Ins.  Co.  v.  Floyd,  332,  416. 

V.  Mutual  Real  Estate  &  Building  Ass'n,  245. 
Mecke  v.  Life  Ins.  Co.,  114. 
Medearis  v.  Anchor  Mut.  Fire  Ins.  Co.,  98. 
Medina  v.  Builders'  Mut.  Fire  Ins.  Co.,  362. 
Mehlin  v.  Mutual  Reserve  Fund  Life  Ass'n,  196. 


TABLE    OF    CASES.  843 

References  are  to  pages. 

Mengel  v.  Northwestern  Mut.  Life  Ins.  Co.,  338. 

Menk  v.  Home  Ins.  Co.,  220,  360. 

Menneiley  v.  Employers'  Liability  Assur.  Corp.,  388. 

Mercantile  Ins.  Co.  v.  Holthaus,  574. 

Mercantile  Mut.  Ins.  Co.  v.  Folsom,  99. 

V.  Hope  Ins.  Co.,  165,  727. 
Merchants'  Bank  v.  State  Bank,  177. 
Merchants'  Ins.  Co.  v.  Gibhs,  503,  506,  507,  511,  569. 

V.  New  Mexico  Lumber  Co.,  156,  161,  216. 

V.  Prince,  141. 

V.  Reichman,  576. 

V.  Story,  704. 

V.  Union  Ins.  Co.,  89,  94,  169,  722.  ^ 

Merchants'  Mut.  Ins.  Co.  v.  Lyman,  53,  56,  134. 

V.  New  Orleans  Mut.  Ins.  Co.,  721,  737,  739,  740.' 
Merchants'  &  Mechanics'  Ins.  Co.  v.  Linchey,  138. 

V.  Schroeder,  329. 

V.  Vining,  523,  587. 
Merchants'  &  Miners  Transp.  Co.  v.  Borland,  693,  695. 
Merchants'  &  Tradesman's  Assur.  Soc,  In  re,  747,  751. 
Merrett  v.  Farmers'  Ins.  Co.,  281. 
Merrill  v.  Agricultural  Ins.  Co.,  330. 

V.  Insurance  Co.  of  North  America,  533. 
Merritt  v.  Merritt,  639. 

Merserau  v.  Phoenix  Mut.  Life  Ins.  Co.,  209,  236,  238. 
Messelback  v.  Norman,  161,  211. 
Mesterman  v.  Home  Mut.  Ins.  Co.,  170. 
Metropolitan  Ace.  Ass'n  v.  Clifton,  212. 

V.  Froiland,  388. 
Metropolitan  Life  Ins.  Co.  v.  McNall,  22. 

V.  O'Brien,  690. 

V.  McTague,  341. 

V.  McTeague,  109. 
Meyer  v.  Fidelity  &  Casualty  Co.,  383,  385. 

V.  Insurance  Co.  of  North  America,  457,  499,  542,  606. 

V.  Manhattan  Life  Ins.  Co.,  308. 
Meyers  v.  Woodmen  of  the  World,  341. 
Meyerson  v.  Hartford  Fire  Ins.  Co.,  635. 
Michael  v.  Mutual  Ins.  Co.,  260. 
Michel  V.  American  Cent.  Ins.  Co.,  642,  647. 
Michigan  F.  &  M.  Ins.  Co.  v.  Wich,  254. 
Michigan  Mut.  Ben.  Ass'n  v.  Rolfe,  683. 
Michigan  Mut.  Life  Ins.  Co.  v.  Reed,  150,  350,  351. 


844:  TABLE    0¥   CASES. 

References  are  to  pages. 
Michigan  Pipe  Co.  v.  Michigan  F.  &  M.  Ins.  Co.,  46,  53,  76,  78,  98,  168, 
170,  360. 
V.  North  British  &  M.  Ins.  Co.,  78. 
Michigan  Shingle  Co.  v.  London  &  L.  Fire  Ins.  Co.,  334,  335. 
V.  Pennsylvania  Fire  Ins.  Co.,  158. 
V.  State,  Inv.  &  Ins.  Co.,  158,  334,  352,  714. 
Milburn  Wagon  Co.  v.  Evans,  278. 
Milkman  v.  United  Mut.  Ins.  Co.,  305. 
Miller  v.  Alliance  Ins.  Co.,  347. 

V.  American  Mut.  Ace.  Ins.  Co.,  40,  397. 
v.  Brooklyn  Life  Ins.  Co.,  244. 
V.  Eagle  L.  &  H.  Ins.  Co.,  288. 

V.  Hartford  Fire  Ins.  Co.,  409,  471,  479,  491,  493,  496,  499,  542,  714. 
V.  Hillsborough  Mut.  Fire  Assur.  Ass'n,  209. 
V.  Insurance  Co.,  131. 
V.  Mutual  Ben.  Life  Ins.  Co.,  186,  358,  779. 
V.  Travelers'  Ins.  Co.,  393. 
V.  Union  Cent.  Life  Ins.  Co.,  293,  298. 
Miller's  Case,  753. 
Mills  V.  Farmers'  Ins.  Co.,  276,  364. 
Millville  Mut.  F.  &  M.  Ins.  Co.  v.  Collerd,  90. 
Millville  Mut.  M.  &  F.  Ins.  Co.  v.  Mechanics'  &  W.  B.  &  L.  Ass'n,  182, 

186. 
Milne  v.  Northwestern  Life  Assur.  Co.,  444. 
Milner  v.  Bowman,  687. 

Milwaukee  Mechanics'  Ins.  Co.  v.  Brown,  159,  517. 
V.  Graham,  16,  47,  78. 
V.  Winfield,  523,  586,  587,  590. 
Milwaukee  &  St.  P.  Ry.  Co.  v.  Kellogg,  378. 
Miner  v.  Phoenix  Ins.  Co.,  169. 
Minneapolis,  St.  Paul  &  S.  S.  M.  Ry.  Co.  v.  Home  Ins.  Co.,  355,  522, 

561. 
Minneapolis  Threshing  Machine  Co.  v.  Darnall,  62. 

V.  Firemen's  Ins.  Co.,  368. 
Minnesota  Farmers'  Mut.  Fire  Ass'n  v.  Olson,  302, 
Minnesota  Title  Ins.  &  T.  Co.  v.  Drexel,  7. 
Minnock  v.  Eureka  F.  &  M.  Ins.  Co.,  408,  525. 
Miotke  V.  Milwaukee  Mechanics'  Ins.  Co.,  114,  281,  343. 
Misselhorn  v.  Mutual  Reserve  Fund  Life  Ass'n,  80,  90,  100,  191. 
Mississippi  Mut.  Ins.  Co.  v.  Ingram,  130,  433. 
Mississippi  Valley  Ins.  Co.  v.  Neyland.  250. 
Missouri,  K.  &  T.  Ry.  Co.  v.  Union  Ins.  Co.,  362. 
Missouri,  K.  &  T.  Trust  Co.  v.  German  Nat.  Bank,  111,  328,  343. 


TABLE    OF   CASES.  845 

References  are  to  pages. 

Missouri,  K.  &  T.  Trust  Co.  v.  McLachlan,  13. 

Missouri  Valley  Life  Ins.  Co.  v.  Dunklee,  317.  • 

V.  Kelso,  689. 

V.  McCrum,  284,  687. 
Mitchell  V.  Home  Ins.  Co.,  280,  779, 

V.  Lycoming  Mut.  Ins.  Co.,  209,  714. 

V.  Minnesota  Fire  Ass'n,  567. 

V.  Orient  Ins.  Co.,  596. 

V.  St.  Paul  German  Fire  Ins.  Co.,  435,  436. 

V.  Union  Life  Ins.  Co.,  85,  286,  288. 
Mitchell  Furniture  Co.  v.  Imperial  Fire  Ins.  Co.,  132,  365. 
Mobile  Life  Ins.  Co.  v.  Pruett,  150.  315. 

V.  Walker,  110. 
Moeller  v.  America  Fire  Ins.  Co.,  146,  149. 
Moge  V.  Societe  De  Bienfaisance  St.  Jean  Baptiste,  386. 
Mohr  &  Mohr  Distilling  Co.  v.  O'hio  Ins.  Co.,  162,  197. 
Monaghan  v.  Agricultural  Fire  Ins.  Co.,  19,  518,  533. 
Monitor  Mut.  Fire  Ins.  Co.  v.  Buffum,  236. 
Monitor  Mut.  Ins.  Co.  v.  Young,  197. 

Monmouth  County  Mut.  Fire  Ins.  Co.  v.  Hutchinson,  702. 
Monroe  v.  British  &  F.  M.  Ins.  Co.,  256,  261,  262. 
Monroe  B.  &  L.  Ass'n  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  131. 
Monteleone  v.  Royal  Ins.  Co.,  139. 
Montgomery  v.  Firemen's  Ins.  Co.,  134. 
Montross  v.  Roger  Williams  Ins.  Co.,  258,  259. 
Moody  V.  Amazon  Ins.  Co.,  411,  414,  769. 
Mooney  v.  Howard  Ins.  Co.,  774. 
Moore  v.  Barnett,  639. 

V.  Hanover  Fire  Ins.  Co.,  429,  518,  519,  579. 

V.  Phoenix  Fire  Ins.  Co.,  412,  420,  421,  770. 

V.  Protection  Ins.  Co.,  539,  543,  600. 

V.  Virginia  F.  &  M.  Ins.  Co.,  350,  533. 
More  V.  N.  Y.  Bowery  F.  Ins.  Co.,  52,  80,  158,  178,  548 
Morgan  v.  Sun  Ins.  Office,  579. 
Morgan  &  Co.  v.  White,  37. 
Morley  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  668. 
Morotock  Ins.  Co.  v.  Cheek,  582. 

V.  Rodefer,  331. 
Morrell  v.  Irving  Fire  Ins.  Co.,  439. 

V.  Trenton  Mut.  L.  &  F.  Ins.  Co.,  288. 
Morrill  &  Co.  v.  New  England  Fire  Ins.  Co.,  423. 
Morris  v.  Dodd,  697. 

v.  Farmers'  Mut.  Fire  Ins.  Co.,  125. 


S46  TABLE    OF    CASES. 

References  are  to  pages. 

Morris  v.  German-American  Ins.  Co.,  638. 

V.  Penn  Mut  Life  Ins.  Co.,  138. 

V.  State  Mut.  Life  Assur.  Co.,  394. 
Morrison  v.  Insurance  Co.  of  North  America,  65,  90,  239,  241,  431. 

V.  North  America  Ins.  Co.,  66,  89. 

V.  Wisconsin  Odd  Fellows'  Mut.  L.  Ins.  Co.,  44,  121,  122,  341. 
Morrison's  Adm'r  v.  Tennessee  M.  &  P.  Ins.  Co.,  674. 
Morse  v.  St.  Paul  F.  &  M.  Ins.  Co.,  52,  77,  79,  157,  177,  265. 
Moseley  v.  Vermont  Mut.  Fire  Ins.  Co.,  343,  536. 
Mosness  v.  German  American  Ins.   ^o.,  609,  615,  625,  640,  652,  653, 

654,  767,  770,  771. 
Mose  V.  City  of  St.  Paul,  25. 

Mosser  v.  Knights  Templars'  &  M,  Life  Ind.  Co.,  318. 
Mott  V.  Citizens'  Ins.  Co.,  332. 
Moulor  V.  American  Life  Ins.  Co.,  325,  716. 
Moulthrop  V.  Farmers'  Mut.  Fire  Ins.  Co.,  403. 
Mound  City  Mut.  Life  Ins.  Co.  v.  Huth,  180,  265. 
Mount  V.  Waite,  357. 

Mt.  Leonard  Milling  Co.  v.  Liverpool  &  L,  &  G.  Ins.  Co.,  332. 
Mowry  v.  Agricultural  Ins.  Co.,  410. 

V.  Home  Life  Ins.  Co.,  393. 

V.  Rosendale,  267. 
Moyer  v.  Sun  Ins.  Office,  506,  624. 
Mueller  v.  Grand  Grove  U.  A.  O.  D.,  315. 

V.  South  Side  Fire  Ins.  Co.,  585. 
Muhleman  v.  National  Ins.  Co.,  188. 
Mullaney  v.  National  F.  &  M.  Ins.  Co.,  118,  327. 
Mullen  V.  Reed,  137,  682. 

Mullin  v.  Vermont  Mut.  Fire  Ins.  Co.,  214,  352,  533,  534,  536. 
Mullins  V.  Thompson,  693. 
Mulville  V.  Adams,  403. 
Murdock  v.  Chenango  County  Mut.  Ins.  Co.,  336. 

V.  Franklin  Ins.  Co.,  424. 
Murdy  v.  Skyles,  380. 
Murphy  v.  American  Cent.  Ins.  Co.,  446. 

v.  North  British  &  M.  Ins.  Co.,  551. 

V.  Northern  British  &  M.  Co.,  594,  625,  671. 
Murray  v.  Home  Ben.  Life  Ass'n,  315. 

V.  New  York  Life  Ins.  Co.,  390. 
Mutual  Ace.  Ass'n  v.  Tuggle,  388. 

Mutual  Aid  &  Instruction  Soc.  v.  Monti,  122,  510.  • 

Mutual  Assur.  Soc.  v.  Korn,  121. 
Mutual  Ben.  Co.'s  Petition,  In  re,  777. 


TABLE   OF   CASES.  847 

References  are  to  pap;ps. 

Mutual  Ben.  Life  Ins.  Co.  v.  Daviess'  Ex'r,  777. 

V.  Hillyard,  311. 

V.  Robison.  321. 
Mutual  Fire  Ins.  Co.  v.  Alvord,  614,  639,  659. 

V.  Coatesville  Shoe  Factory,  420. 

V.  Rupp,  610,  632. 
Mutual  Ins.  Co.  v.  Tweed,  369. 
Mutual  Life  Ins.  Co.  v.  Allen,  8, 138,  285,  308,  688. 

V.  Arhelger,  340. 

V.  Dingley,  140,  150. 

V.  Gorman,  160. 

V.  Hill,  137,  139,  151,  306,  308. 

V.  Hillmon,  775,  777. 

V.  Newton,  775,  777. 

V.  Phinney,  151,  159,  308,  781. 

V.  Sandfelder,  692. 

V.  Sears,  151,  308. 

V.  Simpson,  341,  385. 

V.  Stibbe,  393,  766. 

V.  Terry,  395. 

V.  Thompson,  92. 

V.  Wager,  444. 

V.  Young's  Adm'r,  16,  82,  83,  88,  96,  100,  191,  348. 
Mutual  Mill  Ins.  Co.  v.  Gordon,  112,  446. 
Mutual  Reserve  Fund  Life  Ass'n  v.  Beatty,  287. 

V.  Farmer,  95,  99,  347. 

V.  Tolbert,  427. 
Myers  v.  Council  Bluffs  Ins.  Co.,  519,  579. 

V.  Keystone  Mut.  Life  Ins.  Co.,  83,  84,  86,  96. 

V.  Liverpool  &  L.  &  G.  Ins.  Co.,  53,  60,  76,  88,  90,  98. 
Nail  V.  Provident  Sav.  Life  Assur.  Soc,  306. 
Nassauer  v.  Susquehanna  Mut.  Fire  Ins.  Co.,  69,  192,  206, 
Nassl  V.  Metropolitan  Life  Ins.  Co.,  352. 
National  Ace.  Soc.  v.  Taylor,  574. 
National  Bank  v.  Hartford  Fire  Ins.  Co.,  347. 

V.  Matthews,  29. 

v.  Union  Ins.  Co.,  430. 
National  Bank  of  D.  0.  Mills  &  Co.  v.  Union  Ins.  Co.,  678. 
National  Ben.  Ass'n  v.  Bowman,  379,  389,  767. 

V.  Grauman,  378,  385. 

V.  Jackson,  296,  397. 
National  Filtering  Oil  Co.  .v.  Citizens'  Ins.  Co.,  275,  279,  436. 
National  Fire  Ins.  Co.  v.  Orr.  398. 


848  TABLE    OF    CASES. 

References  are  to  pa^es. 

National  Home,  B.  &  L.  Ass'n  v.  Dwelling  House  Ins.  Co.,  626. 

National  Life  Ass'n  v.  Sturtevant,  529. 

National  Life  Ins.  Co.  v.  Minch,  265. 

National  Masonic  Ace.  Ass'n  v.  Day,  576. 

National  Mut.  Aid  Soc.  v.  Lupoid,  298. 

National  Mut.  Ben.  Ass'n  v.  Jones,  315. 

National  Mut.  Ins.  Co.  v.  Home  Ben.  Soc,  312,  731,  746. 

National  Union  v.  Marlow,  32. 

Nave  V.  Home  Mut.  Ins.  Co.,  363,  371. 

Nease  v.  Aetna  Ins.  Co.,  688. 

Nebraska  &  I.  Ins.  Co.  v.  S6gard,  444. 

V.  Seivers,  56,  61,  456,  459. 
Nederland  Life  Ins.  Co.  v.  Hall,  759. 
Negus,  In  re,  684. 

Nelson  v.  Atlanta  Home  Ins.  Co.,  625. 
Neskern  v.  Northwestern  E.  &  L.  Ass'n,  763. 
Neuendorff  v.  World  Mut.  Life  Ins.  Co.,  165. 
Neville  v.  Merchants'  &  M.  Mut.  Ins.  Co.,  63. 
New  V.  German  Ins.  Co.,  686. 
Newark  Fire  Ins.  Co.  v.  Sammons,  196,  208. 

Newark  Machine  Co.  v.  Kenton  Ins.  Co.,  16,  45,  55,  60,  88,  92,  182. 
New  England  F.  &  M.  Ins.  Co.  v.  Robinson,  48,  456. 

v.  Schettler,  232. 
Newhall  v.  Union  Mut.  Fire  Ins.  Co.,  778. 
New  Hampshire  Mut.  Fire  Ins.  Co.  v.  Noyes,  19. 
Newman  v.  Covenant  Mut.  Ins.  Ass'n,  761,  764. 

V.  Home  Ins.  Co.,  149. 

V.  Springfield  F.  &  M.  Ins.  Co.,  176,  347,  514. 
Newmark  v.  Liverpool  &  L.  F.  &  L.  Ins.  Co.,  180,  374, 
New  Orleans  Ins.  Ass'n  v.  Griffin,  409. 

v.  Holberg,  401,  403. 

V.  Matthews,  599. 
New  Orleans  Ins.  Co.  v.  Gordon,  404. 
Newton  v.  Mutual  Ben.  Life  Ins.  Co.,  778. 
New  York  Bowery  Fire  Ins.  Co.  v.  New  York  Fire  Ins.  Co.,  721,  724, 

733,  735,  747. 
New  York  Cent.  Ins.  Co.  v.  National  Protection  Ins.  Co.,  245,  483. 

v.  Watson,  108,  159. 
New  York  Life  Ins.  Co.  v.  Babcock,  76,  79,  88,  90,  92. 

V.Baker,  347,  353,  716. 

v.  Clemmitt,  442. 

v.  Clopton,  20,  470. 

v.  Davis,  258,  392. 


TABLE    OF    CASES. 


819 


References  are  to  pages. 

New  York  Life  Ins.  Co.  v.  Eggleston,  591. 

V.  Fletcher,  158,  161,  207,  211,  221,  226,  230,  309,  351. 

V.  Ireland,  681. 

V.  McGowan,  160,  223,  317. 

V.  McMaster's  Adm'r,  113,  114,  149. 

V.  Rohrbough,  252. 
-    V.Russell,  140,  172. 

V.  Statham,  11,  20,  258,  311,  314. 
New  York  L.  &  W.  W.  Co.  v.  People's  Fire  Ins.  Co.,  98. 
New  York  Mut.  Ins.  Co.  v.  Johnson,  80. 

New  York  Mut.  Life  Ins.  Co.  v.  Armstrong,  5,  283,  350,  391,  685. 
New  York  &  B.  D.  Express  Co.  v.  Traders'  &  M.  Ins.  Co.,  373. 
New  Zealand  Ins.  Co.  v.  Maaz,  301. 
Niagara  Fire  Ins.  Co.  v.  Bishop,  610,  635,  637,  641,  656,  667. 

V.  Brown,  231. 

V.  DeGraff,  355. 

V.  Elliott,  367,  368, 

V.  Fidelity  T.  &  T.  Co.,  700,  702. 

V.  Forehand,  542. 

V.  Heenan  &  Co.,  440. 

V.  Scammon,  404,  409,  440,  450,  455,  472,  487. 
Niagara  Ins.  Co.  v.  Lee,  167,  202. 
Niblo  V.  North  American  Fire  Ins.  Co.,  436. 
Nichols,  Appeal  of,  675. 

V.  Fayette  Mut.  Fire  Ins.  Co.,  329. 

V.  Rensselaer  County  Mut.  Ins.  Co..  650. 
Nickell  V.  Phcenix  Ins.  Co.,  563.  650. 
Nickerson  v.  Nickerson,  518,  519. 
Nightingale  v.  State  Mut.  Life  Ins.  Co.,  422. 
Nixon  V.  Queen  Ins.  Co.,  492,  500. 
Noble  V.  Mitchell,  23,  167,  171,  173,  174,  474. 
Noone  v.  Transatlantic  Fire  Ins.  Co,  505,  509,  514. 
Nordyke  &  M.  Co.  v.  Gery,  299. 
Norman  v.  Insurance  Co.  of  North  America,  186. 
North  America  Fire  Ins.  Co.  v.  Throop,  364,  367,  773. 
North  American  Life  Ins.  Co.  v.  Wilson,  18. 
North  American  L.  &  A.  Ins.  Co.  v.  Burroughs,  5,  381. 
Northampton  Mut.  L.  S.  Ins.  Co.  v.  Tuttle,  94,  138. 
North  British  &  Mercantile  Ins.  Co.  v.  Crutchfield,  167,  192,  206,  523, 

524. 
North  Carolina  State  Life  Ins.  Co.  v.  Williams,  258 
Northern  Assur.  Co.  v.  Hamilton,  162. 

V.  Samuels,  185,  666,  667. 
KERR,  INS.— 54 


850  TABLE    OF    CASES. 

References  are  to  pages. 

Northern  R.  Co.  v.  Miller,  124. 

North  Pennsylvania  Fire  Ins.  Co.  v.  Susquehanna  Mut.  Fire  Ins.  Co., 

484,  735,  740,  741.  * 

Northrup  v.  Germania  Fire  Ins.  Co.,  166. 

V.  Piza,  169,  202,  336. 

V.  Railway  Passenger  Assur.  Co.,  393. 
Northwestern  Ins.  Co.  v.  Atkins,  451,  491,  521. 
Northwestern  Life  Ins.  Co.  v.  Muskegon  Bank,  392. 
Northwestern  Masonic  Aid  Ass'n  v.  Jones,  338,  682,  683,  685,  693,  694. 
Northwestern  Mut.  Life  Ins.  Co.  v.  Amerman,  337,  707. 

V.  Elliott,  351,  444. 

V.  Hazelett,  135,  293. 

V.  Heimann,  341,  385. 

V.  Rochester  German  Ins.  Co.  445. 

V.  Stevens,  777,  780,  781. 

V.Woods,  328. 
Northwestern  Nat.  Ins.  Co.  v.  Mize,  236,  243. 
Norton  v.  Phoenix  Mut.  Life  Ins.  Co.,  86. 

V.  Rensselaer  &  S.  Ins.  Co.,  491,  499,  542. 
Norwich  Fire  Ins.  Co.  v.  Boomer,  276. 

Norwich  &  N.  Y.  Transp.  Co.  v.  Western  Massachusetts  Ins.  Co.,  565. 
Norwood,  Ex  parte,  738. 

Y.  Guerdon,  107. 

V.  Resolute  Fire  Ins.  Co.,  738. 
Noyes  v.  Northwestern  Nat.  Ins.  Co.,  368. 

V.  Phoenix  Mut.  Life  Ins.  Co.,  79,  86. 
Nugent  v.  Supervisors  of  Putnam  County,  742. 
Ni*mey  v.  Fireman's  Fund  Ins.  Co.,  620,  627,  628,  665. 
Nussbaum  v.  Northern  Ins.  Co.,  277,  401. 
Nutting  v.  Minnesota  Fire  Ins.  Co.,  96. 

Oakes  v.  Manufacturers'  F.  &  M.  Ins.  Co.,  219,  402. 
Oakland  Home  Ins.  Co.  v.  Davis,  481. 
Obersteller  v.  Commercial  Assur.  Co.,  535. 
O'Brien  v.  Commercial  Fire  Ins.  Co.,  469,  499,  542. 

v.  Home  Ins.  Co.,  344,  345. 

v.  Ohio  Ins.  Co.,  524,  541,  561,  599. 

v.  Phoenix  Ins.  Co.,  477,  518. 
O'Conner  v.  Hartford  Fire  Ins.  Co.,  493,  517. 
Odd  Fellows  Mut.  Life  Ins.  Co.  v.  Rohkopp,  392. 
O'Donnell  v.  Connecticut  Fire  Ins.  Co.,  762,  771,  774. 
O'Farrell  v.  Metropolitan  Life  Ins.  Co.,  212,  221. 
Ogden  T.  East  River  Ins.  Co..  440. 


i 


TABLE    OF   CASES.  ,  851 

References  are  to  pages. 

Oglesby  v.  Attrill,  745. 

Ohage  V.  Union  &  Miner  Ins.  Co.,  446. 

Ohio  V.  Moore,  36. 

Ohio  Farmers'  Ins.  Co.  v.  Stowman,  303. 

O'Keefe  v.  Liverpool,  L.  &  G.  Ins.  Co.,  446,  621. 

Old  Saucelito  L.  &  D.  Dock  Co.  v.  Commercial  Union  Assur.  Co.,  617. 

O'Leary  v.  German  American  Ins.  Co.,  241,  562. 

V.  Merchants'  &  Bankers'  Mut.  Ins.  Co.,  240,  243. 
Olmstead  v.  Farmers'  Mutual  Fire  Ins.  Co.,  190, 

V.  Keyes,  285. 
Olney  v.  German  Ins.  Co.,  402. 
Olsen  V.  California  Ins.  Co.,  729,  736. 
Olson  V.  Brady,  14. 

V.  St.  Paul  F.  &  M.  Ins.  Co.,  417,  418. 
Omaha  Fire  Ins.  Co.  v.  Crighton,  346. 

V.  Dierks,  460,  515,  671. 

V.  Dufek,  148. 

V.  Hildebrand,  594. 
Omaha  Nat.  Bank  v.  Mutual  Ben.  Life  Ins.  Co.,  309. 
Omberg  v.  United  States  Mut.  Ace.  Ass'n,  381.  383. 
O'Neil  V.  American  Fire  Ins.  Co.,  70,  71,  143,  432,  712. 

V.  Buffalo  Fire  Ins.  Co.,  321. 

V.  Pleasant  Prairie  Mut.  Fire  Ins.  Co.,  40,  130. 
O'Neill  V.  Massachusetts  Benefit  Ass'n,  504. 
Order  of  Chosen  Friends  v.  Austerlitz,  607. 
Ordway  v.  Chace,  704. 

Oregon  &  W.  Mortg.  Sav.  Bank  Co.  v.  American  Mortg.  Co.,  258. 
O'Reilly  v.  Corporation  of  London  Assur.  Co.,  107,  159,  238. 

V.  Guardian  Mut.  Life  Ins.  Co.,  297,  455,  491,  493,  555, 

V.  London  Assur.  Corp.,  60. 
Orient  Ins.  Co.  v.  Daggs,  23,  70,  72. 
Orient  Mut.  Ins.  Co.  v.  Wright,  291, 
Ormond  v.  Fidelity  Life  Ass'n,  95,  347. 
Orr  V.  Citizens'  Fire  Ins.  Co.,  405,  688. 

V.  Travelers'  Ins.  Co.,  390. 
Oshkosh  Gaslight  Co.  v.  Germania  Fire  Ins.  Co.,  66,  116,  621. 
Oshkosh  Match  Works  v.  Manchester  Fire  Assur.  Co.,  234,  243,  541, 

557,  558,  601,  603. 
Oshkosh  Packing  &  Provision  Co.  v.  Mercantile  Ins.  Co.,   446,  533, 

535,  536,  538. 
Otterbein  v.  Iowa  State  Ins.  Co.,  80,  187. 
Overbeck  v.  Overbeck,  681. 
Overby  v.  Fayetteville  B.  &  L.  Ass'n,  299. 


852  TABLE    OF    CASES. 

References  are  to  pages, 

Overby  v.  Thrasher,  653. 

Overton  v.  St.  Louis  Mut.  Life  Ins.  Co.,  389. 

Owens  V.  Holland  Purchase  Ins.  Co.,  327. 

Pace  V.  Pace,  697. 
Pacific  Mut.  Ins.  Co.  v.  Frank,  180. 
Pacific  Mut.  Life  Ins.  Co.  v.  Williams,  680. 
Packard  v.  Connecticut  Mut.  Life  Ins.  Co.,  716. 
V.  Dorchester  Mut.  Fire  Ins.  Co.,  231,  266. 
Page  V.  Sun  Ins.  Office,  440,  441. 
Pain  V.  Societe  St.  Jean  Baptiste,  122,  124,  127. 
Painter  v.  Industrial  Life  Ass'n,  182. 
Palatine  Ins.  Co.  v.  Weiss,  446. 
Palmer  v.  Hartford  Fire  Ins.  Co.,  146,  147. 
V.  St.  Paul  F.  &  M.  Ins.  Co.,  488. 
V.  AVelch,  685. 
Palmer  Sav.  Bank  v.  Insurance  Co.  of  North  America,  765. 
Paltrovitch  v.  Phoenix  Ins.  Co.,  133,  450,  468,  506,  509,  513,  574,  577. 
Parcell  v.  Grosser,  404. 
Parker  v.  Amazon  Ins.  Co.,  536. 
V.  Bridgeport  Ins.  Co.,  333. 
V.  Des  Moines  Life  Ass'n,  395. 
V.  Eagle  Fire  Ins.  Co.,  439. 
V.  Lamb,  23,  24,  173. 
Parker  &  Young  Mfg.  Co.  v.  Exchange  Fire  Ins.  Co.,  168. 
Parks  V.  Anchor  Mut.  Fire  Ins.  Co.,  455,  493,  496,  497. 
Parmelee  v.  Hoffman  Fire  Ins.  Co.,  528. 
Parrish  v.  Virginia  F.  &  M.  Ins.  Co.,  436. 
Parsons  v.  Citizens'  Ins.  Co.,  536. 

V.  Queen  Ins.  Co.,  51. 
Partridge  v.  Milwaukee  Mechanics'  Ins.  Co.,  515,  556,  569. 
Patch  V.  Phoenix  Mut.  Life  Ins.  Co.,  118. 
Patrick  v.  Farmers'  Ins.  Co.,  587. 
Patridge  v.  Commercial  Fire  Ins.  Co.,  206,  219. 
Patten  v.  Farmers'  Mut.  Fire  Ins.  Co.,  322. 

V.  Merchants'  &  Farmers'  Mut.  Fire  Ins.  Co.,  773. 
Patterson  v.  Benjamin  Franklin  Ins.  Co.,  51. 
V.  National  Premium  Mut.  Life  Ins.  Co.,  395. 
V.  Royal  Ins.  Co.,  63. 
Paul  V.  Travelers'  Ins.  Co.,  132.  381,  385,  387,  388. 

V.  Virginia,  22,  25,  171,  173. 
Peabody  v.  Fraternal  Ace.  Ass'n,  569,  605. 
Peacock  v.  New  York  Life  Ins.  Co.,  106,  107. 


TABLE    OF    CASES.  853 

References  are  to  pages. 

Pearce  v.  Madison  &  I.  R.  Co.,  742. 

Pearman  v.  Gould,  404,  704. 

Peek's  Ex'r  v.  Peek's  Ex'r,  685. 

Peele  v.  Provident  Fund  Soc,  381,  450,  452,  458,  460,  466,  477,  481, 

487,  515. 
Peet  V.  Dakota  F.  &  M.  Ins.  Co.,  500. 
Pelican  Ins.  Co.  v.  Schwartz,  536. 

V.  Troy  Co-operative  Ass'n,  374. 

V.  Wilkerson,  332,  542,  544. 
Pelzer  Mfg.  Co.  v.  Sun  Fire  Office,  441. 
Pence  v.  Makepeace,  692,  693,  695. 
Pencil  V.  Home  Ins.  Co.,  440. 
Pendleton  v.  Elliott,  299,  704. 

V.  Knickerbocker  Life  Ins.  Co.,  295. 
Peninsular  Land  T.  &  M.  Co.  v.  Franklin  Ins.  Co.,  546. 
Pennell  v.  Lamar  Ins.  Co.,  565. 
Pennington  v.  Pacific  Mut.  Life  Ins.  Co.,  385,  524. 
Penn  Mut.  Life  Ins.  Co.  v.  Mechanics'  Sav.  Bank  &  Trust  Co.,  12,  323, 
345. 

V.  Wiler,  325,  349. 
Penn  Plate  Glass  Co.  v.  Spring  Garden  Ins.  Co.,  610,  632,  634,  668. 
Pennsylvania  Fire  Ins.  Co.  v.  Dougherty,  457. 

V.  Moore,  26. 
Pennypacker  v.  Capital  Ins.  Co.,  28,  137,  482,  526. 
People  V.  Dimick,  100,  166,  348. 

V.  Empire  Mut.  Life  Ins.  Co.,  443,  724,  746,  747,  751,  752,  754-756, 
758. 

V.  Fidelity  &  Casualty  Co.,  6,  23,  36. 

V.  Gilbert,  37,  171,  173,  262. 

V.  Howard,  173. 

V.  Life  &  Reserve  Ass'n,  757. 

V.  Liverpool,  L.  &  G.  Ins.  Co.,  18. 

V.  Mut.  Life  Ins.  Co.,  750. 

v.  People's  Ins.  Exchange,  38,  174,  202. 

V.Phelps,  693. 

v.  Philadelphia  Fire  Ass'n,  36. 

V.  Pullman's  Palace  Car  Co.,  745. 

v.  Rose,  6,  13. 

V.  Security  Life  Insurance  &  Annuity  Co.,  443. 

V.  Stale  Ins.  Co.,  25. 

V.  Van  Cleave,  23,  25. 
People's  Ace.  Ass'n  v.  Smith,  485. 
People's  Bank  v.  Aetna  Ins.  Co.,  510,  590. 


\ 


85i:  TABLE    OF    CASES. 

References  are  to  pages. 

People's  Fire  Ins.  Co.  v.  Pulver,  500. 
People's  Ins.  Co.  v.  Paddon,  76. 

V.  Spencer,  356. 
People's  Mut.  Ben.  Soc.  v.  Templeton,  284. 
Peoria  M.  &  F.  Ins.  Co.  v.  Anapow,  276. 

V.  Hall,  415. 

V.  Lewis,  365,  437,  770. 

V.  Walser,  86, 

V.  Whitehill,  508. 

V.  Wilson,  441. 
Peoria  Sugar  Refining  Co.  v.  Canada  F.  &  M.  Ins.  Co.,  425. 

V.  People's  Fire  Ins.  Co.,  407. 
Peppit  V.  North  British  &  M.  Ins.  Co.,  483. 
Perkins  v.  Washington  Ins.  Co.,  176,  179,  271. 
Perry  v.  Dwelling-House  Ins.  Co.,  552,  597. 

V.  Lorillard  Fire  Ins.  Co.,  405,  688. 

V.  Mechanics'  Mut.  Ins.  Co.,  213,  281,  37& 

V.  Provident  Life  Ins.  &  Inv.  Co.,  101. 
Peterson  v.  Mississippi  Valley  Ins.  Co.,  367,  368. 
Pettengill  v.  Hinks,  659. 
Phenix  Ins.  Co.  v.  Allen,  366,  762,  766,  771,  774. 

V.  Belt  Ry.  Co.,  427,  428. 

V.  Bowdre,  557,  558,  561. 

V.  Clay,  355,  782. 

V.  Covey,  241. 

V.  First  Nat.  Bank,  704. 

V.  Gebhart,  148. 

V.  Golden,  221,  230.  ,  | 

y.  Holcombe,  401,  421.  ^ 

V.  Lamar,  408.  '  i\ 

y.  La  Pointe,  714. 

V.  Munger,  182,  565. 

V.  Omaha  Loan  &  Trust  Co.,  678. 

V.  Pennsylvania  R.  Co.,  28,  701, 

V.  Pickel,  481,  766,  768,  769. 

v.  Rad  Bila  Hora  Lodge,  493.  - 

V.  Searles,  214,  219,  562,  591,  599.  600,  603,  629. 

v.  Tomlinson,  317,  715. 

V.Willis,  692,  761. 
Philadelphia  Fire  Ass'n  v.  New  York,  35,  36. 
Philadelphia  Ins.  Co.  v.  Washington  Ins.  Co.,  721, 
Philadelphia  Life  Ins.  Co.  v.  American  Life  &  Health  Ins.  Co.,  67, 
102,  729,  730. 


TABLE    OF    CASES.  855 

References  are  t«  pages. 

Philadelphia  Tool  Co.  v.  British  American  Assur.  Co.,  280. 
Phillips  V.  Protection  Ins.  Co.,  371,  482. 

V.  United  States  Benev.  Soc,  452,  458,  469. 
Phinney  v.  Mutual  Life  Ins.  Co.,  317. 
Phoenix  Assur.  Co.  v.  Coffman,  333. 

V.  McArthur,  89,  93. 
Phcenix  Fire  Ins.  Co.  v.  Hoffheimer,  147. 
Phoenix  Ins.  Co.  v.  Allen,  773. 

V.  Anchor  Ins.  Co.,  726. 

V.  Asbury,  404. 

V.  Badger,  628,  665. 

V.  Copeland,  242,  408. 

V.  Erie  &  W.  Transportation  Co.,  277,  700,  703,  721,  725. 

V.  Favorite,  363. 

V.  Flemming,  215,  710. 

V.  Frissell,  268,  269. 

V.  Hamilton,  279. 

V.  Hancock,  675. 

V.  Levy,  499,  543,  572,  596. 

V.  McLoon,  70. 

V.  Meier,  93. 

V.  Mills,   376, 

V.  Minner,  590,  591. 

V.  Moog,  532. 

V.  Moore,  621,  641,  643. 

V.  Omaha  Loan  &  Trust  Co.,  119. 

V.  Padgitt,  534. 

V.  Perry,  515,  565. 

V.Pratt,  268,  269. 

V.  Public  Parks  Amusement  Co.,  241,  398. 

V.  Ryland,  57. 

V.  Searles,  587. 

V.  Spiere,  53. 

V.  Stark,  202. 

V.  Stewart,  360. 

V.  Stocks,  351. 

V.  Swann,  410,  536. 

T.  Taylor,  136,  576. 

V.  Tomlinson,  108. 

V.  Tucker,  412. 

V.Ward,  254. 

V.  Warttemberg,  158,  220-222,  230,  351. 

V.  Welch,  36. 


856 


TABLE   OF    CASES. 


References  are  to  pages. 

Phoenix  Ins.  Co.  v.  Wilcox  &  G.  Guano  Co.,  119. 

V.Willis,  521. 
Phoenix  Life  Ins.  Co.  v.  Raddin,  321,  329. 
Phoenix  Mut.  Life  Ins.  Co.  v.  Bailey,  8. 

V.  Baker,  443. 

V.  Hinesley,  186,  317. 
Pickel  V.  Phenix  Ins.  Co.,  410,  481,  784. 
Pickett  V.  German  Fire  Ins.  Co.,  79. 

V.  Pacific  Mut.  Life  Ins.  Co.,  383,  387,  388. 
Piedmont  &  A.  Life  Ins.  Co.  v.  Ewing,  16,  88,  97,  100,  348,  350,  353. 

V.  Lester,  317. 

V.Ray,  294. 

V.  Young,  136. 
Pierce  v.  Charter  Oak  Life  Ins.  Co.,  118,  295,  697. 

V.  People,  38,  167,  174. 
Pindart  v.  Kings  County  Fire  Ins.  Co.,  364. 
Pingrey  v.  National  Life  Ins.  Co.,  690. 
Pinkham  v.  Morang  &  M.  Mut.  Fire  Ins.  Co.,  345. 
Pinneo  v.  Goodspeed,  695. 

Pioneer  Mfg.  Co.  v.  Phoenix  Assur.  Co.,  625,  628,  630,  670. 
Pitney  v.  Glen's  Falls  Ins.  Co.,  182,  183. 
Pitt  V.  Berkshire  Life  Ins.  Co.,  300,  301. 

Pittsburgh,  C.  &  St.  L.  Ry.  Co.  v.  Keokuk  &  H.  Bridge  Co.,  39. 
Pittsburgh  Storage  Co.  v.  Scottish  U.  &  N.  Ins.  Co.,  277,  674. 
Planters'  Ins.  Co.  v.  Myers,  206,  208,  347. 

V.  Rowland,  238. 
Planters'  Mut.  Ins.  Co.  v.  Deford,  131. 

V.  Engle,  363. 

V.  Rowland,  148,  184,  186,  276,  418. 
Planters'  &  Merchants'  Ins.  Co.  v.  Thurston,  281. 
Piatt  V.  Aetna  Ins.  Co.,  439,  661,  711,  717. 

V.Richmond  Y.  R.-&  C.  R.  Co.,  700,  703,  782. 
Polish  Roman  Catholic  Union  v.  Warczak,  121. 
Pollock  V.  United  States  Mut.  Ace.  Ass'n,  388. 
Pomeroy  v.  Manhattan  Life  Ins.  Co.,  137. 
Pool  V.  Milwaukee  Mechanics'  Ins.  Co.,  711. 
Porter  v.  Mutual  Life  Ins.  Co.,  93,  94. 

V.  United  States  Life  Ins.  Co.,  237. 
Portsmouth  Ins.  Co.  v.  Reynolds'  Adm'r,  375. 
Poss  V.  Western  Assur.  Co.,  420. 
Post  V.  Aetna  Ins.  Co.,  44,  182,  183. 

V.  Beacon  V.  P.  &  E.  Co.,  751. 

V.  Hampshire  Mut.  Fire  Ins.  Co.,  70,  674. 


TABLE    OF   CASES.  857 

References  are  to  pages. 

Potter  V.  Monmouth  Mut.  Fire  Ins.  Co.,  351. 

V.  Phenix  Ins.  Co.,  55,  67. 
Pottsville  Mut.  Fire  Ins.  Co.  v.  Fromm,  219. 

V.  Minnequa  Springs  Imp.  Co.,  238,  245. 
Poughkeepsie  Sav.  Bank  v.  Manhattan  Fire  Ins.  Co.,  222. 
Powell  V.  Factors'  &  Traders'  Ins.  Co.,  714. 
Power  V.  Ocean  Ins.  Co.,  276. 
Powers  V.  Guardian  F.  &  L.  Ins.  Co.,  403. 

V.  New  England  Fire  Ins.  Co.,  166,.  189,  557. 

V.  Northwestern  Mut.  Life  Ass'n,  341. 
Powers  Dry  Goods  Co.  v.  Imperial  Fire  Ins.  Co.,  543,  641,  G43,  658, 

667,  671. 
Prader  v.  National  Masonic  Ace.  Ass'n,  358,  389,  610. 
Prall  V.  Mutual  Life  Protection  Assur.  Soc,  86,  91. 
Pratt  V.  Burdon,  174. 

V.  New  York  Cent.  Ins.  Co.,  579,  583. 
Pray  v.  Life  Indemnity  &  Security  Co.,  606. 
Preferred  Ace.  Ins.  Co.  v.  Stone,  57,  81,  762. 
Preferred  Masonic  Mut.  Life  Ins.  Co.  v.  Giddings,  41. 
Prendergast  v.  Dwelling  House  Ins.  Co.,  220,  450,  514. 
Prentice  v.  Knickerbocker  Life  Ins.  Co.,  309,  570,  716. 
Presbyterian  Mut.  Assur.  Fund  v.  Allen,  328,  339. 
Pretzfelder  v.  Merchants'  Ins.  Co.,  601,  602,  647. 
Prevost  V.  Scottish  U.  &  N.  Ins.  Co.,  470. 
Price  V.  St.  Louis  Mut.  Life  Ins.  Co.,  37,  721,  747,  751. 
Prince  v.  City  of  St.  Paul,  25. 
Proppe  V.  Metropolitan  Life  Ins.  Co.,  531. 
Protection  Ins.  Co.  v.  Pherson,  502,  508. 
Protection  Life  Ins.  Co.  v.  Foote,  191. 

V.  Palmer,  104. 
Providence  County  Bank  v.  Benson,  277. 
Providence  Life  Assur.  Soc.  v.  Reutlinger,  340. 
Providence  Wash.  Ins.  Co.  v.  Board  of  Education  of  Morganstown 

School  District,  445. 
Providence  &  W.  R.  Co.  v.  Yonkers  Fire  Ins.  Co.,  361. 
Provident  Fund  Soc.  v.  Howell,  428. 

Provident  Life  Ins.  &  Inv.  Co.  v.  Baum,  283,  482,  489,  490. 
Provident  Sav.  Life  Assur.  Soc.  v.  Hadley,  138. 
Prudential  Assur.  Co.  v.  Aetna  Life  Ins.  Co.,  734. 
Prudential  Ins.  Co.  v.  Cummins'  Adm'r,  213. 

v.  Humm,  284. 

v.  Jenkins,  284. 

V.  Liersch,  687. 
Prudhomme  v.  Salamander  Fire  Ins.  Co.,  344. 


858  TABLE    OF    CASES. 

References  are  to  pages. 

Pudritzky  v.  Supreme  Lodge,  K.  of  H.,  341,  385. 

Pullis  V.  Robison,  693. 

Pullman  v.  North  Brilish  Mercantile  Ins.  Co.,  633. 

Pullman's  Palace  Car  Co.  v.  Central  Transportation  Co.,  42. 

Putnam  v.  Commonwealth  Ins.  Co.,  535. 

V.  Home  Ins.  Co.,  44,  46,  60,  63. 
Pythian  Life  Ass'n  v.  Preston,  249,  300. 

Quandt  v.  Grand  Lodge,  I.  G.  0.,  336. 

Quarrier  v.  Peahody  Ins.  Co.,  440. 

Queen  Ins.  Co.  v.  Leslie,  66,  143,  344,  621,  713. 

V.  May,  220. 

V.  Young,  234,  262,  660. 
Quigley  v.  St.  Paul  Title  Insurance  &  Trust  Co.,  352. 
Quinlan  v.  Providence  W.  Ins.  Co.,  72,  133,  134,  150,  155,  224,  233,  236, 

240,  243,  244,  488,  557,  560,  712. 
Quinn  v.  Metropolitan  Life  Ins.  Co.,  212,  221. 

V.  Supreme  Council,  C.  K.,  691.  • 

Rademacher  v.  Greenwich  Ins.  Co.,  585,  602,  657,  668. 

Radiker  v.  Queen  Ins.  Co.,  241. 

Rafel  V.  Nashville  M.  &  F.  Ins.  Co.,  364,  365,  530. 

Rahr  v.  Manchester  Fire  Assur.  Co.,  156,  177,  199. 

Railway  Officials'  &  Employees'  Ace.  Ass'n  v.  Drummond,  381. 

Railway  Passenger  Assur.  Co.  v.  Burwell,  385,  488. 

Railway  P.  &  F.  C.  Mut.  Aid  &  Ben.  Ass'n  v.  Robinson,  120. 

Rainsbarger  v.  Union  Mut.  Aid  Ass'n,  763. 

Rainsford  v.  Royal  Ins.  Co.,  423. 

Ralli  v.  White,  523. 

Ramsey  v.  Philadelphia  Underwriters'  Ass'n,  261. 

Ramspeck  v.  Patillo,  62,  165. 

Rand  v.  Massachusetts  Ben.  Life  Ass'n,  732,  746. 

Randall  v.  American  Fire  Ins.  Co.,  610. 

V.  Tuell,  28,  32,  180. 
Randolph  v.  Barrett,  761. 
Rankin  v.  Amazon  Ins.  Co.,  333. 
Rann  v.  Home  Ins.  Co.,  407. 
Ranspach  v.  Teutonia  Fire  Ins.  Co.,  710. 
Raub  V.  New  York  Life  Ins.  Co.,  294. 
Rawls  V.  American  Life  Ins.  Co.,"  286,  680. 

V.  American  Mut.  Life  Ins.  Co.,  286,  349. 
Rawson  v.  Jones,  693. 

Raymond  v.  Farmers'  Mut.  Fire  Ins.  Co.,  505,  609,  612,  616,  633,  639, 
654. 


TAI3LE    OF    CASES.  859 

References  are  to  pages. 

Read  v.  State  Ins.  Co.,  424,  615,  617,  633,  634,  638,  641,  643,  645,  666, 

667,  669. 
Reavis  v.  Farmers'  Mut.  Fire  Ins.  Co.,  361. 
Redfield  v.  Holland  Purchase  Ins.  Co.,  280. 
Redford  v.  Mutual  Fire  Ins.  Co.,  189. 
Reditcer  v.  Queen  Ins.  Co.,  232. 
Redman  y.  Aetna  Ins.  Co.,  353. 

V.  Hartford  Fire  Ins.  Co.,  347. 
Redmond  v.  Industrial  Ben.  Ass'n,  511,  531. 
Redpath  v.  Sun  Mut.  Ins.  Co.,  39. 

Redstrake  v.  Cumberland  Mut.  Fire  Ins.  Co.,  241,  242. 
Reed  y.  Equitable  F.  &  M.  Ins.  Co.,  407-409. 

V.  Provident  Sav.  Life  Assur.  Soc,  286. 

V.  Washington  F.  &  M.  Ins.  Co.,  609,  618. 

V.Williamsburg  City  Fire  Ins.  Co.,  281. 
Reese  v.  Smyth,  750,  753,  756,  757. 
Reichard  v.  Manhattan  Life  Ins.  Co.,  760. 
Reid  V.  Lancaster  Fire  Ins.  Co.,  774. 

V.  McCrum,  677. 
Reilly  v.  Chicago  Guaranty  Fund  Life  Soc,  314. 
Reithmueller  v.  Philadelphia  Fire  Ass'n,  345. 
Relfe  y.  Columbia  Life  Ins.  Co.,  747,  750,  752,  756. 

V.  Commercial  Ins.  Co.,  37. 

V.  Rundle,  39. 
Reliance  Mut.  Ins.  Co.  v.  Sawyer,  32. 
Relief  Fire  Ins.  Co.  v.  Shaw,  46,  48,  50. 
Remelee  v.  Hall,  639,  654. 

Remington  Paper  Co.  v.  London  Assur.  Corp.,  629,  636,  652,  655. 
Renier  v.  Dwelling-House  Ins.  Co.,  562. 
Rensenhouse  v.  Seeley,  4. 
Renshaw  v.  Fireman's  Ins.  Co.,  357,  369. 

V.  Missouri  State  Mut.  F.  &  M.  Ins.  Co.,  358,  370. 
Replogle  V.  American  Ins.  Co.,  407. 
Republic  Fire  Ins.  Co.  y.  Weides,  529,  540,  542,  543. 
Reserve  Mut.  Ins.  Co.  v.  Kane,  288. 
Reynolds  v.  Atlas  Ace.  Ins.  Co.,  Ill,  114,  147.  149.  230,  327. 

V.  Continental  Ins.  Co.,  156,  162,  177,  194. 

V.  Iowa  &  N.  Ins.  Co.,  275,  281,  301. 
Rheims  v.  Standard  Fire  Ins.  Co.,  452,  459,  474,  527,  569. 
Rhode  Island  Nat.  Bank  v.  Chase,  697. 
■Richards  v.  Continental  Ins.  Co.,  263,  718. 

V.  Washington  F.  &  M.  Ins.  Co.,  346. 
Richardson  v.  Maine  Ins.  Co.,  230,  782. 


860  TABLE    OF    CASES. 

Eeferences  are  to  pages. 

Richardson  v.  Travelers'  Ins.  Co.,  387. 
Richardson's  Adm'r  v.  German  Ins.  Co.,  404,  688. 
Richland  Countj^  Mut.  Ins.  Co.  v.  Sampson,  276. 
Richmond  v.  Niagara  Falls  Ins.  Co.,  219. 

V.  Niagara  Fire  Ins.  Co.,  214,  241. 
Ricker  v.  Charter  Oak  Life  Ins.  Co.,  682,  690,  695. 
Rickerson  v.  Hartford  Fire  Ins.  Co.,  772,  774. 
Riddlesbarger  v.  Hartford  Ins.  Co.,  450,  458,  760. 
Ridley  v.  Bnnis,  677, 
Rife  V.  Lebanon  Mut.  Ins.  Co.,  418,  714. 
Riggs  V.  Commercial  Mut.  Ins.  Co.,  275,  278. 

V.  Palmer,  391. 
Riley  v.  Hartford  Ins.  Co.,  70. 
Riner  v.  Riner,  284. 

Rines  v.  German  Ins.  Co.,  455,  471,  475,' 477,  686. 
Ring  V.  Phoenix  Assur.  Co.,  343. 
Ripley  v.  Railway  Passengers'  Assur.  Co.,  393. 
Rissler  v.  American  Cent.  Ins.  Co.,  111. 
Ritch  V.  Masons'  Fraternal  Ace.  Ass'n,  428. 
Ritter  v.  Boston  Underwriters'  Ins.  Co.,  427,  521,  552. 

V.  Mutual  Life  Ins.  Co.,  355,  389,  393,  394,  778. 

V.  Preferred  Masonic  Mut.  Ace.  Ass'n,  386. 
Rittler  v.  Smith,  286,  680,  687. 
Rix  V.  Mutual  Ins.  Co.,  491,  492. 
Roberts  v.  Firemen's  Ins.  Co.,  365. 

V.  Germania  Fire  Ins.  Co.,  49. 

V.  Northwestern  Nat.  Ins.  Co.,  517,  551,  576,  586,  596,  718. 

V.  Sun  Mut.  Ins.  Co.,  233. 

V.  Willis  &  Taylor  Ins.  Co.,  234. 

V.  Winton,  117,  694, 
Robertson  v.  New  Hampshire  Ins.  Co.,  538. 

V.  United  States  Credit  System  Co.,  13, 
Roberts,  Willis  &  Taylor  Co.  v.  Sun  Mut.  Ins.  Co.,  220,  232,  236,  263. 
Robinson  v.  Continental  Ins.  Co.,  302. 

V.  Fire  Ass'n  of  Philadelphia,  409. 

V.  Hurst,  687. 

V.  International  Life  Assur.  Soc,  258. 

V.  Pacific  Fire  Ins.  Co.,  317, 

V,  Pennsylvania  Fire  Ins.  Co.,  588,  591,  595. 

V,  Templar  Lodge,  612,  630. 
Roby  V.  American  Cent.  Ins.  Co.,  315,  403,  405,  688,  715. 
Roche  V.  Supreme  Lodge,  K.  of  H.,  340. 
Rochester  Ins.  Co.  v.  Martin,  40. 


TABLK    OF    CASES.  861 

References  are  to  pages. 

Rockford  Ins.  Co.  v.  Nelson,  330,  713. 

V.  Williams,  263, 

V.  Winfield,  165. 
Rockhold  V.  Canton  Masonic  Mut.  Benev.  Soc,  292,  746,  749. 
Rodee  v.  Detroit  F.  &  M.  Ins.  Co.,  479,  489. 
Rodey  v.  Travelers'  Ins.  Co.,  385. 

Rodgers  v.  Mutual  Endowment  Assessment  Life  Ass'n,  160, 
Roe  V.  Dwelling  House  Ins.  Co.,  457. 
Rogers  v.  Aetna  Ins.  Co.,  424. 

V.  Charter  Oak  Life  Ins.  Co.,  83. 

V.  Home  Ins.  Co.,  424. 

V.  Mechanics'  Ins.  Co.,  141. 

V.  Phenix  Ins.  Co.,  Ill,  202,  326, 
Roger  Williams  Ins.  Co.  v.  Carrington,  48. 
Rohrhach  v.  Aetna  Ins.  Co.,  230,  537. 

V.  Germania  Fire  Ins.  Co.,  206,  275,  279,  346, 
Rohrschneider  v.  Knickerbocker  Life  Ins.  Co.,  443. 
Rokes  V.  Amazon  Ins.  Co.,  522-524,  556,  561. 
Roller  V.  Moore's  Adm'r,  284,  285. 
Rombach  v.  Piedmont  &  A.  Life  Ins.  Co.,  284. 
Roos  V.  Merchants'  Mut.  Ins.  Co.,  279. 
Roots  V.  Cincinnati  Ins.  Co.,  359, 
Rose  V.  Kimberly  &  Clark  Co.,  34. 
Rosebud  M.  &  M.  Co.  v.  Western  Assur.  Co.,  336. 
Rosenberger  v.  Washington  Mut.  Fire  Ins,  Co.,  122,  764. 
Rosenplaenter  v.  Provident  Sav.  Life  Assur.  Soc,  102,  117,  306. 
Rosenwald  v.  Phoenix  Ins.  Co.,  621. 
Rottier  v.  German  Ins.  Co.,  142.  424. 

Roumage  v.  Mechanics'  Fire  Ins.  Co.,  460,  482,  490,  493,  503. 
Rowe  V.  Rand,  258. 

Rowland  v.  Springfield  F.  &  M.  Ins.  Co.,  79. 
Rowley  v.  Empire  Ins.  Co.,  169, 
Royal  Canadian  Ins.  Co.  v.  Smith,  338. 
Royal  Ins.  Co.  v,  Beatty,  80,  107. 

V.  Clark,  268. 

V.  Home  Ins.  Co.,  729. 

v.  Mclntyre.  447,  621. 

V.  Parlin  &  0.  Co.,  655,  656. 

V.  Roodhouse,  649. 

V.  Stinson,  704. 
Ruggles  V.  American  Cent.  Ins.  Co.,  155,  158,  162,  184. 
Rumbold  v.  Penn  Mut.  Life  Ins.  Co.,  443. 
Rumford  Falls  Paper  Co.  v.  Fidelity  &  Casualty  Co.,  6. 


S62  TABLE    OF    CASES. 

References  are  to  pages. 

Rumsey  v.  Phoenix  Ins.  Co.,  583. 

Runkle  v.  Citizens'  Ins.  Co.,  231,  254,  256. 

V.  Lamar  Ins.  Co.,  760. 
Ruse  V.  Mutual  Ben.  Life  Ins.  Co.,  119,  283. 
Russell  V.  Canada  Life  Assur.  Co.,  340. 

V.  Cedar  Rapids  Ins.  Co.,  410,  418. 

V.  De  Grand,  309. 

V.  Detroit  Mut.  Fire  Ins.  Co.,  208,  219,  220,  408,  435. 

V,  Fidelity  Fire  Ins.  Co.,  496. 

V.  North  American  Ben.  Ass'n^609,  648. 
Rustin  V.  Standard  Life  &  Ace.  Ins.  Co.,  380,  398. 
Ruth  V.  Katterman,  284. 

Ruthven  v.  American  Fire  Ins.  Co.,  240,  256,  263,  558,  561,  565,  568. 
Ryan  v.  Rothweiler,  684. 

V.  Springfield  F.  &  M.  Ins.  Co.,  343. 

V.  World  Mut.  Life  Ins.  Co.,  230,  249. 
Rynalski  v.  Insurance  Co.  of  Pennsylvania,  473. 

Sadlers'  Co.  v.  Badcock,  275. 

Sagers  v.  Hawkeye  Ins.  Co.,  540,  543. 

St. 'Clair  County  Benev.  Soc.  v.  Fietsam,  131. 

St.  Clara  Female  Academy  v.  Delaware  Ins.  Co.,  149. 

St.  John  V.  American  Mut.  Life  Ins.  Co.,  285. 

St.  Louis  Ins.  Co.  v.  Kyle,  475,  482. 

St.  Louis  Mut.  Life  Ins.  Co.  v.  Kennedy,  76. 

St.  Nicholas  Ins.  Co.  v.  Merchants'  Mut.  F.  &  M.  Ins.  Co.,  134,  729, 

735,  740. 
St.  Onge  V.  Westchester  Fire  Ins.  Co.,  717. 
St.  Paul  F.  &  M.  Ins.  Co.  v.  Coleman,  302. 

V.  Gotthelf,  551,  596,  650. 

V.  Johnson,  439. 

V.  Kelly,  277. 

V.  Parsons,  156. 

V.  Shaver,  149,  171,  172. 

V.  Upton,  299. 
St.  Paul  German  Ins.  Co.,  In  re,  427. 
Salisbury  v.  Brisbane,  258. 

V.  Hekla  Fire  Ins.  Co.,  55,  115. 
Sampson  v.  Bagley,  10. 

V.  Grogan,  436. 

V.  Security  Ins.  Co.,  367. 
Sanborn  v.  Black,  691. 

V.  Fireman's  Ins.  Co.,  46-48. 


TABLE    OF    CASES.  8G3 

References  are  to  pages. 

Sanches  v.  Davenport,  271. 
Sanders  v.  Cooper,  71^,  762,  772-774. 
Sandford  v.  Orient  Ins.  Co.,  60. 
V.  Trust  Fire  Ins.  Co.,  53,  84. 
San  Diego,  O.  T.  &  P.  B.  R.  Co.  v.  Pacific  Beach  Co.,  727. 
Sands  v.  New  York  Life  Ins.  Co.,  258. 
Sanford  v.  Mechanics'  Mut.  Fire  Ins.  Co.,  18. 

V.  Orient  Ins.  Co.,  46,  158,  456,  589. 
Sargent  v.  National  Fire  Ins.  Co.,  60. 

V.  Supreme  Lodge,  K.  of  H.,  124. 
Sarsfield  v.  Metropolitan  Ins.  Co.,  335. 
Sater  v.  Henry  County  Farmers'  Ins.  Co.,  4.7,  105. 
•  Savage  v.  Howard  Ins.  Co.,  675. 
Saville  v.  Aetna  Ins.  Co.,  408. 
Sawtelle  v.  Railway  Passenger  Assur.  Co.,  398. 
Sawyer  v.  Dodge  County  Mut.  Ins.  Co.,  68,  275,  368. 
Scammell  v.  China  Mut.  Ins.  Co.,  63. 
Scammon  v.  Germania  Ins.  Co.,  450,  458,  460,  489. 
Scania  Ins.  Co.  v.  Johnson,  649,  677. 
Schaffer  v.  Mutual  Fire  Ins.  Co.,  76,  95. 
Scheiderer  v.  Travelers'  Ins.  Co.,  397,  522,  523. 
Schenck  v.  Mercer  Co.  Mut.  Fire  Ins.  Co.,  487,  779. 
Scheufler  v.  Grand  Lodge,  A.  O.  U.  W.,  779. 
Schlamp  v.  Berner's  Adm'r,  687. 
Schlater  v.  Winpenny,  258. 
Schlutz  V.  Boyd,  764. 
Schmid  v.  Virginia  F.  &  M.  Ins.  Co.,  149. 
Schmidt  v.  City  &  Village  Fire  Ins.  Co.,  530. 

V.  Mutual  C.  &  V.  Fire  Ins.  Co.,  344. 

V.  Northern  Life  Ass'n,  392,  685. 

V.  Peoria  M.  &  F.  Ins.  Co.,  325. 
Schmitt  V.  National  Life  Ass'n,  529. 
Schmurr  v.  State  Ins.  Co.,  317,  579. 
Schneider  v.  Provident  Life  Ins.  Co.,  381. 
Schoep  V.  Bankers'  Alliance  Ins.  Co.,  203. 
Scholefield  v.  Eichelberger,  20. 
Schollenberger,  Ex  parte,  760. 
Schomer  v.  Hekla  Fire  Ins.  Co.,  232. 
Schoneman  v.  Western  Horse  &  Cattle  Ins.  Co.,  293. 
Schonfield  v.  Turner,  283,  685. 

Schoolcraft's  Adm'r  v.  Louisville  &  N.  R.  Co.,  23,  26. 
School  Dist.  No.  4  v.  State  Ins.  Co.,  69,  70. 
Schouweiler  v.  Merchants'  Mut.  Ins.  Ass'n,  633,  664,  665. 


8G4  TABLE    OF    CASES. 

References  are  to  pages. 

Schreiber  v.  German-American  Hail  Ins.  Co.,  134,  179,  188,  291,  302, 

309,  313,  628,  633,  715. 
Schreiner  v.  High  Court,  C.  O.  of  F.,  685. 

Schrepfer  v.  Rockford  Ins.  Co.,  616,  624,  626,  627,  663,  668,  768,  770. 
Schrick  v.  St.  Louis  Mut.  House  Bldg.  Co.,  124. 
Scliroeder  v.  Springfield  F.  &  M.  Ins.  Co.,  220. 

V.  Trade  Ins.  Co.,  101,  135. 
Schulter  v.  Merchants'  Mut.  Ins.  Co.,  535. 
Schultz  V.  Citizens'  Mut.  Life  Ins.  Co.,  682. 

V.  Hawkeye  Ins.  Co.,  118. 

V.  Mutual  Life  Ins.  Co.,  393. 

V.  Phenix  Ins.  Co.,  84. 
Schunck  v.  Gegenseitiger  Wittwen  &  Waisen  Fond,  206. 
Schuster  v.  Dutchess  County  Ins.  Co.,  529. 
Schwartz  v.  Germania  Life  Ins.  Co.,  83,  90,  92,  93,  294. 
Scott  V.  Dickson,  289. 

V.  German  Ins.  Co.,  219. 

V.  Home  Ins.  Co.,  105,  179,  296. 

V.  Phoenix  Assur.  Co.,  618. 
Scottish  U.  &  N.  Ins.  Co.  v.  Clancy,  553,  591,  599,  602,  604,  662,  672. 

V.  Keene,  470,  497,  541. 

V.  Petty,  399. 

V.  Stubbs,  333. 
Scripture  v.  Lowell  Mut.  Fire  Ins.  Co.,  358,  370,  372. 
Scurry  v.  Cotton  States  Life  Ins.  Co.,  63. 
Seal  V.  Farmers'  &  Merchants'  Ins.  Co.,  349. 
Seamap  v.  Enterprise  F.  &  M.  Ins.  Co.,  278. 
Seamans  v.  Christian  Bros.  Mill  Co.,  28,  32,  180. 

V.  Knapp-Stout  &  Co.  Company,  28,  34,  137-139,  173,  200. 

V.  Temple  Co.,  34,  139, 

V.  Zimmerman,  34. 
Searle  v.  Dwelling--House  Ins.  Co.,  263,  558,  562,  586. 
Seavey  v.  Central  Mut.  Fire  Ins.  Co.,  364. 
Security  F.  Ins.  Co.  v.  Kentucky  M.  &  F.  Ins.  Co.,  48. 
Security  Ins.  Co.  v.  Ft.y,  86,  108. 

V.  Mette,  196. 
Seibel  v.  Northwestern  Mut.  Relief  Ass'n,  317,  714. 
Seiders  v.  Merchants'  Life  Ass'n,  139. 
Seller  v.  Economic  Life  Ass'n,  394. 
Selby  V.  Mutual  Life  Ins.  Co.,  317. 
Semmes  v.  Hartford  Ins.  Co.,  428. 
Sergent  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  135.  ^ 

V.  London  &  L.  &  G.  Ins.  Co.,  460, 


TABLE    OF    CASES. 


865 


References  are  to  pages. 

Seward  v.  City  of  Rochester,  618. 

Sexton  V.  Hawkeye  Ins.  Co.,  412. 

Seyk  V.  Millers'  Nat.  Ins.  Co.,  139,  446,  538,  621. 

Seymour  v.  Chicago  Guaranty  Fund  Life  Soc,  44,  732,  746. 

Shackett  v.  People's  Mut.  Ben.  Soc,  428. 

Shaffer  v.  Milwaukee  Mechanics'  Ins.  Co.,  216,  710. 

V.  Spangler,  692. 
Shakman  v.  United  States  Credit  System  Co.,  6,  13. 
Shannon  v.  Gore  District  Mut.  Fire  Ins.  Co.,  230. 

V.  Hastings  Mut.  Ins.  Co.,  505. 
Shapiro  v.  Western  Home  Ins.  Co.,  459,  460,  563. 
Sharland  v.  Washington  Life  Ins.  Co.,  775. 
Shattuck  V.  Mutual  Life  Ins.  Co.,  89,  138. 
Shaw  V.  Aetna  Ins.  Co.,  268,  278. 

V.  Republic  Life  Ins.  Co.,  63,  312,  591,  731,  752. 

V.  Scottish  Commercial  Ins.  Co.,  534. 
Shawmut  Sugar  Refining  Co.  v.  People's  Mut.  Fire  Ins.  Co.,  492,  500. 
Shea  V.  Massachusetts  Ben.  Ass'n,  685. 
Sheanon  v.  Pacific  Mut.  Life  Ins.  Co.,  379,  453,  517. 
Shearman  v.  Niagara  Fire  Ins.  Co.,  401. 
Sheehan  v.  Southern  Ins.  Co.,  554,  578. 
Sheerer  v.  Manhattan  Life  Ins.  Co.,  308. 
Shelden  v.  National  Masonic  Ace.  Ass'n,  312. 
Sheldon  v.  Atlantic  F.  &  M.  Ins.  Co.,  83. 

V.  Connecticut  Mut.  Life  Ins.  Co.,  89,  92,  121,  245,  250,  294. 

V.  Hartford  Fire  Ins.  Co.,  334. 

V.  Hekla  Fire  Ins.  Co.,  83. 

V.  National  Masonic  Ace.  Ass'n,  306. 
Shellenberger  v.  Ransom,  391. 
Sheppard  v.  Peabody  Ins.  Co.,  108. 
Sherman  v.  Com.,  24,  339. 

V.  Madison  Mut.  Ins.  Co.,  440, 
Sherwood  v.  Agricultural  Ins.  Co.,  101,  484. 
Shevlin  v.  American  Mut.  Ace.  Ass'n,  398. 
Shields  v.  Equitable  Life  Assur.  Soc,  96,  295. 
Shimp  V.  Cedar  Rapids  Ins.  Co.,  555. 
Shoemaker  v.  Glens  Falls  Ins.  Co.,  322. 
Shoenfeld  v.  Fleisher,  271. 
Shugart  v.  Lycoming  Fire  Ins.  Co.,  238. 
Sibley  v.  Prescott  Ins.  Co.,  278,  437. 

V.  St.  Paul  F.  &  M.  Ins.  Co.,  535. 
Side  V.  Knickerbocker  Life  Ins.  Co.,  289. 
Siebel  v.  Northwestern  Mut.  Relief  Ass'n,  345. 

KERR,  INS.— 55. 


S66  TABLE    OF  CASES. 

References  are  to  pages. 

Sierra  M.,  S.  &  M.  Co.  v.  Hartford  Fire  Ins.  Co.,  334. 

Sieverts  v.  National  Benev.  Ass'n,  110,  122,  124,  313,  347. 

Sillem  V.  Thornton,  335. 

Silver  v.  "Western  Assur.  Co.,  665. 

Silverberg  v.  Phenix  Ins.  Co.,  232. 

Silverman  v.  Empire  Life  Ins.  Co.,  339. 

Simcoke  v.  Grand  Lodge,  A.  O.  U.  W.,  287,  690. 

Simeral  v.  Dubuque  Mut.  Fire  Ins.  Co.,  9. 

Simmons  v.  West  Virginia  Ins.  Co.,  514. 

Simms  v.  State  Ins.  Co.,  365. 

Simons  v.  Iowa  State  T.  M.  Ass'n,  466,  492,  496,  498,  501. 

V.  New  York  Life  Ins.  Co.,  224,  230. 
Simonton  v.  Liverpool,  L.  &  G.  Ins.  Co.,  49. 
Sims  v.  Mutual  Fire  Ins.  Co.,  701,  702. 
Singleton  v.  Prudential  Ins.  Co.,  230. 

V.  St.  Louis  Mut.  Ins.  Co.,  284. 
Sisk  V.  Citizens'  Ins.  Co.,  373,  376. 
Skillern  v.  Continental  Ins.  Co.,  301. 
Slater  v.  Capital  Ins.  Co.,  178,  567. 
Sleeper  v.  N.  H.  F.  Ins.  Co.,  412,  530,  536. 
Slobodisky  v.  Phenix  Ins.  Co.,  7,  146,  244,  294,  710. 
Smaldone  v.  Insurance  Co.  of  North  America,  561. 
Small  V.  Jose,  681. 
Smith  V.  Agricultural  Ins.  Co.,  335,  783. 

V.  Binder,  271. 

V.  Boston  &  Maine  R.  R.  Ass'n,  691. 

V.  Cash  Mut.  Fire  Ins.  Co.,  226. 

V.  Columbia  Ins.  Co.,  277. 

V.  Commonwealth  Ins.  Co.,  219,  492,  500. 

V.  Continental  Ins.  Co.,  715. 

V.  Covenant  Mut.  Ben.  Ass'n,  684,  763. 

V.  Empire  Ins.  Co.,  326. 

v.  Exchange  Fire  Ins.  Co.,  536. 

r.  Farmers'  &  Mechanics'  Mut.  Fire  Ins.  Co.,  221,  231. 

V.  German  Ins.  Co.,  241. 

V.  Glens  Falls  Ins.  Co.,  760. 

V.  Haverhill  Mut.  Fire  Ins.  Co.,  453,  459,  520,  548,  554,  592. 

V.  Home  Ins.  Co.,  167,  508,  509,  567,  570,  579. 

V.  Hunterdon  County  Mut.  Fire  Ins.  Co.,  746,  751,  757,  758. 

V.  International  Life  Assur.  Co.,  37. 

V.  Mutual  Life  Ins.  Co.,  138. 

V.  National  Ben.  Soc,  687. 

T.  National  Credit  Ins.  Co.,  6,  104,  451,  552. 


TABLE    OF   CASES.  867 

References  are  to  pages. 

Smith  V.  National  Life  Ins.  Co.,  56,  308,  311. 

V.  Niagara  Fire  Ins.  Co.,  214,  240,  524,  561,  563,  566. 

V.  Phoenix  Ins.  Co.,  404. 

V.  Preferred  Mut.  Ace.  Ass'n,  394,  397. 

V.Price,  271. 

V.  Queen  Ins.  Co.,  536. 

V.  St.  Louis  Mut.  Life  Ins.  Co.,  119,  721,  747,  751,  754,  756. 

V.  St.  Paul  F.  &  M.  Ins.  Co.,  317. 

V.  State  Ins.  Co.,  115,  548,  593. 
Sneed  v.  British  America  Assur.  Co..  543. 
Snell  V.  Atlantic  F.  &  M.  Ins.  Co.,  146. 

V.  Delaware  Ins.  Co.,  68. 
Snow  V.  Carr,  365. 

V.  Mercantile  Mut.  Ins.  Co.,  348. 
Snowden  v.  Kittanning  Ins.  Co.,  602. 
Snowdon  v.  Guion,  68-70. 
Snyder  v.  Dwelling  House  Ins.  Co.,  416,  561. 
Soars  V.  Home  Ins.  Co.,  631. 
Soli  V.  Farmers'  Mut.  Ins.  Co.,  359,  361,  368. 
Solomon  v.  Continental  Fire  Ins.  Co.,  485. 
Somers  v.  Kansas  Protective  Union,  82. 
Somerset  Co.  Mut.  Fire  Ins.  Co.  v.  Usaw,  776. 
Sonneborn  v.  Manufacturers'  Ins.  Co.,  411. 
Southard  v.  Railway  Passengers'  Assur.  Co.,  5,  382,  384. 
Southern  Home  B.  &  L.  Ass'n  v.  Home  Ins.  Co.,  459,  465,  519. 
Southern  Ins.  Co.  v.  Hastings,  213. 

V.  White,  334.    > 
Southern  Insurance  &  T.  Co.  v.  Lewis,  280. 
Southern  Life  Ins.  Co.  v.  Booker,  182,  184,  193,  244,  249. 

V.  Kempton,  93,  317. 

V.  McCain,  162,  202,  259,  265,  266. 
Southern  Mut.  Ins.  Co.  v.  Turnley,  428,  602. 
Southern  Mut.  Life  Ins.  Co.  v.  Montague,  119. 
Southwick  V.  Atlantic  F.  &  M.  Ins.  Co.,  401. 
Sovereign  Camp,  W.  of  W.  v.  Rothschild,  191,  209,  313. 
Sowden  v.  Standard  Ins.  Co.,  207. 
Spare  v.  Home  Mut.  Ins.  Co.,  150,  279,  425,  688,  716. 
Sparks  v.  Knight  Templars'  &  M.  Life  Ind.  Co.,  338. 
Spaulding  v.  Vermont  Mut.  Fire  Ins.  Co.,  515,  517. 
Speer  v.  Phoenix  Mut.  Life  Ins.  Co.,  442. 
Spensley  v.  Lancashire  Ins.  Co.,  372. 
Speery  v.  Springfield  F.  &  M.  Ins.  Co.,  65. 
Spies  v.  Greenwich  Ins.  Co.,  333. 


8G8  TABLE    OF   CASES. 

References  are  to  pages. 

Spitz  V.  Mutual  Ben.  Life  Ass'n,  176,  511. 
Sprague  v.  Holland  Purchase  Ins.  Co.,  206. 
Spratley  v.  Hartford  Ins.  Co.,  364. 
Spratt  V.  New  Orleans  Ins.  Ass'n,  332. 
Springfield  F.  &  M.  Ins.  Co.  v.  Brown,  479,  482,  484. 

V.  Cannon,  357. 

V.  Davis,  232,  259,  561. 

V.  Payne,  623,  635,  640,  649,  650,  656. 

V.  Winn,  534. 
Sproul  V.  Western  Assur.  Co.,  47,  588,  589. 
Spruill  V.  North  Carolina  Mut.  Life  Ins.  Co.,  393. 
Spry  V.  Williams,  681. 
Spurr  V.  Home  Ins.  Co.,  146,  148,  149. 
Squier  v.  Hanover  Fire  Ins.  Co.,  105,  245. 
Stache  v.  St.  Paul  F.  &  M.  Ins.  Co.,  444. 
Stadler  v.  Trever,  62,  271. 
Stambaugh  v.  Blake,  284. 
Stambler  v.  Order  of  Pente,  574. 
Stamm  v.  Northwestern  Mut.  Ben.  Ass'n,  746,  758. 
Stamps  V.  Commercial  Fire  Ins.  Co.,  440. 
Standard  Fire  Ins.  Co.  v.  Wren,  434,  766. 
Standard  Ins.  Co.  v.  Langston,  397. 
Standard  Life  &  Ace.  Ins.  Co.  v.  Davis,  549,  556,  569. 

v.  Fraser,  158. 

V.  Koen,  576,  588.         , 

V.  Schmaltz,  383. 

V.  Taylor,  773. 

V.  Thornton,  428,  588. 

V.  Ward,  386. 
Standard  Oil  Co.  v.  Amazon  Ins.  Co.,  346. 

V.  Triumph  Ins.  Co.,  201. 
Stark  County  Mut.  Ins.  Co.  v.  Hurd,  238. 
Startling  v.  Supreme  Council,  R.  T.  of  T.,  122. 
Star  Union  Lumber  Co.  v.  Finney,  537. 
State  V.  Ackerman,  23,  36. 

v.  Bankers'  &  Merchants'  Mut.  Ben.  Ass'n,  143. 

V.  Beazley,  38. 

v.  Board  of  Insurance  Comm'rs,  23. 

V.  Brawner,  24. 

V.  Citizens'  Ben.  Ass'n,  24. 

V.  Farmer,  173. 

v.  Farmers'  &  M.  Mut.  Ben.  Ass'n,  12,  24. 

V.  Federal  Inv.  Co.,  4-6,  14. 


TABLE    OF    CASES.  869 

References  are  to  pages. 

State  V.  Fidelity  &  Casualty  Ins.  Co.,  25,  26,  36. 

V.  Fireman's  Fund  Ins.  Co.,  23,  35. 

V.  Fricke,  511. 

V.  Hancock,  745. 

V.  Hogan,  6,  12. 

V.  Insurance  Co.  of  North  America,  36, 

V.  Iowa  Mut.  Aid  Ass'n,  24. 

V.  Johnson,  23,  25,  167,  173,  174,  201. 

V.  Lancashire  Fire  Ins.  Co.,  23,  35. 

V.  Manufacturers'  Mut.  Fire  Ass'n,  41,  44, 

V.  Mathews,  25. 

V.  Miller,  24. 

V.  Monitor  Fire  Ass'n,  43,  724,  747,  748,  755. 

V.  Moore,  23,  24. 

V.  Mutual  Protective  Ass'n,  24, 

V.  National  Ace.  Soc.  of  N.  Y.,  24. 

V.  National  Ass'n,  24. 

V.  New  England  Mut.  Ins.  Co.,  25. 

V.  Nichols,  24,  339. 

V.  Northwestern  Mut.  L.  Stock  Ass'n,  24. 

V.  Phipps,  23. 

V.  Reimund,  36. 

V.  Scougal,  26. 

V.  Stone,  23,  26,  173. 

V.  Tomlinson,  695. 

V.  Towle,  351. 

V.  United  States  Mut.  Ace.  Ass'n,  88. 

V.  Vigilant  Ins.  Co.,  12,  24. 

V.  Western  Union  Mut.  Life  Ins.  Co.,  36. 

V.  Williams,  38. 
State  Ins.  Co.  v.  Belford,  767. 

V.  Hughes,  131. 

V.  Jordan,  335. 

V.  Maackens,  135,  136,  490,  515,  517-519,  538,  582. 

V.  Meesman,  426. 

V.  Richmond,   270. 

V.  Taylor,  418,  429,  433. 
State  Mut.  Fire  Ins.  Ass'n  v.  Brinkley  Stave  &  Heading  Co.,  34,  37, 

84,  137,  139. 
State  Mut.  Fire  Ins.  Co.  v.  Arthur,  322. 
Stebbins  v.  Globe  Ins.  Co.,  327. 

V.  Lancashire  Ins.  Co.,  90,  94,  100,  166. 
Steel  V.  Phoenix  Ins.  Co.,  67,  426. 


870  TABLE    OF    CASES. 

References  are  to  pages. 

Steele,  In  re,  697. 

V.  German  Ins.  Co.,  215,  254,  473. 
Steen  v.  Niagara  Fire  Ins.  Co.,  158,  185,  425,  558. 
Steers  v.  Home  Ins.  Co.,  415. 
Stehlich  V.  Milwaukee  Mechanics'  Ins.  Co.,  55. 
Steinbach  v.  Relief  Fire  Ins.  Co.,  148,  363,  416,  419. 
Stelick  V.  Milwaukee  Mechanics'  Ins.  Co.,  158. 
Stemmer  v.  Scottish  U.  &  N.  Ins.  Co.,  636,  640,  652,  654. 
Stensgaard  v.  National  Fire  Ins.  Co.,  413. 

V.  St.  Paul  Real  Estate  Tile  Ins.  Co.,  7,  344. 
Stephens  v.  Illinois  Mut.  Fire  Ins.  Co.,  276. 

V.  Railway  OflBcials'  &  Employes'  Ace.  Ass'n,  385. 

V.  Union  Assur.  Soc,  669. 
Stephenson  v.  Bankers'  Life  Ass'n,  492,  514,  767,  771. 

V.  Piscataqua  F.  &  M.  Ins.  Co.,  610. 

V.  Stephenson,  691. 
Sterling  v.  Mercantile  Mut.  Ins.  Co.,  770. 
Sternberg  v.  Levy,  694. 
Sternfield  v.  Park  Fire  Ins.  Co.,  535. 
Stetson  V.  Massachusetts  Mut.  Fire  Ins.  Co.,  407. 
Stevens  v.  Citizens'  Ins.  Co.,  427. 

V.  Warren,  687. 
Stevenson  v.  Phoenix  Ins.  Co.,  408. 
Stevers  v.  People's  Mut.  Ace.  Ins.  Ass'n,  379. 
Steward  v.  Phoenix  Fire  Ins.  Co.,  118,  433. 
Stewart  v.  Helvetia  S.  F.  Ins.  Co.,  60. 

V.  Union  Mut.  Life  Ins.  Co.,  249,  299. 
Stigler's  Ex'r  v.  Stigler,  682,  695. 
Stock  V.  Inglis,  436. 

Stockton  V,  Firemen's  Ins.  Co.,  77,  82,  203. 
Stockton  Combined  H.  &  A.  Works  v.  Glens  Falls  Ins.  Co.,  643,  657, 

667. 
Stohr  v.  San  Francisco  M.  F.  Soc,  124. 
Stokes  V.  Amerman,  694. 

v.  Coffey,  695. 
Stolle  V.  Aetna  F.  &  M.  Ins.  Co.,  239. 
Stoltenberg  v.  Continental  Ins.  Co.,  780. 
Stone  v.  Hawkeye  Ins.  Co.,  214,  221,  231,  852,  776. 
Stone's  Adm'rs  v.  United  States  Casualty  Co.,  118,  337. 
Story  V.  Williamsburgh  Mut.  Ben.  Ass'n,  681. 
Stout  V.  City  Fire  Ins.  Co.,  323. 
Stowe  V.  Phinney,  682. 
Straker  v.  Phenix  Ins.  Co.,  143,  231,  235,  244,  562,  712. 


TABLE    OF    CASES.  871 

References  are  to  pages. 

Straub  v.  Grand  Lodge,  A.  0.  U.  W.,  777. 
Strauss  v.  Imperial  Fire  Ins.  Co.,  375. 

V.  Phenix  Ins.  Co.,  220. 
Straw  V.  Truesdale,  640. 

Streeter  v.  Western  Union  Miit.  L.  &  A.  Soc,  383. 
Strickland  v.  Council  Bluffs  Ins.  Co.,  203. 
Strohn  v.  Hartford  Fire  Ins.  Co.,  16,  68,  365. 
Strome  v.  London  Assur.  Corp.,  775. 
Strong  V.  American  Cent.  Life  Ins.  Co.,  737. 

V.  Manufacturers'  Ins.  Co.,  275,  342. 

V.  Phoenix  Ins.  Co.,  721. 
Stupetski  V.  Transatlantic  Fire  Ins.  Co.,  413. 
Sturm  V.  Boker,  676. 

V.  Great  Western  Ins.  Co.,  69. 
Sullivan  v.  Phenix  Ins.  Co.,  167,  208. 
Sulz  V.  Mutual  Reserve  Fund  Life  Ass'n,  683. 
Summerfield  v.  North  British  &  M.  Ins.  Co.,  643,  670, 

V.  Phoenix  Assur.  Co.,  455,  457,  473,  474,  492,  500,  502,  507,  511, 
512,  514. 
Summers  v.  Commercial  Union  Assur.  Co.,  203. 

V.  United  States  I.  A.  &  T.  Co.,  288. 
Sun  Fire  Office  v.  Ermentrout,  269. 

V.  Fraser,  770. 

V.  Wich,  69,  70,  156,  164. 
Sun  Ins.  Co.  v.  Jones,  424. 
Sun  Ins.  Office  v.  Merz,  723,  725. 

V.  Varble,  440. 
Sun  Mut.  Ins.  Co.  v.  Mattingly,  473. 

V.  Ocean  Ins.  Co.,  729,  733. 
Supreme  Commandery  K.  of  G.  R.  v.  Ainsworth,  123,  124. 
Supreme  Council  v.  Garrigus,  5. 

V.  Green,  346. 
Supreme  Council,  A.  L.  of  H.  v.  Adams,  124. 

V.  Green,  189. 

V.  Perry,  685. 

V.  Smith,  691. 
Supreme  Council,  C,  B.  L,  v.  Boyle,  453,  520,  607. 
Supreme  Council,  C.  K.  of  A.  v.  Franke,  690. 
Supreme  Council,  L.  of  H.  v.  Adams,  127. 
Supreme  Council.  0.  C.  F.  v.  Fairman,  24. 

v.  Forsinger,  611,  613. 

V.  Garrigus,  381. 


872  TABLE   OF   CASES. 

References  are  to  pages. 

Supreme  Council  of  R.  A.  v.  Brashears,  121. 
Supreme  Council,  R.  T.  of  T.  v.  Curd,  130,  134. 
Supreme  Lodge  v.  Goldberger,  607. 
Supreme  Lodge,  K.  H.  W.  v.  Johnson,  779. 
Supreme  Lodge,  K.  of  H.  t.  Davis,  312. 

V.  Dickison,  341. 

V.  Metcalf,  770. 

V.  Nairn,  691. 
Supreme  Lodge,  K.  of  P.  v.  Beck,  389. 

V.  Knight,  126. 

V.  Kutscher,  124. 125. 

V.  La  Malta,  124,  125. 

V.  Stein,  122,  125. 

V.  Taylor,  347, 

V.  Trebbe,  124,  125. 

V.  Withers,  192,  206. 
Supreme  Lodge  Nat.  Reserve  Ass'n  y.  Turner,  31$, 
Supreme  Lodge  of  Protection  v.  Grace,  76,  81. 
Supreme  Lodge,  O.  S.  F.  v.  Dey,  612,  614,  619. 

V.  Raymond,  759. 
Supreme  Tent,  K.  of  M.  v.  Hammers,  127. 
Survick  v.  Valley  Mut.  Life  Ass'n,  311,  313. 
Susquehanna  Mut.  Fire  Ins.  Co.  v.  Cusick,  167. 

V.  Leavy,  120. 

V.  Staats,  598. 

V.  Swank,  149,  203. 

V.  Tunkhannock  Toy  Co.,  526. 
Sussex  County  Mut.  Iris.  Co.  v.  Woodruff,  276,  704. 
Sutherland  v.  Eureka  F.  &  M.  Ins.  Co.,  158,  233-235,  710. 

V.  Pratt,  99. 
Swain  v.  Agricultural  Ins.  Co.,  184,  261. 

V.  Security  Live-Stock  Ins.  Co.,  458,  464. 
Swan  V.  Liverpool  L.  &  G.  Ins.  Co.,  482. 

V.  Watertown  Fire  Ins.  Co.,  28,  221. 
Sweat  V.  Piscataquis  Mut.  Ins.  Co.,  343,  345. 
Sweet  V.  Morrison,  655. 

Sweetser  v.  Odd  Fellows'  Mut.  Aid  Ass'n,  245,  316. 
Swett  V.  Citizens'  Mut.  Relief  Soc,  265,  336,  345. 
Swift  V.  Railway  Passenger  &  F.  C.  Mut.  Aid  &  Ben.  Ass'n,  298. 

V.  Vermont  Mut.  Fire  Ins.  Co.,  275. 
Sydney,  The,  134.  * 

Syndicate  Ins.  Co.  v.  Bohn,  332,  398,  399,  430,  678. 


TABLE    OF   CASES. 


References  are  to  pages. 


873 


Taber  v.  Royal  Ins.  Co.,  427. 
Talamon  v.  Home  &  Citizens'  Mut,  Ins.  Co.,  374. 
Talbot  V.  Tlpperary  Men  N.,  S.  &  B.  Ass'n,  480. 
Talbott  V.  Fidelity  &  Casualty  Co.,  36. 
Talcott  V.  National  Credit  Ins.  Co.,  7. 
Taliaferro  v.  Travelers'  Protective  Ass'n,  382. 
Tanenbaum  v.  Rosenthal,  15,  259. 
Tarpey  v.  Security  Trust  Co.,  339. 
Tate  V.  Commercial  Bldg.  Ass'n,  284. 

V.  Hyslop,  204. 
Tatum  V.  State,  393. 
Tayloe  v.  Merchants'  Fire  Ins.  Co.,  61,  75,  84,  89,  244,  295,  456,  480, 

589. 
Taylor  v.  Aetna  Life  Ins.  Co.,  343,  422,  492,  498,  503. 
V.  Grand  Lodge,  A.  O.  U.  W.,  81. 
v.  Hill,  681. 

V.  Mutual  Reserve  Fund  Life  Ass'n,  760. 
V.  Pacific  Mut.  Life  Ins.  Co.,  767,  771,  781. 
V.  Phoenix  Ins.  Co.,  47,  107,  159. 
V.  State  Ins.  Co.,  75,  232. 
V.  Travellers'  Ins.  Co.,  289. 
Teague  v.  Germania  Fire  Ins.  Co.,  441. 
Tebbets  v.  Mercantile  Credit  Guarantee  Co.,  7,  13. 
Teerpenning  v.  Corn  Exchange  Ins.  Co.,  779. 
Temperance  Mut.  Ben.  Ass'n  v.  Home  Friendly  Soc,  724,  728,  757. 
Temple  v.  Niagara  Fire  Ins.  Co.,  543. 
Tennant  v.  Travellers'  Ins.  Co.,  89,  90,  93,  245,  312,  384. 
Teutonia  Fire  Ins.  Co.  v.  Mund,  131. 
Teutonia  Ins.  Co.  v.  Beard,  371. 
Texas  Banking  &  Insurance  Co.  v.  Hutchins,  216. 

v.  Stone,  325. 
Texas  Mut.  Life  Ins.  Co.  v.  Davidge,  295. 
Thayer  v.  Middlesex  Mut.  Fire  Ins.  Co.,  84. 
V.  Providence  W.  Ins.  Co.,  345. 
v.  Standard  L.  &  A.  Ins.  Co.,  385. 
Theobald  v.  Railway  Passengers'  Assur.  Co.,  393. 

v.  Supreme  Lodge,  K.  of  P.,  338. 
Theunen  v.  Iowa  Mut.  Ben.  Ass'n,  764. 
Thibeault  v.  St.  Jean  Baptist  Ass'n,  103. 
Thibert  v.  Supreme  Lodge,  K.  of  H.,  125,  128. 
Thierolf  v.  Universal  Fire  Ins.  Co.,  549,  550. 
Thomas  v.  Burlington  Ins.  Co.,  539. 
v.  Cummiskey,  365. 
V.  Hartford  Fire  Ins.  Co.,  329. 


874  TABLE    OF    CASES. 

References  are  to  pages. 

Thompson  v.  American  Tontine  L,  &  S.  Ins.  Co.,  693. 

V,  Blanchard,  650. 

V.  Cundiff,  693. 

V.  Knickerbocker  Life   Ins.  Co.,  56,  306,  310,  311,  317,  707, 

V.  Phoenix  Ins,  Co.,  66,  67,  150,  223,  278,  401,  405,  428,  431,  54&, 
688,  715. 

V.  St.  Louis  Ins,  Co.,  621. 
Thorne  v.  Aetna  Ins.  Co.,  409. 
Thurston  v.  Burnett  &  B,  D,  F,  Mut.  Fire  Ins.  Co.,  130,  135,  417,  419, 

V.  Union  Ins.  Co.,  360. 
Thwing  V.  Great  Western  Ins,  Co.,  297. 
Tiefenthal  v.  Citizens'  Mut.  Fire  Ins.  Co.,  535. 
Tilton  V.  Hamilton  Fire  Ins.  Co.,  374. 

V.  United  States  Life  Ins.  Co.,  653. 
Timberlake  v.  Beardsley,  187,  727. 
Titus  V.  Glens  Falls  Ins.  Co.,  536,  540,  590,  716. 
Tobin  V.  Western  Mut.  Aid  Soc,  763,  764,  779. 
Todd  V.  Germania  Fire  Ins.  Co.,   766. 

V.  Piedmont  &  A,  Life  Ins.  Co.,  76. 
Toledo  Tie  &  Lumber  Co.  v.  Thomas,  29. 
Tompkins  v.  Levy,  694. 
Tood  V.  Piedmont  &  A.  Life  Ins.  Co.,  203. 
Tooker  v.  Security  Trust  Co.,  212. 
Torrop  v.  Imperial  Fire  Ins.  Co.,  203. 
Town  V.  Springfield  F.  &  M.  Ins.  Co.,  530. 
Towne  v.  Fire  Ass'n  of  Philadelphia,  368.  ' 

V.  Fitchburg  Mut.  Fire  Ins.  Co.,  o28. 

V.  Springfield  F.  &  M.  Ins.  Co.,  473,  497,  500,  536. 
Traband  v.  Connecticut  Mut.  Life  Ins.  Co.,  350. 
Trabandt  v.  Connecticut  Mut.  Life  Ins.  Co.,  150. 
Trabue  v.  Dwelling  House  Ins.  Co.,  402,  405,  688. 
Trade  Ins.  Co.  v.  Barracliff,  300,  368,  675. 
Traders'  Ins.  Co.  v.  Cassell,  215. 

V,  Newman,  281. 

V.  Pacaud,  440, 

V,  Race,  413,  704. 

V.Robert,  276. 
Traders'  &  Travellers'  Ace.  Co.  v.  Wlagley,  337. 
Traill  v.  Baring,  733. 

Train  v.  Holland  Purchase  Ins.  Co.,  78,  162,  178. 
Trans-Atlantic  Fire  Ins.  Co.  v.  Dorsey,  370. 

Trask  v.  State  F.  &  M.  Ins.  Co.,  481,  484,  488,  525,  548,  585,  592,  594, 
Travelers'  Ins.  Co.  v.  California  Ins.  Co,,  423,  425. 

V.  Dunlap,  388. 


TABLE    OF    CASES.  875 

References  are  to  pages. 

Travelers'  Ins.  Co.  v.  Edwards,  183,  493,  515,  522,  523,  556,  562. 

V,  Harvey,  182,  184. 

V.  Henderson,  149. 

V.  Jones,  397. 

V.  McConkey,  382,  390,  395,  396,  432,  778,  781. 

V.  Melick,  377,  528,  529. 

V.  Murray,  377. 

V.  Randolph,  394. 

V.  Seaver,  378,  389. 

V.  Sheppard,  489. 

V.  Snowden,  394. 
Travis  v.  Peabody  Ins.  Co.,  76,  149. 
Trenton  Mut.  L.  &  F.  Ins.  Co.  v.  Johnson,  288. 
Trenton  Passenger  Ry.  Co.  v.  Guarantors'  Liability  Ind.  Co.,  6,  13. 
Trimble  v.  New  York  Life  Ins.  Co..  306. 
Trinity  College  v.  Travellers'  Ins.  Co.,  284. 
Triple  Link  Mut.  Ind.  Ass'n  v.  Williams,  337. 
Tripp  V.  Northwestern  Live-Stock  Ins.  Co.,  164,  188,  382. 

v.  Provident  Fund  Soc,  450,  452,  454,  458,  459,  466,  477,  481,  549, 
569,  707. 
Tritschler  v.  Keystone  Mut.  Ben.  Ass'n,  395. 
Trott  V.  Chicago,  R.  I.  &  P.  Ry.  Co.,  775. 

V.  Woolwich  Mut.  Fire  Ins.  Co.,  717. 
Troy  Fire  Ins.  Co.  v.  Carpenter,  453. 
Trull  V.  Roxbury  Mut.  Fire  Ins.  Co.,  441. 
Trundle  v.  Providence  Wash.  Ins.  Co.,  567. 
Trustees  v.  Rome,  25. 
Trustees  of  First  Baptist  Church  v.  Brooklyn  Fire  Ins.  Co.,  52,  250, 

291,  293,  774. 
Trusteesvof  St.  Clara  Female  Academy  v.  Northwestern  Ins.  Co.,  219, 

273,  621,  675. 
Tubbs  V.  Dwelling  House  Ins.  Co.,  461,  473. 

Turley  v.  North  American  Fire  Ins.  Co.,  502,  508,  511,  513,  574. 
Turner  v.  Fidelity  &  Casualty  Co.,  386,  427,  447,  549,  571,  572. 

v.  Phoenix  Ins.  Co.,  186. 
Tuttle  V.  Travellers'  Ins.  Co.,  397. 
Twiss  V.  Guaranty  Life  Ass'n,  41,  42,  724,  746,  748. 
Tyler  v.  New  Amsterdam  Fire  Ins.  Co.,  16,  47. 

V.  Odd  Fellows'  Mut.  Relief  Ass'n,  680. 

Uhrig  V.  Williamsburgh  City  Fire  Ins.  Co.,  637,  657,  667. 

Ulrich  V.  Reinoehl,  286,  287,  680,  692. 

Underbill  v.  Agawam  Mut.  Fire  Ins.  Co.,  434,  547,  596. 


876  TABLE    OF    CASES. 

References  are  to  pages. 

Underwriters'  Agency  v.  Sutherlin,  233. 

Underwood  v.  Farmers'  Joint  Stoclc  Ins.  Co.,  459. 

Underwood  Veneer  Co.  v.  London  Guarantee  &  Ace.  Co.,  6,  455,  458, 

462,  485,  486,  487. 
Union  Bldg.  Ass'n  v.  Rockford  Ins.  Co.,  299,  318. 
Union  Cent.  Life  Ins.  Co.  v.  Hollowell,  543. 

V.  Lee,  345. 

V.  Pauly,  92. 

V.  Pollard,  23,  137,  140,  143,  712,  775. 

V.  Pottker,  141. 

V.  Taggart,  295,  300. 
Union  Fraternal  League  v.  Walton,  283. 
Union  Ins.  Co.  v.  American  Fire  Ins.  Co.,  67,  102,  726,  730. 

V.  Chipp,  196,  201. 

V.  Glover,  689. 

V.  Greenleaf,  304. 

V.  McGookey,  178. 

V.  Smart,  86,  304. 

V.  Smith,  527. 
Union  Marine  Ins.  Co.  v.  Martin,  736. 
Union  Mut.  Ass'n  v.  Montgomery,  144. 
Union  Mut.  Fire  Ins.  Co.  v.  Keyser,  144. 
Union  Mut.  Ins.  Co.  v.  Wilkinson,  82,  151,  156,  159,  162,  169,  183,  186, 

231,  262. 
Union  Mut.  Life  Ins.  Co.  v.  McMillen,  29,  298. 

V.  Masten,  156,  265, 

V.  Mowry,  56,  65,  113,  134,  224,  734. 

V.  Reif,  338,  392. 

V.  Wilkinson,  349. 
Union  R.  Co.  v.  Dull,  635,  636,  656. 
United  Brethren  Mut.  Aid  Soc.  v.  McDonald,  284. 

V.  White,  336,  337,  345. 
United  Firemen's  Ins.  Co.  v.  Thomas,  168,  172,  235,  709. 
United  L.  F.  &  M.  Ins.  Co.  v.  Foote,  369. 
United  Security  Life  Ins.  &  Trust  Co.  v.  Ritchey,  13. 
United  States  v.  American  Tobacco  Co.,  275,  276. 

V.  Robeson,  645. 
United  States  F.  &  M.  Ins.  Co.  v.  Kimberly,  335. 
United  States  Life  Ins.  Co.  v.  Advance  Co.,  162,  187. 

V.  Ludwig,  764. 

V.  Smith,  339.  \ 

V.  Vocke,  775. 

V.  Wright,  309. 


TABLE    OF    CASES.  877 

References  are  to  pages. 

United  States  Mut.  Ace.  Ass'n  v.  Barry,  5,  381. 

V.  Hubbell,  383,  397. 

V.  Kitturing,  773. 

V.  Newman,  385. 
Universal  Life  Ins.  Co.  v.  Binford,  443. 
Universal  Mut.  Fire  Ins.  Co.  v.  Weiss,  69,  238. 
Unsell  V.  Hartford  Life  &  Annuity  Ins.  Co.,  589,  707. 
Upton  V.  Jackson,  747,  752. 
Utter  V.  Travelers'  Ins.  Co.,  389,  390. 

"Van  Allen  v.  Farmers'  Joint  Stock  Ins.  Co.,  563. 

Valley  Mut.  Life  Ass'n  v.  Teewalt,  288. 

Valton  V.  National  Fund  Life  Ins.  Co.,  286,  343,  345,  687. 

V.  National  L.  F.  Life  Assur.  Soc,  288. 
Vanderhoef  v.  Agricultural  Ins.  Co.,  413. 
Vangindertaelen  v.  Phenix  Ins.  Co.,  473,  578,  624. 
Van  Houten  v.  Pine,  310,  763,  764. 
Vankirk  v.  Citizens'  Ins.  Co.,  331. 
Van  Loan  v.  Farmers'  Mut.  F.  Ins.  Ass'n,  47,  51,  55. 
Van  Natta  v.  Mutual  Security  Ins.  Co.,  67. 
Van  Poucke  v.  Netherland  St.  V.  de  P.  Soc,  502,  505,  609. 
Van  Schoick  v.  Niagara  Fire  Ins.  Co.,  165,  255. 

Van  Slyke  v.  Trempealeau  County  Farmers'  Mut.  Fire  Ins.  Co.,  82. 
Van  Tuyl  v.  Westchester  Fire  Ins.  Co.,  147. 
Van  Valkenburgh  v.  American  Popular  Life  Ins.  Co.,  392. 
Van  Werden  v.  Equitable  Life  Assur.  Soc,  251,  252,  294. 
Van  Zandt  v.  Mutual  Ben.  Life  Ins.  Co.,  395. 
Vergerout  v.  German  Ins.  Co.,  599. 
Vermont  Loan  &  Trust  Co.  v.  Hoffman,  30. 
Vette  V.  Clinton  Fire  Ins.  Co.,  660. 
Vezina  v.  Canada  F.  &  M.  Ins.  Co.,  222. 
Vicksburg  &  M.  R.  Co.  v.  Putnam,  775. 
Viele  V.  Germania  Ins.  Co.,  182. 
Vilas  V.  New  York  Cent.  Ins.  Co.,  Ill,  327. 
Virginia  F.  &  M.  Ins.  Co.  v.  Buck,  334. 

V.  Goode,  579,  588. 

V.  Morgan,  333. 

V.  Wells,  423,  425. 
Virginia  Home  Ins.  Co.  v.  Gray,  653. 
Vivar  v.  Supreme  Lodge,  K.  of  P..  283,  326,  680. 
Voigt  V.  Kersten,  691. 

Von  Bories  v.  United  Life  F.  &  M.  Ins.  Co..  239. 
Von  Genetchtin  v.  Citizens'  Ins.  Co.,  565. 
Voorheis  v.  People's  Mut.  Ben.  Soc,  137,  140,  428. 


878  TABLE    OF    CASES. 

References  are  to  pages. 

Vore  V.  Hawkeye  Ins.  Co.,  428,  761. 
Vose  V.  Eagle  L.  &  H.  Ins.  Co.,  342, 
Voss  V.  Connecticut  Mut.  Life  Ins.  Co.,  131. 
V.  Eagle  L.  &  H.  Ins.  Co.,  322. 

Wadhams  v.  Western  Assur.  Co.,  244,  562,  590. 

Wager  v.  Providence  Ins.  Co.,  703. 

Wainer  v.  Milford  Mut.  Fire  Ins.  Co.,  53,  76,  88,  98,  275,  346,  667,  669. 

Wakefield  v.  Orient  Ins.  Co.,  239. 

Waldeck  v.  Springfield  P.  &  M.  Ins.  Co.,  536. 

Waldman  v.  North  British  &  Mercantile  Ins.  Co.,  254,  255. 

Waldock  V.  Springfield  F.  &  M.  Ins.  Co.,  528. 

Wales  V.  New  York  Bowery  Fire  Ins.  Co.,  97,  99,  304,  348. 

Walker  v.  Continental  Ins.  Co.,  480. 

V.  Farmers'  Ins.  Co.,  60,  80. 

V.  German  Ins.  Co.,  602,  659. 

V.  Metropolitan  Ins.  Co.,  44,  48,  291,  490,  492. 

V.  Protection  Ins.  Co.,  101. 
Wall  V.  East  River  Mut.  Ins.  Co.,  335. 

V.  Home  Ins.  Co.,  259,  305. 

V.  Howard  Ins.  Co.,  363,  535. 

V.  Royal  Soc.  of  Goodfellows,  340. 
Wallace  v.  Insurance  Co.,  437,  628,  665. 
Waller  v.  Northern  Assur.  Co.,  309. 
Wallingford  v.  Home  Mut.  F.  &  M.  Ins.  Co.,  84. 
Walls  v.  Bailey,  117. 
Wally's  Heirs  v.  Kennedy,  782. 
Walradt  v.  Phoenix  Ins.  Co.,  404. 
Walsh  V.  Hartford  Fire  Ins.  Co.,  156,  161.  211,  240,  243. 

V.  Hill,  130. 

v.  Mutual  Life  Ins.  Co.,  681. 

v.  Philadelphia  Fire  Ass'n,  276. 

V.  Washington  Marine  Ins.  Co.,  491,  493,  498. 
Walter  v.  Sun  Fire  Office,  331. 

Walter  A.  Wood  M.  &  R.  Machine  Co.  v.  Caldwell,  30. 
Walther  v.  Mutual  Life  Ins.  Co.,  775. 
Ward  V.  Metropolitan  Life  Ins.  Co.,  211,  230. 

V.  National  Fire  Ins.  Co.,  499,  542. 

V.  Wood,  764. 
Ware  v.  Allen,  96. 

AVaring  v.  Indemnity  Fire  Ins.  Co.,  277,  365. 
Warner  v.  Peoria  M.  &  F.  Ins.  Co.,  193,  232. 
Warnock  v.  Davis,  275,  284,  287,  687,  765. 
Warren  v.  Davenport  Fire  Ins.  Co.,  278. 


TABLE    OF    CASES.  879 

References  are  to  pages. 

Warren  v.  Springfield  F.  &  M.  Ins.  Co.,  281,  518. 
Wasey  v.  Travelers'  Ins.  Co.,  775,  777. 
Wash  V.  Fire  Ass'n  of  Philadelphia,  537. 
Washburn  v.  Great  Western  Ins.  Co.,  148. 

V.  Miami  Valley  Ins.  Co.,  369. 
Washburn-Halligan  Coffee  Co.  v.  Merchants'  Brick  Mut.  Fire  Ins.  Co., 

409,  556. 
Washington  Fire  Ins.  Co.  v.  Davison,  407. 
Washington  F.  &  M.  Ins.  Co.  v.  Chesebro,  268, 
Washington  Life  Ins.  Co.  v.  Menefee's  Ex'r,  250. 
Washington  Mills  Emery  Mfg.  Co.  v.  Weymouth  &  B.  Mut.  Fire  Ins. 

Co.,  347,  434. 
Waterbury  v.  Dakota  F.  &  M.  Ins.  Co.,  336. 
Waters  v.  Merchants"  Louisville  Ins.  Co.,  358,  370,  376. 
Waters-Pierce  Oil  Co.  v.  Texas,  23,  35. 
Watertown  Fire  Ins.  Co.  v.  Grehan,  533. 

v.  Grover  &  B.  Sewing  Machine  Co.,  493,  518,  519,  520,  523. 

V.  Rust,  28. 
Watson  v.  Centennial  Mut.  Life  Ass'n,  287,  681. 

V.  Swann,  68. 
Watts  V.  Phoenix  Mut.  Life  Ins.  Co.,  443. 
Waugh  V.  Beck,  274. 

Way  V.  Abbington  Mut.  Fire  Ins.  Co.,  357,  358. 
Wayman  v.  Douthard,  140. 
Waynesboro  Mut.  Fire  Ins.  Co.  v.  Creaton,  434. 
Webb  V.  Protection  Ins.  Co.,  437. 

V.  Protection  &  A.  Ins.  Co.,  374. 
Weber  v.  Germania  Fire  Ins.  Co.,  216,  551. 

V.  Paxton,  692. 
Webster  v.  Buffalo  Ins.  Co.,  44. 

V.  Phoenix  Ins.  Co.,  714. 
Weed  V.  Hamburg-Bremen  Fire  Ins.  Co.,  488,  556,  582. 

V.  London  &  L.  Fire  Ins.  Co.,  67,  262. 

V.  Mutual  Ben.  Life  Ins.  Co.,  778. 
Weidert  v.  State  Ins.  Co.,  155,  181,  236,  240,  316,  450,  458,  460,  548, 

560,  590,  708,  709. 
Weil  V.  New  York  Life  Ins.  Co.,  321,  342. 
Weisenberger  v.  Harmony  F.  &  M.  Ins.  Co.,  359. 
Weiss  v.  American  Fire  Ins.  Co.,  457,  578. 
Welch  v.  Union  Cent.  Life  Ins.  Co.,  775. 

Wellcome  v.  Peoples'  Equitable  Mut.  Fire  Ins.  Co.,  457,  492,  494,  500. 
Wells  V.  New  England  Mut.  Life  Ins.  Co.,  355,  389. 
Wells,  Fargo  &  Co.  v.  Pacific  Ins.  Co.,  134. 


880  TABLE    OF    CASES. 

References  are  to  pages. 

Welsh  V.  Cutler,  309. 

V.  Des  Moines  Ins.  Co.,  491,  501,  502,  510,  553,  592. 

V.  London  Assur.  Corp.,  525,  549,  573,  574,  591,  676. 
West  V.  British  America  Assur.  Co.,  528,  535. 

V.  Citizens'  Ins.  Co.,  132,  403. 

V.  Norwich  Union  F.  Ins.  Co.,  1^2. 
West  Branch  Ins.  Co.  v.  Helfenstein,  565,  688. 
West  Branch  Lumberman's  Exchange  v.  American  Cent.  Ins.  Co.,  136, 

497. 
Westchester  Fire  Ins.  Co.  v.  Coverdale,  119. 

V.  Dodge,  404,  438,  688. 

V.  Earle,  52,  150,  162,  239,  558,  561. 

V.  Foster,  276. 

V.  Jennings,  520. 

V.  Wagner,  149. 

V.  Weaver,  400. 
Western  Assur.  Co.  v.  Altheimer,  330. 

V.  Decker,  646,  647. 

V.  Hall,  647,  667,  670. 

V.  MacAlpin,  47,  768. 

V.  McCarty,  263,  551. 

V.  Ray,  364. 

V.  Redding,  321,  332. 

V.  Stoddard,  436,  676. 
Western  Commercial  Travelers'  Ass'n  v.  Smith,  381,  486,  496,  498. 
Western  Home  Ins.  Co.  v.  Richardson,  439,  579,  594 
Western  Horse  &  Cattle  Co.  v.  O'Neill,  376. 
Western  Horse  &  Cattle  Ins.  Co.  v.  Scheidle.  301. 
Westfield  Cigar  Co.  v.  Insurance  Co.  of  North  America,  669. 
Westlake  v.  St.  Lawrence  County  Mut.  Ins.  Co.,  604. 
Westmoreland  v.  Preferred  Ace.  Ins.  Co.,  384,  387. 
West  Rockingham  Mut.  Fire  Ins.  Co.  v.  Sheets,  515. 
Wheaton  v.  North  British  &  M.  Ins.  Co.,  591. 
Wheeler  v.  Connecticut  Mut.  Life  Ins.  Co.,  20,  310. 

V.  Factors'  &  Traders'  Ins.  Co.,  10,  677. 

V.  Odd  Fellows'  Mut.  Aid  &  Ace.  Ass'n,  114,  151. 

V.  Supreme  Sitting,  O.  of  I.  H.,  122. 

V.  Traders'  Ins.  Co.,  357,  358.  '  ' 

V.  Watertown  Fire  Ins.  Co.,  653. 
Whipple  V.  North  British  &  M.  Fire  Ins.  Co.,  444. 
Whitcomb  v.  Phoenix  Mut.  Life  Ins.  Co.,  138. 
White  V.  Madison,  279. 

V.  Mutual  Fire  Assur.  Co.,  362. 


TABLE   OF   CASES.  881 

References  are  to  pages. 

White  V.  Phoenix  Ins.  Co.,  419. 

V.  Provident  Sav.  Life  Assur.  Soc,  323,  339,  350,  385,  713. 

V.  Republic  Fire  Ins.  Co.,  358,  372. 

V.  Robbins,  686. 

V.  Royal  Ins.  Co.,  529. 

V.  Smith,  692. 

V.  Germania  Fire  Ins.  Co.,  206,  219,  239,  242. 
Whitehurst  v.  Fayetteville  Mut.  Ins.  Co.,  373,  374. 
Whiteside  v.  Supreme  Conclave,  I.  0.  H.,  190-192,  206. 
Whiting  V.  Burkhart,  430,  765. 

V.  Massachusetts  Mut.  Life  Ins.  Co.,  297,  305,  310. 
Whitlatch  v.  Fidelity  &  Casualty  Co.,  382,  767. 
Whitley  v.  Piedmont  &  A.  Life  Ins.  Co.,  296. 
Whitmarsh  v.  Conway  Fire  Ins.  Co.,  130. 
Whitney  v.  Black  River  Ins.  Co.,  411,  420, 

V.  Burkhardt,  678. 

V.  National  Masonic  Ace.  Ass'n,  202,  221,  351,  613,  620. 
Whittaker  v.  Farmers'  Union  Ins.  Co.,  101. 
Whittle  V.  Farmville  Ins.  Co.,  69. 
Whitwell  v.  Putnam  Fire  Ins.  Co.,  364. 
Whitworth  v.  Ballard,  258. 
Wholley  v.  Western  Assur.  Co.,  664. 

Wiberg  v.  Minnesota  Scandinavian  Relief  Ass'n,  44,  121,  347,  732,  744. 
Wiberly  v.  Matthews,  640. 

Wicking  v.  Citizens'  Mut.  Fire  Ins.  Co.,  573,  597,  603,  628,  631. 
Wiebler  v.  Milwaukee  Mechanics'  Mut.  Ins.  Co.,  53. 
Wiggins  V.  Knights  of  Pythias,  144. 
Wightman  v.  Western  M.  &  F.  Ins.  Co.,  477,  488,  543. 
Wilber  v.  Williamsburgh  City  Fire  Ins.  Co.,  196,  199,  206,  207,  211. 
Wilburn  v.  Wilburn,  695. 
Wilcox  v.  Allen,  678. 

Wildberger  v.  Hartford  Fire  Ins.  Co..  165. 
Wilder  v.  Chicago  &  W.  M.  Ry.  Co.,  782. 
Wilhelmi  v.  Des  Moines  Ins.  Co.,  428. 
Wilkins  v.  State  Ins.  Co.,  66,  86,  114,  133,  158,  202,  220,  224,  236,  237, 

245,  292,  293,  299,  431. 
Wilkinson  v.  Connecticut  Mut.  Life  Ins.  Co.,  325. 
Willcuts  V.  Northwestern  Mut.  Life  Ins.  Co.,  252. 
Willey  V.  Fidelity  &  Casualty  Co.,  312. 
Williams  v.  Continental  Ins.  Co.,  37,  68. 

v.  Corson,  683. 

V.  Hartford  Ins.  Co.,  446,  619. 

V.  LiUey,  686. 

KERR,  INS.—  56 


882  TABLE    OF    CASES. 

References  are  to  pages. 

Williams  v.  New  England  Mut.  Fire  Ins.  Co.,  321,  376,  414. 

V.  Niagara  Fire  Ins.  Co.,  508,  714. 

V.  Paschall,  640. 

V.  Phoenix  Fire  Ins.  Co.,  535. 

V.  Queen's  Ins.  Co.,  500,  502,  503,  506,  507,  511,  514,  577,  591,  600, 
603. 

V.  Roger  Williams  Ins.  Co.,  278. 

V.  Smith,  68,  274. 

V.  Washington  Cife  Ins.  Co.,  297. 
Williamson  v.  Liverpool,  L.  &  G.  Ins.  Co.,  782. 

V.  Michigan  F.  &  M.  Ins.  Co.,  429. 

V.  Orient  Ins.  Co.,  410. 
Willis  V.  Germania  &  Hanover  Fire  Ins.  Co.,  376,  523. 
Willoughby  v.  St.  Paul  German  Ins.  Co.,  428,  658,  660,  717. 
Wilmaser  v.  Continental  Life  Ins.  Co.,  690, 
Wilson  V.  Aetna  Ins.  Co.,  423. 

V.  Commercial  Union  Assur.  Co.,  241,  586,  589. 

V.  Conway  Fire  Ins.  Co.,  148. 

V.  Hill.  8. 

T.  Minnesota  Farmers'  Mut.  Fire  Ins.  Ass'n,  215. 

V.  New  Hampshire  Fire  Ins.  Co.,  82. 

V.  Northwestern  Mut.  Ace.  Ass'n,  397,  516,  518,  582. 
Winans  v.  Allemania  Fire  Ins.  Co.,  169. 
Winchell  v.  Iowa  State  Ins.  Co.,  16,  80,  81,  158,  203,  251. 
Wingert  v.  Zeigler,  49. 

Winne  v.  Niagara  Fire  Ins.  Co.,  78,  156,  160,  268. 
Winnesheik  Ins.  Co.  v.  Holzgrafe,  80,  163,  238. 

v.  Schueller,  600. 
Witherell  v.  Marine  Ins.  Co.,  106,  180. 
Wittenberg  Veneer  &  Panel  Co.,  In  re,  689l 
Wolcott  V.  Sprague,  517. 

Wolf  V.  Michigan  Masonic  Mut.  Ben.  Ass'n,  306. 
Wolff  V.  Connecticut  Mut.  Life  Ins.  Co.,  390,  778. 

V.  Liverpool  &  L.  &  G.  Ins.  Co.,  645. 
Wolters  V.  Western  Assur.  Co.,  376. 
Wood  V.  Dwarris,  120. 

V.  Firemen's  Fire  Ins.  Co.,  172,  173.  196. 

V.  Grose,  13. 

V.  Hartford  Fire  Ins.  Co.,  335. 

V.  Massachusetts  Mut.  Ace.  Ass'n,  103,  444. 

V.  Northwestern  Ins.  Co.,  704. 
Woodbury  Savings  Bank  &  Building  Ass'n  v.  Charter  Oak  F.  &  M, 
Ins.  Co.,  169,  176. 


TABLE   OF    CASES,  8S3 

References  are  to  ps^es. 

Wooddy  V.  Old  Dominion  Ins.  Co.,  456,  458,  469,  487. 

Woodfin  V.  Ashville  Mut.  Ins.  Co.,  539. 

"Woodruff  V.  Tilman,  691. 

Worachek  v.  New  Denmark  Mut.  Home  Fire  Ins.  Co.,  72,  533-535,  783. 

World  Mut.  Life  Ins.  Co.  v.  Schultz,  341. 

Worley  v.  Northwestern  Masonic  Aid  Ass'n,  684. 

"Worthington  v.  Bearse,  275. 

Wright,  In  re,  436. 

V.  Hartford  Fire  Ins.  Co.,  509.  ' 

V.  London  Fire  Ins.  Ass'n,  263,  552,  567,  596,  783. 

V.  Mutual  Ben.  Life  Ass'n,  118. 

V.  Susquehanna  Mut.  Fire  Ins.  Co.,  628. 
Wuesthoff  V.  Germania  Life  Ins.  Co.,  517,  518. 
Wunderlich  v.  Chicago  &  N.  W.  Ry.  Co.,  701. 

V.  Palatine  Fire  Ins.  Co.,  3G0,  535,  648,  676. 
Wyman  v.  People's  Equity  Ins.  Co.,  493. 

V.  Phoenix  Mut.  Life  Ins.  Co.,  109,  245. 
Wynkoop  v.  Niagara  Fire  Ins.  Co.,  439,  661,  665. 
Wynne  v.  Liverpool  &  L.  &  G.  Ins.  Co.,  346,  417. 
Wynne's  Case,  752. 

Yancey  v.  Aetna  Life  Ins.  Co.,  391. 
Yendel  v.  Western  Assur.  Co.,  594,  622,  642,  645,  671. 
Yonge  V.  Equitable  Life  Assur.  Soc,  85,  88,  90,  93,  94. 
Yonkers  &  N.  Y.  Fire  Ins.  Co,  v.  Hoffman  Fire  Ins.  Co.,  735,  740. 
Yore  V.  Booth,  353,  695. 
York  &  C.  R.  Co.  v.  Myers,  650. 
Yost  V.  McKee,  669. 

Young  V.  Grand  Council,  A.O.  of  A.,  191,  453,  504,  509,  520,  552,  607, 
633,  635. 

V.  Hartford  Fire  Ins.  Co.,  241,  250. 

V.  Travelers'  Ins.  Co.,  386,  524,  530. 

V.  Union  Ins.  Co.,  278. 
Youth's  Temple  of  Honor,  In  re,  757. 

Zaleski  v.  Home  Ins.  Co.,  609,  617,  625,  626,  628,  665,  667. 

V.  Iowa  State  Ins.  Co.,  438,  439,  661. 
Zallee  v.  Laclede  Mut.  F.  &  M.  Ins.  Co.,  654. 
Zell  V.  Herman  Farmers'  Mut.  Ins.  Co.,  237,  245. 
Zielke  v.  London  Assur.  Corp.,  600. 
Zimeriski  v.  Ohio  Farmers'  Ins.  Co.,  627,  665. 
Zimmerman  v.  Home  Ins.  Co.,  562. 
Zimmermann  v.  Dwelling-House  Ins.  Co.,  165. 


INDEX. 

Beferences  are  to  pages. 

A. 

ACCEPTANCE, 

what  constitutes  acceptance  of  application,  80,  82. 
what  constitutes  acceptance  of  policy,  82. 

ACCIDENT, 

meaning  in  policy  of  accident  insurance,  380. 

presumption  as  to  cause  of  injury  to  insured,  777,  781, 
ACCIDENT    INSURANCE, 

definition  of  contract,  5. 

proximate  cause  of  loss,  377. 

ACT    OF    GOD, 

excuse  for  non-payment  of  premium,  310. 
ACTION, 

practice  and  procedure  in  actions  of  policies,  759. 

persons  who  may  sue  on  contract  of  reinsurance,  721. 

power  of  general  agent  to  institute  civil  or  criminal  proceedings, 
186. 

right  of  action  against  mutual  company  to  compel  distribution 
of  surplus,  443. 

special  limitations  in  policy  as  to  time  of  bringing  suit,  423. 

ADDITIONAL   INSURANCE, 

breach  of  warranty  as  to  other  insurance,  338. 

forfeiture  or  avoidance  of  policy  for  other  insurance,  407. 

power  of  general  agent  to  waive  condition  against  additional  in- 
surance, 185. 

power  of  solicitor  to  consent  to  additional  insurance,  203. 

stipulation  limiting  amount  of  liability  in  case  of  other  insur- 
ance, 440. 

waiver  of  right  to  forfeit  policy  on  taking  out  of  other  insur- 
ance, 709. 
ADJUSTMENT    OF    LOSS, 

conclusiveness  of  adjustment,  444. 

conclusiveness  of  award  in  arbitration  proceedings,  648. 


886  INDEX. 

References  are  to  pages. 

ADJUSTMENT  OF  LOSS  (con.), 

effect  of  demanding  or  participating  in  award,  658. 

effect  of  failure  of  arbitrators  to  agree,  642. 

effect  of  stipulations  for  submission  to  arbitration,  613. 

election  to  rebuild  as  waiver  of  right  to  demand  arbitration,  439. 

negotiations  for  settlement  as  waiver  of  proof  of  loss,  595. 

proceedings  for  submission  of  claim  to  arbitration,  629. 

power  of  adjusters  to  settle  and  adjust  losses,  260. 

power  of  agent  to  adjust  and  settle  losses,  163,  184. 

proceedings  of  arbitrators,  639. 

right  of  unauthorized  foreign   company  to  adjust  loss  within 

state,  37. 
selection  of  arbitrators  and  umpire,  632. 
setting  aside  award  in  arbitration  proceedings,  652. 
validity  of  stipulations  for  arbitration,  264,  608. 
waiver  of  breach  of  conditions  by  proceedings  for  adjustment  of 

loss,  715. 
waiver  of  proofs  of  loss  by  proceedings  for  adjustment,  550. 
waiver  of  right  to  arbitration,  661. 

ADJUSTERS, 

power  of  insurance  adjuster  to  waive  proof  of  loss,  567. 

ADMISSIONS, 

conclusiveness  of  recitals  in  proofs  of  loss.  526. 

of  oflBcer  of  insurance  company  as  binding  on  company,  188. 

AGENTS, 

acts  of  agents  before  issuance  of  policy,  as  binding  on  company, 

212. 
admissions  of  agent  to  prove  agency,  178. 
appointment  of  agent  on  whom  summons  may  be  served,  760. 
brokers  and  solicitors  as  agents  for  both  parties,  195. 
classification  of  agents  of  insurance  companies,  180. 
collusive  waiver  of  forfeiture  by  agent  of  insurer,  713. 
delay  caused  by  agent,  as  affecting  special  limitation  in  policy, 

427. 
effect  of  delivery  of  policy  to  insurer's  agent,  92. 
insertion  of  false  answer  in  application  by  agent  barring  right 

to  avoid  policy,  220. 
knowledge  of  agent  binding  on  insurer,  214. 
liability  of  insurance  agent  to  his  principal,  267. 
liability  of  agent  of  insured  for  failure  to  procure  insurance,  270. 
liability  of  agent  of  insurer  for  failure  to  procure  policy,  51. 
mistakes  of  agent  in  making  out  application.  111,  213. 


INDEX.  8b7 

References  are  to  pages. 

AGENTS  (con.), 

officers  of  insurance  companies  as  agents,  187. 

possession  of  blank  policies  as  evidence  of  agency  for  insurer 
178. 

power  to  agree  to  renewal  of  policy,  51. 

power  to  bind  company  by  renewing  policy,  106. 

power  to  extend  credit  for  premium,  294. 

power  to  issue  policy  after  loss,  166= 

power  to  make  contracts  of  insurance,  79. 

power  to  make  contract  of  reinsurance,  726. 

power  to  make  oral  contract  of  insurance,  50. 

power  to  revive  forfeited  policy,  108. 

power  to  waive  conditions  in  policy,  213. 

power  to   waive  condition   requiring  countersigning  of  policy, 
86. 

power  to  waive  notice  and  proof  of  loss,  545. 

power  to  waive  right  of  company  to  forfeit  or  avoid  policy,  710. 

power  to  waive  right  to  arbitration,  661. 

power  of  local  agent  to  receive  notice  and  proof  of  loss,  522. 

powers  of  agents  of  insurance  companies  in  general,  152. 

powers  of  special  or  local  agents,  192. 

ratification  of  unauthorized  acts,  264. 

right  of  agent  of  insured  to  furnish  notice  and  proof  of  loss,  517. 

right  of  state  to  prescribe  qualifications  of  insurance  agents,  25. 

right  of  insurance  agent  to  insure  himself,  17. 

right  of  insurance  agent  to  insure  his  own  property,  165. 

right  of  unauthorized  foreign  company  to  appoint  agents  within 
state,  37. 

right  to  act  as  agent  for  both  parties  to  insurance  contract,  17, 
61,  153,  165. 

right  to  avoid  policy  for  mistakes  of  insurer's  agent,  351. 

stipulations  in  application  making  solicitor  the  agent  of  appli- 
cant, 209. 

stipulations  in  policy  regulating  agency,  204. 

subordinate  lodge  of  benefit  association  as  agent  of  grand  lodge, 
190. 

sufficiency  of  notice  of  loss  given  by  agent  of  insurer,  515. 

waiver  of  conditions  in  policy  by  officers  of  company,  188. 

AGE  OF  INSURED, 

effect  of  misrepresentations  as  to  age  of  insured,  344. 
forfeiture  of  life  policy  for  breach  of  warranty  as  to  age  of  in- 
sured, 336. 


888  INDEX. 

References  are  to  pages. 

AGREEMENT  TO  INSURE, 

effect  of  loss  before  delivery  of  policy,  97. 

executory  contract  to  insure,  58. 

measure  of  damages  for  breach  of  contract  to  insure,  441. 

necessity  of  notice  and  proof  of  loss  under  agreement  to  insure. 

456. 
validity  of  parol  agreement  to  insure,  45. 
what  constitutes  performance  of  parol  contract  to  issue  policy, 

114. 

ALEATORY  CONTRACT, 

nature  of  insurance  contract,  11. 

ALIENS, 

right  of  alien  to  take  insurance,  20. 
ALTERATIONS  AND  REPAIRS, 

forfeiture  of  policy  for  alterations  or  repairs  on  Insured  prop- 
erty, 405. 
AMALGAIVIATION, 

of  insurance  companies,  741. 
AMBIGUITIES, 

construction  of  ambiguous  language  in  policy,  134. 

AMENDMENT, 

effect  of  amendments  to  charter  and  by-laws  of  mutual  benefit 

association,  121. 
of  complaint  in  action  on  policy,  769. 
time  within  which  amended  proof  of  loss  must  be  served,  580. 

AMOUNT  OF  INDEMNITY, 

necessity  of  recitals  in  policy,  15. 
ANNUITY, 

contract  to  pay  annuities  or  monthly  instalments  as  insurance 
contract,  13. 
ANSWER, 

requisites  and  suflBciency  of  answer  in  action  on  policy,  769. 
APPLICATION, 

construction  of  application  as  part  of  contract,  110,  117. 

construction  of  application  as  part  of  parol  contract  of  insur- 
ance, 50. 

effect  of  concealment  of  facts,  111. 

effect  of  making  application  for  insurance,  78. 

necessity  of  application  for  insurance,  78. 

necessity  of  application  for  membership  in  mutual  company,  81. 


INDEX.  889 

References  are  to  pages. 

APPLICATION   (con.), 

necessity  of  application  for  parol  contract  to  insure,  46. 

power  of  general  agent  to  waive  written  application,  185.  , 

right  to  avoid  policy  for  mistake  of  agent  in  filling  in  applica- 
tion, 351. 

stipulations  in  application  making  solicitor  the  agent  of  appli- 
cant, 209. 

warranties  and  representations  in  application,  319. 

APPOINTMENT, 

of  agents  of  insurance  companies,  179. 

APPORTIONMENT  OF     LOSS, 

stipulation  for  apportionment  of  loss  among  insurers,  440. 

APPRAISEMENT, 

validity  of  provisions  requiring  appraisal  and  arbitration,  264. 

ARBITRATION, 

conclusiveness  of  award,  648. 

demand  for  arbitration  as  waiver  of  proof  of  loss,  601. 

demand  for  arbitration  as  waiver  of  right  to  avoid  or  forfeit 

policy,  715. 
effect  of  demanding  or  participating  in  award,  G58. 
effect  of  failure  of  arbitrators  to  agree,  642. 
effect  of  stipulations  for  submission  to  arbitration,  613. 
necessity  of  pleading  submission  to  arbitration,  767. 
proceedings  for  submission  of  claim  to  arbitration,  629. 
proceedings  of  arbitrators,  639. 
selection  of  ai'bitrators  and  umpire,  632. 
setting  aside  award,  652. 

validity  of  stipulations  for  arbitration,  264,  608,  759. 
waiver  of  right  to  arbitration,  G61. 

ASSIGNMENT  FOR  BENEFIT  OF  CREDITORS, 

insurable  interest  of  assignee,  278. 

right  of  assignee  to  proceeds  of  insurance  policies,  697. 

termination  of  policy  by  assignment,  104. 

ASSIGNMENT   OF   INSURED   PROPERTY, 
effect  on  insurance  policy,  8. 

ASSIGNMENT  OF  POLICY, 

assignability  of  policy  of  fire  insurance,  685. 
assignability  of  policy  of  life  insurance,  687. 
consent  to  assignment  as  waiver  of  forfeiture,  108. 
insurable  interest  of  assignee  of  policy  of  life  insurance,  285. 


890  INDEX. 

References  are  to  pages. 

ASSIGNMENT  OF  POLICY  (con.), 

law  governing  Fight  to  assign  policy,  138. 

measure  of  damages  for  breach  of  agreement  to  assign  policy^ 

443. 
power  of  agent  to  consent  to  assignment,  160,  231. 
power  of  subagent  to  consent  to  assignment  of  policy,  255. 
right  to  assign,  9. 

right  of  assignee  to  maintain  action  on  policy,  765. 
right  of  assignee  to  furnish  notice  and  proof  of  loss,  520. 
sufficiency  and  validity  of  assignment,  687. 

ATTACHMENT, 

insurable  interest  of  officer  in  attached  property,  279. 
right  of  attaching  creditor  to  furnish  proof  of  loss,  520. 

ATTENDING  PHYSICIAN, 

conclusiveness  of  statements  of  attending  physician  in  proofs  of 

loss,  530. 
misrepresentations  in  application  as  to  attending  physician,  339. 
necessity  and  sufficiency  of  physician's  certificate  to  proof  of 

death,  510. 

ATTORNEYS'  FEES, 

validity  of  statute  providing  for  attorneys'  fees  in  actions  ott 
policies,  781. 

AVOIDANCE  OF  POLICY, 

duty  to  return  premium  paid,  308. 

effect  of  breach  of  condition  on  rights  of  mortgagee,  429. 

effect  of  misstatements  in  application  inserted  by  agent  of  com- 
pany, 213,  220. 

for  concealment  of  facts  in  application.  111. 

for  incumbrance  on  insured  property,  409. 

for  misrepresentations  and  breach  of  warranties,  319. 

for  other  insurance,  407. 

insertion  of  false  answer  in  application  by  agent  barring  right 
to  forfeit  policy,  ,213,  220. 

knowledge  of  agent  preventing  company  from  avoiding  policy.. 
214. 

knowledge  of  officer  of  company  estopping  it  to  avoid  policy,  18?.^ 

necessity  and  sufficiency  of  pleading  breach  of  conditions,  769. 

right  to  avoid  policy  for  mistakes  of  insurer's  agent,  351. 

validity  of  stipulations  avoiding  policy  for  defect  in  title  or  in- 
terest,. 398. 


INDEX,  891 

References  are  tx)  pages. 

B. 

BAILMENT, 

insurable  interest  in  property  held  by  bailee,  276. 

BINDING  SLIP, 
definition,  62. 
requisites  and  sufficiency,  62. 

BLANKET  POLICY, 
definition,  70. 

BOOKS  OF  ACCOUNT, 

duty  of  insured  to  keep  and  furnish  books  of  account,  541. 

BROKERS, 

powers  of  insurance  brokers,  195. 

power  of  broker  after  delivery  of  policy,  233. 

BURDEN  OP  PROOF, 

as  to  making  and  payment  of  assessments,  7S0. 

as  to  payment  of  premium,  779. 

of  authority  of  agent  to  bind  company,  163. 

of  authority  of  subagent  of  insurance  agent,  2o7. 

of  breach  of  warranty  avoiding  policy,  353. 

to  enforce  performance  of  oral  agreement  to  issue  policy,  56. 

to  establish  parol  contract  of  insurance,  52. 

to  excuse  failure  to  furnish  notice  and  proof  of  loss,  470. 

to  show  forfeiture  of  insurance  policy,  432. 

BURGLARY, 

contract  to  make  good  loss  by  burglary  an  insurance  contract,  13. 

BY-LAWS, 

effect  of  amendment  of  by-laws  of  mutual  benefit  association,  121. 
of  mutual  benefit  association  as  part  of  contract,  1"20. 

c. 

CANCELLATION  OP  POLICY, 

liability  of  agent  for  failure  to  cancel  policy,  268. 

liability  of  benefit  association  for  unlawful  cancellation  of  cer- 
tificate, 441. 

necessity  to  return  unearned  premium,  222. 

power  of  agent  to  cancel  policy,  231. 

power  of  agent  to  revive  canceled  policy,  161. 
CAPITAL  STOCK, 

right  of  state  to  prescribe  amount  of  capital  required  of  foreign 

companies,  24. 


892  INDEX. 

References  are  to  pagea. 

CARRIERS, 

common  carriers  as  insurers,  2. 

insurable  interest  of  carrier  in  goods  being  transported,  277. 
railroad  company  as  insurer  of  cars  received  from  other  com- 
panies, 2. 
subrogation  of  insurer  to  claim  of  insured  against  carrier,  702. 

CERTIFICATE  OF  MEMBERSHIP, 

construction  of  contract  with  members  of  mutual  benefit  associa- 
tions, 143. 
necessity  of  certificate  in  mutual  company,  81. 

CERTIFICATES, 

necessity  and  suflScency  of  certificates  to  proof  of  loss,  502. 

CHARTER, 

effect  of  amendments  of  charter  of  mutual  benefit  association, 
121. 

effect  on  right  to  make  parol  contract  of  insurance,  47. 

of  mutual  benefit  association  as  part  of  contract,  120. 
CHANGE   OF    BENEFICIARY, 

right  to  change  beneficiary  in  life  insurance  policy,  679. 
CHANGE  OF  RESIDENCE, 

forfeiture  of  life  policy  by  change  of  residence,  421. 

CHANGE  OF  TITLE  AND  POSSESSION, 

forfeiture  of  policy  for  change  of  title  of  insured  property,  401. 

CLASSIFICATION, 

divisions  of  insurance  contracts,  4. 
of  agents  of  insurance  companies,  180. 
of  insurance,  2. 

CLERKS, 

powers  of  clerks  and  subagents  of  insurance  agents,  253. 
termination  of  powers  of  clerks  of  insurance  agents,  260. 

COLLUSION, 

between  agent  and  insured  avoiding  policy,  225. 

COMMISSIONER  OF  INSURANCE, 

mandamus  to  compel  issuance  of  license,  25. 

ministerial  capacity,  25. 

right  to  revoke  license,  25. 
COMPROMISE, 

liability  of  company  on  note  given  in  compromise  of  invalid 
risk,  42. 

negotiations  for  compromise  as  waiver  of  proofs  of  loss,  595. 


INDEX. 


895 


References  are  to  pages. 

CONCEALMENT   OP   FACTS, 

avoidance  of  policy  for  concealment  of  facts,  346. 

CONDITIONAL  CONTRACT, 

nature  of  insurance  contract,  10. 
CONDITIONAL  DELIVERY, 

of  insurance  policy,  95. 
CONFLICT  OF  LAWS, 

laws  governing  contracts  of  insurance,  759. 

law  governing  in  construction  of  policy,  136. 

CONNECTING  CARRIERS, 

railroad  company  as  insurer  of  cars  received  from  other  com- 
panies, 2. 

CONSIDERATION, 

necessity  of  consideration  for  insurance  contract,  15. 

CONSOLIDATION, 

of  insurance  companies,  741. 
CONSTITUTIONAL  LAW, 

impairing  obligation  of  contract  of  insurance  policy,  116. 

CONSTRUCTIVE  DELIVERY, 
of  insurance  policy,  92. 

CONTENTS, 

essential  contents  of  insurance  policy,  66. 

CONTRACT, 

constituents  of  contract,  113. 

construction  of  custom  as  part  of  insurance  contract.  117. 
construction  of  laws  and  ordinances  as  part  of  insurance  con- 
tract, 116. 
definitions  of  insurance  contracts,  3. 
divisions  of  insurance  contracts,  4. 
essentials  of  insurance  contract,  15,  66. 
form  of  insurance  contract,  45.' 
interpretation  of  contract  of  insurance,  129. 
law  of  place  of  contract  as  part  of  policy,  115. 
nature  of  insurance  contract,  10. 
subject-matter  of  insurance  contract,  353. 
ultra  vires  contract  of  insurance,  38. 
warranties  as  part  of  contract,  319. 
what  constitutes  insurance  contract,  11. 

CONTRIBUTION, 

stipulation  for  contribution  among  insurers,  440. 


89J:  INDEX. 

References  are  to  pages. 
CORPORATIONS, 

insurable  interest  of  stockholder  in  corporate  property,  278. 

right  of  corporation  to  be  insured,  18. 
CROPS, 

right  of  insurance  company  to  insure  standing  crops,  41. 

CUSTOM  AND  USAGE, 

construction  of  custom  as  part  of  insurance  policy,  117. 
construction  of  policy  with  reference  to  custom  and  usage,  140. 

D. 

DAMAGE  BY  WATER, 

liability  of  insurer  for  damage  by  water,  373. 

DAMAGES, 

for  failure  to  execute  agreement  to  insure,  58. 

measure    of    damages    for    breach    of    agreement    to    assign 
policy,  443. 

measure  of  damages  for  breach  of  contract  to  deliver  paid-up 
policy,  443. 

measure  of  damages  for  breach  of  contract  to  insure,  441. 

measure  of  damages  for  unlawful  forfeiture  of  policy,  442. 

measure  of  damages  in  action  on  policy,  432. 
DEATH, 

presumption  as  to  death  of  insured,  776,  780. 
DEATH   AT   THE   HAND    OF   JUSTICE, 

liability  for  death  of  insured  at  the  hand  of  justice,  393. 
DEBTOR  AND  CREDITOR, 

designation  of  creditor  as  beneficiary  in  certificate  of  member- 
ship in  mutual  benefit  association,  689. 

insurable  interest  of  creditor  in  life  of  debtor,  286,  680. 

insurable  interest  of  creditor  in  property  of  debtor,  279. 

right    of    creditor   of   insured   to   furnish    notice    and    proof   of 
loss,  520. 

rights  of  creditor  to  proceeds  of  policy,  691. 
DECLARATIONS, 

of  officer  of  insurance  company  as  binding  on  company,  188. 
DEFINITION, 

of  contract  of  accident  insurance,  5. 

of  contract  of  fire  insurance,  4. 

of  contract  of  life  insurance,  5. 

of  contract  of  marine  insurance,  5, 

of  guaranty  insurance  contract,  6. 

of  insurance  contracts,  3. 


INDEX. 


895 


References  are  to  pages. 

DELEGATION  OF  POWER, 

of  insurance  agent,  256. 
DELIVERY, 

effect  of  loss  before  delivery  of  policy,  97. 

necessity  and  sufficiency  of  delivery  of  policy,  49,  87. 

power  of  brokers  and  solicitors  after  delivery,  233. 

presumption  as  to  delivery  of  policy,  781. 
DEMAND, 

necessity  and  sufficiency  of  demand  for  arbitration,  625. 

necessity  and  sufficiency  of  demand  for  proof  of  loss,  505. 

sufficiency  of  demand  for  examination  of  insured  under  oath,  538. 

DENIAL  OF  LIABILITY, 

as  waiver  of  arbitration,  668. 

as  waiver  of  notice  and  proofs  of  loss,  576,  585. 

DEPOSIT, 

right  of  state  to  require  deposit  of  security  by  foreign  com- 
pany, 24. 
DISEASE, 

what  constitutes  death  from  disease,   within  meaning  of   pol- 
icy, 384. 

DISTRIBUTION  OF  SURPLUS, 

in  mutual  insurance  companies,  443. 

DIVORCE, 

effect  on  insurable  interest  of  wife  in  husband's  life,  680. 
DOING  BUSINESS, 

within  meaning  of  insurance  statutes,  36. 
DURATION  OF  CONTRACT, 

term  of  insurance,  100. 

E. 

ELECTION, 

of  insurer  to  repair  premises  or  pay  loss,  438. 

•  SELECTION  TO  REBUILD, 

effect  of  submission  of  loss  to  arbitration,  660. 

submission  to  arbitration  as  waiver  of  election  to  rebuild,  717. 

EMPLOYER'S  LIABILITY  INSURANCE, 
sufficiency  of  notice  of  loss,  461. 

ENDOWMENT  INSURANCE, 

right  of  mutual  benefit  association  to  give  endowment  insur- 
ance, 42. 


89G  INDEX. 

References  are  to  pages. 

ESTOPPEL, 

insertion  of  false  answer  in  application  by  agent  barring  right 
to  forfeit  policy,  220. 

knowledge  of  agent  estopping  company  from  forfeiting  pol- 
icy, 217. 

knowledge  of  agent  estopping  company  to  avoid  policy,  214. 

of  insurer  to  allege  invalidity  of  policy  for  its  failure  to  comply 
with  statutes.  31. 

of  insurer  to  avoid  or  forfeit  policy,  705. 

of  insurer  to  avoid  policy  for  acts  of  its  agent,  213. 

of  insurer  to  object  to  delay  in  furnishing  proof  of  loss,  570. 

of  insurer  to  deny  agency  of  solicitor,  196. 

of  insurer  to  deny  validity  of  renewal  policy,  106. 

of  insurer  to  plead  limitation  of  action,  760. 

of  insurer  to  plead  special  limitation  in  policy,  427. 

of  insurer  to  refuse  payment  on  ultra  vires  policy,  679. 

of  insurer  to  require  notice  and  proof  of  loss,  545. 

waiver  of  right  to  forfeit  policy  for  non-payment  of  premium,  314. 
EVIDENCE, 

admissibility  of  evidence  as  to  cost  of  restoring  insured  build- 
ing, 445. 

burden  of  proof  of  authority  of  agent  to  bind  company,  163. 

burden  of  proof  of  misrepresentation  avoiding  policy,  353. 

effect  of  erroneous  admission  of  evidence  in  arbitration  pro- 
ceedings. 652. 

expert  evidence  as  to  increase  of  risk,  418. 

in  action  on  policy,  771. 

of  authority  of  agent  of  insurance  company,  175. 

of  authority  of  sub-agent  of  insurance  agent,  257. 

of  existence  of  agency  for  insurance  company,  175. 

parol  evidence  to  explain  policy,  131,  148. 

presumption  of  fidelity  of  agents  of  company,  164. 

proof  of  parol  contract  to  insure,  52. 

proofs  of  loss  as  evidence,  526. 

stipulation  in  policy  waiving  privilege  of  communication  to 
physician,  429. 

EXAMINATION   OF  INSURED, 

duty  of  insured  to  submit  to  examination  under  oath,  538. 
waiver  of  proofs  of  loss  by  requiring  examination  of  Insured 
under  oath,  599. 

EXECUTION, 

insurable  interest  of  officer  in  attached  property,  279. 
of  policy,  85.  , 


IKDEX. 


897 


References  are  to  pages. 

EXECUTORS  AND  ADMINISTRATORS. 

right  to  proceeds  of  policy  on  life  of  decedent,  682. 

EXPERT  EVIDENCE, 

as  to  increase  of  risk,  418. 

in  action  on  insurance  policy,  779. 

EXPLOSION, 

liability  of  insurer  for  loss  caused  by  explosion,  359,  368. 

EXPOSURE, 

warranty  to  keep  clear  space  around  insured  building,  334. 

EXTENT  OF  LOSS, 

effect  of  recitals  in  policy,  432. 

effect  of  recovery  by  insured  from  person  causing  loss,  448. 

extent  of  liability  of  reinsurer,  735. 

for  breach  of  contract  to  insure,  441. 

liability  of  insurers  on  successive  losses,  441, 

what  constitutes  total  loss,  445. 
EXTERNAL,  VIOLENT,  AND  ACCIDENTAL  MEANS, 

what  constitutes  death  from  such  causes,  383. 

P. 

FACTORS, 

insurable  interest  of  factor,  277. 

FALLEN  WALLS, 

liability  of  insurer  for  loss  from  fallen  walls,  371. 

FIDELITY  BONDS, 

guaranty  of  fidelity  of  ofiicers  and  employes  as  insurance  con- 
tract, 13. 
FIREMEN'S  RELIEF  FUND, 

right  of  state  to  compel  foreign  companies  to  contribute,  25. 

FLOATING  POLICY, 

definition,  70. 

FOREIGN  COMPANIES, 

presumption  as  to  compliance  with   statutes   by  foreign  com- 
panies, 781. 
state  regulation  of  foreign  insurance  companies,  22. 
validity  of  policy  issued  by  company   failing  to  comply  with 

statutes,   26. 
validity  of  retaliatory  statutes,  35. 
vested  right  to  do  business  in  state.  34. 

what  constitutes  doing  business,  within  meaning  of  statutes,  36. 
KERR,  INS.— 57 


89S  INDEX. 

References  are  to  pages. 

FORFEITURE  OF  POLICY, 

additional  insurance,  407. 

alienation  or  change  of  title  of  insured  property,  401. 

alterations  or  repairs  on  insured  property,  405. 

assignment  of  insured  property,  8. 

breach  of  warranties,  319. 

change  of  location  of  insured  property,  365. 

change  of  residence  of  insured,  421. 

construction  of  provisions  for  forfeiture  most  strongly  against 
insurer,  135,  432. 

effect  of  breach  of  condition  on  rights  of  mortgagee,  429. 

effect  of  forfeiture  by  assured  on  rights  of  assignee  of  policy,  686. 

effect  of  forfeiture  by  assured  on  rights  of  creditors,  692. 

effects  of  misstatements  in  proofs  of  loss,  531, 

failure  to  operate  insured  factory,  420. 

increase  of  risk,   417. 

incumbrance  on  insured  property,  409. 

knowledge  of  agent  barring  company  from  forfeiting  policy,  217. 

liability  of  insurer  for  wrongful  forfeiture,  442. 

necessity  and  sufficiency  of  pleading  forfeiture,  769. 

necessity  of  establishing  defense  of  forfeiture,  778. 

necessity  of  notice  before  forfeiture   for  nonpayment  of  pre- 
mium, 305. 

nonforfeitable  policies,  307. 

nonpayment  of  premium,  302. 

pledge  of  policy  as  assignment  within  prohibition  in  policy,  687. 

power  of  general  agent  to  consent  to  additional  insurance,  185. 

power  of  solicitor  to  waive  forfeiture  of  policy,  203. 

prohibited  use  of  premises,  413. 

reinstatement    of    policy    forfeited    for    nonpayment    of    pre- 
mium, 312. 

necessity  of  notice  of  default  in  payment  of  premium,  297. 

self-executing  provisions  for  forfeiture  of  policy,  711. 

vacancy  of  insured  premises,  411. 

waiver  by  subordinate  lodge  of  forfeiture  of  certificate  of  mem- 
bership, 191. 

waiver  of  delay  in  furnishing  notice  and  proof  of  loss,  568. 

waiver  of  forfeiture  for  failure  to  furnish  notice  and  proof  of 
loss,  545. 

waiver  of  forfeiture  for  nonpayment  of  premium,  314, 

waiver  of  right  to  forfeit  policy,  705. 
FORM, 

of  insurance  contract,  16,  45. 


INDEX.  899 

References  are  to  pages. 

FORM  OF  ACTION. 

on  insurance  policy,  762. 
FORTHWITH, 

construction   of   condition   requiring   notice   of  loss   forthwith, 
476,  482. 
FRAUD, 

avoidance  of  policy  procured  by  fraud,  347. 
•     delivery  of  policy  obtained  by  fraud,  96. 

effect  of  misstatements   by  insured   during  examination  under 

oath,  539. 
effect  of  misstatements  in  proofs  of  loss,  531. 
in  procuring  reinstatement  of  forfeited  policy,  314. 
in  procuring  submission  of  claim  to  arbitration,  652. 
insertion  of  false  answer  in  application  by  agent  barring  right 

to  avoid  policy,  220. 
liability  of  insurer  for  loss  caused  by  fraud  of  insured,  375. 
misrepresentations  of  insurance  agent  binding  on  company,  222. 
rescission  of  policy  for  fraud,  150. 
FRAUDULENT  CONVEYANCES, 

right  of  creditors  to  proceeds  of  policy  procured  by  insolvent 
debtor,  692. 

G. 

GARNISHMENT, 

right  of  garnishing  creditor  to  furnish  proof  of  loss,  520. 
special  limitation  in  policy  as  applied  to  garnishment  proceed- 
ings to  reach  proceeds,  427. 

GENERAL  AGENTS. 

power  of  general  agents  of  insurance  companies,  181. 

power  of  general  agents  to  waive  notice  and  proof  of  loss,  561, 
GUARANTY, 

agreement  to  guaranty  fixed  revenue  from  lands  as  insurance 
contract,  12. 

reinsurance  as  contract  of  guaranty,  725. 
GUARANTY  INSURANCE, 

definition  of  contract,  6. 

sufficiency  of  notice  of  loss,  462. 

H. 

HEALTH  OF  INSURED, 

avoidance  of  policy  for  misrepresentations  as  to  health  of  in- 
sured, 340. 


900  INDEX. 

References  are  to  pages. 

HEALTH  OF  INSURED  (con.), 

effect  of  concealment  of  facts  as  to  health  of  insured,  347. 
effect  of  misrepresentations  as   to   health  and  family   history 
of  insured,  344. 

HISTORY, 

origin  of  insurance,  1. 

HOUSEHOLD  FURNITURE, 

construction  of  policy  on  household  furniture,  361. 

HUSBAND  AND  WIFE, 

insurable  interest  of  husband  or  wife  in  the  life  of  the  other,  287, 

680. 
insurable  interest  of  husband  in  property  of  wife,  281. 
right  of  wife  of  insured  to  furnish  proof  of  loss  of  husband's 

property,  517. 
right  to  proceeds  of  policy  on  husband's  life,  681. 

I. 

IMPLIED  INSURANCE, 

insurance  resulting  from  operation  of  law,  2. 

INCREASE  OF  RISK, 

forfeiture  of  policy  for  increase  of  risk,  417. 

INCUMBRANCE, 

as  defect  in  title  avoiding  or  forfeiting  policy,  398. 

forfeiture  or  avoidance  of  policy  for  incumbrance  on  insured 
property,  409. 

increase  of  risk  by  incumbrance  of  insured  property,  419. 

knowledge  of  agent  barring  right  to  avoid  policy  for  incum- 
brance on  property,  215. 

INDORSEMENTS, 

oonstruction  of  indorsement  as  part  of  policy,  131. 
effect  of  indorsements  on  policy,  118. 

INFANTS. 

capacity  of  infant  to  become  member  of  assessment  insurance 

company,  19. 
liability  of  infant  on  premium  note,  19. 
validity  of  policy  on  infant's  life,  18. 
validity  of  policy  on  property  of  infant,  19,  42. 

INHALING  GAS, 

what  constitutes  inhaling  gas,  within  meaning  of  policy,  387. 


INDEX.  901 

References  are  to  pages. 
INSANITY, 

liability  for  death  of  insured  by  suicide  while  insane,  395. 
presumption  as  to  sanity  of  insured,  777,  780. 

INSURABLE  INTEREST, 

basis  of  contract  of  insurance,  7. 

effect  of  termination  of  beneficiary's  interest  in  life  of  in- 
sured, 680. 

in  leased  premises,  279. 

in  mortgaged  property,  276. 

In  pledged  property,  277. 

in  property  held  by  bailee,  276. 

necessity  and  nature  of  insurable  interest,  273. 

necessity  of  insurable  interest  in  beneficiary  in  life  policy  taken 
out  by  insured,  680. 

necessity  of  insurable  interest  of  assignee  of  life  insurance 
policy,  687. 

necessity  of  insurable  interest  of  one  procuring  reinsurance,  725. 

necessity  of  pleading  insurable  interest,  766,  768. 

necessity  of  pleading  want  of  insurable  interest,  769. 

of  child  in  life  of  parent,  681. 

of  creditors  in  life  of  debtor,  680. 

of  creditor  in  property  of  debtor,  279. 

of  husband  or  wife  in  life  of  the  other,  287,  680. 

of  husband  in  property  of  wife,  281. 

of  master  in  life  of  servant,  288. 

of  receiver,  278. 

of  servant  in  life  of  master,  288. 

of  surety  in    life  of  principal,  289. 

of  tenant  in  life  of  landlord,  288. 

right  of  trustee  to  refuse  payment  to  beneficiary  for  lack  of  in- 
surable interest,  679. 

right  to  proceeds  of  policy  as  affected  by  insurable  interest,  673. 

INSURABLE  PARTIES, 

who  may  be  insured,  18, 
INTEMPERANCE, 

what  constitutes  intemperance,  within  meaning  of  policy,  392. 

INTENT  OF  PARTIES, 

construction  of  policy,  133. 

INTENTIONAL  INJURIES, 

liability  on  accident  policy  for  intentional  injuries,  390. 

INTEREST, 

law  governing  computation  of  interest  on  policy,  138. 


902  INDEX. 

References  are  to  pages. 

INTEREST  POLICY,  • 

definition,   68. 
INTERSTATE  COMMERCE, 

state  regulation  of  insurance,  21. 

INTERVENTION, 

effect  of  special  limitations  in  policy  on  right  of  intervenor,  427. 

INTOXICATION, 

breach  of  warranty  as  to  temperate  habits  of  insured,  337. 
proximate  cause  of  injury  or  death  of  insured,  379. 
what  constitutes  intemperance  relieving  from  liability  on  pol- 
icy, 392. 

INVOICES, 

duty  of  insured  to  keep  and  furnish  invoices,  541. 

IRON  SAFE  CLAUSE, 

in  policy  of  fire  insurance,  332. 

J. 

JOINDER  OF  CAUSES  OF  ACTION, 

enforcement  of  contract  to   issue  policy  in  action  to  recover 

loss,  57. 
reformation  and  enforcement  of  policy  in  same  suit,  762. 

JURISDICTION, 

of  actions  on  policies,  759. 

L. 

LANDLORD  AND  TENANT, 

insurable  interest  in  leased  premises,  279. 
insurable  interest  of  tenant  in  landlord's  life,  288. 

LEX  LOCI, 

law  of  place  of  contract  as  part  of  policy,  115. 

LICENSE, 

criminal  liability  of  insurance  agents  doing  business  for  un- 
licensed companies,  170. 

mandamus   to   compel   issuance  of   license,    25. 

penalty  against  adjuster  for  settling  loss  for  unlicensed  com- 
panies, 262. 

right  of  insurance  commissioner  to  revoke  license,  25. 

right  of  state  to  require  license  tax  from  foreign  companies,  25. 
LIGHTNING, 

liability  of  insurer  for  loss  caused  by  lightning,  372. 


INDEX.  9^3 


References  are  to  pages. 


LIMITATION  OF  ACTIONS, 

denial   of   liability  as   affecting  provisions   forbidding  suit  for 

certain  time,   713. 
effect  of  arbitration  proceedings  on  stipulations  regulating  time 

to  sue,  660. 
effect  of  bar  of  debt  on  insurable  interest  of  creditor,  680. 
on  insurance  policies,  760. 
proceedings  for  adjustment  as  waiver  of  special  limitation  in 

policy,  717. 
special  limitation  in  policy  of  insurance,  423. 
statute  shortening  time  of  insurer's  immunity   as  impairment 
of  vested  right,  35.  * 

LIVE-STOCK  INSURANCE, 

right   of   fire   insurance  company  to  insure   live-stock  against 
death,  40. 
LLOYD'S  INSURANCE, 

persons  on  Avhom  proof  of  loss  under  Lloyd's  policy  may  be 

served,  523. 
power  of  general  agent  of  Lloyd's  Association,  187. 
right  of  individuals  to  be  insurers,  21. 

validity  of  statutes  prohibiting  individuals  from  doing  insurance 
business,  26. 
LOCATION  OF  INSURED  PROPERTY, 
description  in  policy,  365. 

M. 

MAGISTRATES, 

necessity  and  sufficiency  of  magistrate's  certificate  to  proofs  of 
loss,  502. 
MARINE  INSURANCE, 

definition  of  contract  of  marine  insurance,  5. 

MASTER  AND  SERVANT, 

contract  with  employer  to  retain  relief  fund  from  wages,  14. 
insurable  interest  of  master  in  life  of  servant,  288. 
insurable  interest  of  servant  in  life  of  master,  288. 

MEASURE  OF  DAMAGES, 

effect  of  recovery  by  insured  from  person  causing  loss,  448.  ' 

extent  of  liability  of  insurer  in  action  on  policy,  432. 

for  breach  of  agreement  to  assign  poli-y,  443. 

for  breach  of  contract  to  deliver  paid-up  policy,  443. 

for  breach  of  contract  to  insure,  441. 

for  unlawful  forfeiture  of  policy,   442. 

to  policy  holder  not  accepting  contract  of  reinsurance,  753. 


904  INDEX. 

References  are  to  pages. 

MEDICAL  EXAMINERS, 

.  stipulation  making  medical  examiner  the  agent  of  insured,  211. 

MERGER, 

of  oral  in  written  contract  of  insurance,  64. 
preliminary  agreement  merged  iu  policy,  113. 

MISREPRESENTATIONS, 

avoidance  of  policy  for  misrepresentations  in  application,  319. 

effect  of  misstatements  in  proofs  of  loss,  531. 
'    in  procuring,  contract  of  reinsurance,  732. 
MISTAKE, 

reforqiation  of  policy  for  mistake,  145. 

MODIFICATION  OF  CONTRACTS, 

effect  of  subsequent  parol  agreements  on  policy,  114. 
of  policy  of  insurance,  150. 
MORTGAGES, 

effect  of  breach  of  conditions  on  rights  of  mortgagee,  429. 
effect   on   mortgagee   of   failure  of  insured   to   give  proofs   of 

loss,  464. 
insurable  interest  in  mortgaged  property,  276. 
right  of  mortgagee  to  furnish  proof  of  loss,  518. 
right  of  mortgagee  to  maintain  action  on  policy,  765. 
rights  of  mortgagor  and  mortgagee  to  proceeds  of  insurance 

policy,  677. 
subrogation  of  insurer  to  rights  of  mortgagee,  703. 
MURDER, 

effect  of  murder  of  insured  by  beneficiary,  685. 
liability  of  insurer  for  death  of  insured  by  murder,  391. 
MUNICIPAL  ORDINANCES, 

as  part  of  insurance  policy,  117. 
MUTUAL  BENEFIT  ASSOCIATIONS, 

agreement  for  sick  benefits  as  insurance  contract,  14. 
construction  of  contract  with  members,  143. 
contract  to  pay  benefits  from  assessments  as   insurance  con- 
tract, 12. 
effect  of  amendment  of  charter  and  by-laws,  121. 
effect  of  invalid  designation  of  beneficiary,  683. 
form  of  action  on  certificate  of  membership,  762. 
necessity  and  suflficiency  of  designation  of  beneficiaries,  683. 
necessity  and  sufficiency  of  notice  and  proof  of  loss,  453. 
levy  of  assessment  as  waiver  of  forfeiture  for  nonpayment  of 
prior  assessment,  316. 


INDEX.  905 

References  are  to  pages. 

MUNICIPAL  BENEFIT  ASSOCIATIONS   (con.), 

parties  to  actions  on  certificates  of  membership,  764. 
persons  who  may  furnish  notice  and  proof  of  loss,  520. 
refusal  to  furnish  blanks  as  waiver  of  proof  of  loss,  607. 
right  of  married  women  to  form  society  for  payment  of  benefits 

on  death  of  husbands,  40. 
right  to  change  designated  beneficiaries,  685. 
subordinate  lodges  as  agents  of  grand  lodge,  190. 
use  of  reserve  fund  for  reinsuring  risks  in  other  companies,  754. 
validity  of  requirement  that  claims  on  certificate  be  referred 

to  tribunals  of  society,  608. 

MUTUAL  COMPANIES, 

charter  and  by-laws  as  part  of  contract  of  insurance,  120. 

consolidation  of  companies,  741. 

contract  for  membership  in  mutual  company,  81. 

distribution  of  surplus,  443. 

necessity  and  sufficiency  of  proofs  of  loss,  453. 

stipulations  in  policies  making  solicitors  the  agents  of  insured, 

208. 
use  of  reserve  fund  to  reinsure  risks  in  other  companies,  754. 

N. 

NECESSARIES, 

premium  for  insurance  on  infant's  property  as  necessary,  19. 

NEGLIGENCE, 

liability  of  insurance  agent  to  his  principal,  268. 
liability  of  insurer  for  loss  caused  by  negligence  of  insured,  358, 
375. 

NOTARY  PUBLIC, 

necessity  and  sufficiency  of  notary's  certificate  to  proof  of  loss, 
502. 

NOTICE, 

necessity  of  notice  that  premium  is  due,  305,  311. 
presumption  as  to  giving  of  notice  of  premiums,  781. 

NOTICE  OF  LOSS, 

persons  who  must  furnish  notice  of  loss,  514. 

stipulations  in  policy  requiring  notice  and  proof  of  loss,  449. 

waiver  of  notice  of  loss,  545. 

NOVATION, 

ratification  of  reinsurance  agreement,  751. 


906  .  INDEX. 

References  are  to  pages. 

o. 

OBJECTIONS, 

necessity  and  sufficiency  of  objections  to  notice  and  proof  of 
loss,  573. 
OBLIOATION  OP  CONTRACT, 

validity  of  statutes  affecting  insurance  policies,  116. 

OCCUPATION, 

forfeiture  of  life  policy  for  breach  of  warranty  as  to  occupation, 
•       336. 
OCCUPATION  OF  PREMISES, 

forfeiture  of  policy  for  failure  to  operate  insured  factory,  420. 

forfeiture  of  policy  for  vacancy  of  insured  premises,  411. 
OPEN  POLICY, 

definition,  68. 

ORAL  CONTRACT, 

validity  of  oral  contract  of  insurance,  16. 

ORDINANCES, 

municipal  ordinances  as  part  of  insurance  policy,  117. 

ORIGIN, 

history  of  the  origin  of  insurance  contracts,  1. 

OUTWARD  AND  VISIBLE  MEANS, 

what  constitutes  death  or  injury  by  such  means,  385. 

OVER  VALUATION, 

of  property  covered  by  valued  policy,  69. 

P. 

PAID-UP  POLICIES, 

assignability   of   claim  against   insurer   for   refusal   to   deliver 

paid-up  policies,  689. 
measure  of  damages  for  breach  of  contract  to  deliver  paid-up 
policy,  443. 
PARENT  AND  CHILD, 

insurable  interest  of  child  in  life  of  parent,  681. 
right  to  proceeds  of  policy  on,  life  of  parent,  681. 

PAROL  CONTRACTS, 

application  as  part  of  parol  contract  of  insurance,  50. 
conditions  of  parol  contracts,  54. 

necessity  of  notice  and  proof  of  loss  under  parol  contract,  456. 
power  of  agent  to  make  parol  contract  of  insurance,  50. 
validity  of  parol  contract  to  insure,  45. 


INDEX.  907 

References  are  to  pages. 

PAROL  CONTRACTS   (con.), 

validity  of  preliminary  parol  contract,  76. 

what  constitutes  performance  of  parol  contract  to  issue  policy, 
114. 
PAROL  EVIDENCE, 

admissibility  to  vary  written  policy,  148. 

PAROL  WAIVER, 

power  of  agent  to  make  parol  waiver  of  conditions  in  policy,  240. 

PARTIES, 

necessary  parties  to  insurance  contract,  15,  17. 

persons  bound  by  award  in  arbitration  proceedings,  648. 

persons  who  must  furnish  notice  and  proof  of  loss,  514. 

persons  who  may  sue  on  contract  of  reinsurance,  721. 

to  action  on  insurance  policy,  764. 

waiver  of  objections  to  proof  of  loss  not  furnished  by  proper  per- 
son, 582. 

who  may  be  insured,  18. 

who  may  insure,  20. 
PARTNERSHIP, 

insurable  interest  of  partner  in  life  of  copartner,  288. 

right  of  partner  in  insured  firm  to  furnish  proof  of  loss,  519. 

right  of  partnership  to  be  insured,  18. 

PAYMENT, 

manner  of  payment  of  premium,  294. 
right  of  third  person  to  pay  premium,  297. 

PENALTIES, 

liability  of  adjuster  for  settling  losses  for  unlicensed  companies, 
262. 

statutes  imposing  penalties  on  agents  of  unlicensed  companies. 
173. 

validity  of  statute  fixing  penalties  for  removal  of  action  to  fed- 
eral court,  760. 

PLEADING, 

amendment  of  complaint  in  action  on  policy,  769. 

denial  of  liability  in  answer  as  waiver  of  failure  to  submit  to 

arbitration,  670. 
denial  of  liability  in  answer  as  waiver  of  proof  of  loss,  593. 
necessity  of  negativing  defense  of  limitations.  760. 
necessity  of  pleading  waiver  or  forfeiture,  713. 
necessity  to  plead  failure  to  furnish  proof  of  loss,  460. 
requisites  and  sufficiency  of  answer  in  action  on  policy,  769. 
requisites  and  sufficiency  of  complaint  in  action  on  policy,  766 
requisites  and  sufficiency  of  reply  in  action  on  policy,  770 


908  INDEX. 

References  are  to  pages. 
PLEDGES, 

insurable  interest  in  pledged  property,  277. 

pledge  of  policy  as  assignment  within  prohibition  in  policy,  687. 
validity  and  effect  of  pledge  of  policy,  689. 
POISON, 

effect  of  provisions  in  policy  exempting  from  liability  for  death 

from  taking  poison,  387. 
PREMIUM, 

burden  of  proof  as  to  payment  of  premium,  779. 

collection  of  premiums  as  waiver  of  right  to  avoid  or  forfeit 

policy,  715. 
conditions  in  policy  regulating  payment  of  premiums,  292. 
defenses  to  premium  notes,  303. 
definition  of  insurance  premium,  290. 
duty  to  return  premium  on  failure  of  policy,  308. 
effect  of  payment  of  premium  after  loss  has  occurred,  304. 
effect  of  payment  of  premium  by  third  person.  305. 
excuses  for  nonpayment  of  premium,  310. 
forfeiture  of  policy  for  nonpayment  of  premium,  30. 
manner  of  payment  of  premium,  294. 
necessity  of  agreement  as  to  rate  in  oral  contract,  57. 
necessity  of  agreement  for  fixed  premium,  86. 
necessity  of  notice  that  premium  is  due,  305. 
necessity  to  return  unearned  premium  on  cancellation  of  policy, 

222. 
power  of  agent  to  change  terms  for  payment  of  premium,  250. 
power  of  agent  to  collect  premium,  161,  244. 
power  of  agent  to  extend  credit  for  payment  of  premiums,  246. 
power  of  agent  to  waive  forfeiture  for  nonpayment  of  premiums, 

246. 
power  of  general  agent  to  reduce  premiums,  185. 
power  of  general  agent  to  waive  prepayment  of  premium,  184. 
power  of  special  agent  to  waive  prepayment  of  premium,  195. 
premium  one  of  the  essentials  of  insurance  contract,  15,  290. 
prepayment  of  premium  as  condition  precedent  to  parol  contract 

to  insure,  46. 
prepayment  of  premium  as  condition   precedent  to  validity  of 

policy,  73,  86,  290. 
prepayment  as  condition  to  validity  of  renewal  of  policy,  105. 
receipt  of  premium  after  forfeiture  as  waiver,  108. 
receipt  of  premium  estopping  company  from  avoiding  policy.  213. 
reinstatement  of  policy  forfeited  for  nonpayment  of  premium, 

312. 


INDEX.  909 

References  are  to  pages. 

PREMIUM    (con.), 

right  of  third  person  to  pay  premium,  297,  310. 

right  of  unauthorized  foreign  company  to  collect  premium,  37. 

waiver  of  nonpayment  of  premium,  314. 
PRESUMPTION, 

as  to  cause  of  injury  to  insured,  777. 

as  to  death  of  insured,  776,  780. 

as  to  delivery  of  policy,  781. 

as  to  giving  of  notice  of  premiums,  781. 

as  to  sanity  of  insured,  777,  780. 

as  to  suicide  of  insured,  777. 

as  to  vacancy  of  insured  premises,  780. 

of  fidelity  of  agents  of  company,  164. ' 

that  injury  to  insured  was  not  self-inflicted,  382. 
PRINCIPAL  AND  SURETY, 

insurable  interest  of  surety  in  life  of  principal,  289. 

reinsurance  as  contract  of  suretyship,  725. 
PRIOR  INSURANCE, 

knowledge  of  agent  barring  right  to  avoid  policy  for  prior  in- 
.  surance,  214. 
PRIVILEGED  COMMUNICATION, 

waiver  of  privilege  of  communication  to  physician,  776. 

PROCEEDS  OF  POLICY, 

persons  entitled  to  proceeds,  673. 

right  of  creditors  to  proceeds  of  policy,  691. 

right  to  change  beneficiary,  689. 

right  to  proceeds  of  policy  of  reinsurance,  721. 

PROCESS, 

agent  of  foreign  company  on  whom  process  may  be  served,  24. 

appointment  of  agent  on  whom  summons  may  be  served,  760. 

revocation  of  appointment  of  agent  to  receive  service,  159. 
PROMISSORY  NOTE, 

acceptance  of  note  as  payment  of  premium,  317. 

defenses  to  premium  notes,  303. 

payment  of  premium  by  note,  300. 

PROOF  OF  DEATH, 

validity  of  stipulation  requiring  actual  proof  of  death,  429. 
PROOFS  OF  LOSS, 

demand  for  arbitration  as  waiver  of  proofs  of  loss,  659. 

demand  of  proofs  of  loss  as  waiver  of  right  to  avoid  or  forfeit 
policy,  715. 


910  INDEX. 

References  are  to  pages. 

PROOFS   OF   LOSS    (con.), 

manner  of  service  of  notice  and  proofs  of  loss,  525. 
necessity  and  sufficiency  of  certificates  to  proofs  of  loss,  502. 
necessity  and  sufficiency  of  notice  and  proof  of  loss,  449,  453. 
necessity  of  alleging  the  furnishing  of  proofs  of  loss,  767. 
necessity  of  proof  in  action  on  contract  to  insure,  61. 
persons  who  must  furnish  proof  of  loss,  514,  520. 
power  of  adjuster  to  waive  proofs  of  loss,  262. 
power  of  agent  to  waive  proofs  of  loss,  184,  252. 
waiver  of  proofs  by  officer  of  company,  189. 
waiver  of  proofs  of  loss  in  general,  545,  607. 

PRO  RATA  CLAUSE, 

in  reinsurance  policy,  738. 

PROXIMATE   CAUSE, 

of  loss  under  life  insurance  policy,  377. 
risk  assumed  by  insurance  contract,  357. 

PUBLIC  CONVEYANCE, 

liability  for  injuries  received  on  public  conveyance,  393. 

R. 

RAILROADS, 

as  insurers  against  loss  by  fire  from  engines,  2. 
RATIFICATION, 

of  acts  of  insurance  agents,  264. 

of  reinsurance  agreement,  751. 

of  unauthorized  act  of  insurance  agent,  177. 

right  to  ratify  ultra  vires  contract  of  insurance,  39. 
REASONABLE  TIME, 

construction  of  provision  requiring  notice  of  loss  within  reason- 
able time,  480. 
REBUILDING, 

right  of  insurer  to  rebuild  or  repair  damaged  premises,  437. 
RECEIVERS, 

insurable  interest  of  receiver,  278. 
REFORMATION  OF  POLICY, 

in  general,  145. 

joinder  of  actions  to  reform  and  enforce  policy,  762. 

suit  to  reform  defective  policy,  85. 

REINSTATEMENT, 

of  policy  forfeited  for  nonpayment  of  premium,  312. 


INDEX.  911 

Eeterences  are  to  pages. 

REINSURANCE, 

construction  of  contract  of  reinsurance,  728. 

extent  of  liability  of  reinsurer,  735. 

form  and  essentials  of  contract,  725. 

nature  and  validity  of  contract,  719. 

necessity  of  insurable  interest  in  reinsured,  725. 

power  of  agent  to  make  contract  of  reinsurance,  726. 

ratification  of  reinsurance  agreement,  751. 

right  of  company  to  reinsure  its  risks,  723. 

right  of  mutual  assessment  company  to  reinsure,  41. 

rights  of  policy  holders  who  do  not  accept  new  contract,  753. 

term  of  contract,  102. 

RELEASE, 

effect  of  insured's  release  of  person  causing  loss,  700. 

RELIEF  FUND, 

contract  with  employer  to  retain  relief  fund  from  wages  as  insur- 
ance contract,  14. 
RENEWAL, 

construction  of  renewal  policy  of  fire  insurance  in   respect  to 

condition  of  property,  132. 
effect  of  renewal  of  policy,  106. 

necessity  for  prepayment  of  renewal  premium,  312. 
power  of  agent  to  agree  to  renewal  of  policy,  51. 
power  of  agent  to  collect  renewals,  244. 
power  of  special  agent  to  waive  payment  of  premium  on  renewal, 

195. 
validity  of  parol  contract  of  renewal,  105. 

REPLY, 

requisites  and  sufficiency  of  reply  in  action  on  policy,  770. 

RESCISSION, 

of  contract  of  reinsurance,  732. 
of  policy  of  insurance,  150. 

RESERVE  FUND, 

use  of  reserve  fund  to  reinsure  risks  in  other  companies,  754. 

RETALIATORY    STATUTES, 

right  to  exclude  companies  of  other  states  by  retaliatory  statutes, 

25. 
validity  and  effect  as  against  foreign  companies,  35. 

RETROACTIVE  POLICIES, 
validity,  99. 


912  INDEX. 

References  are  to  pages. 

REVIVAL  OF  POLICY, 

by  waiver  of  forfeiture,  108. 

power  of  agent  to  revive  forfeited  policy,  108. 

what  constitutes  revival,  108. 
REVOCATION, 

right  to  revoke  submission  of  claim  to  arbitration,  631. 

termination  of  authority  of  insurance  agent,  257. 
RIDERS, 

construction  of  rider  as  part  of  policy,  118. 
RIGHT  TO  PROCEEDS, 

persons  to  whom  policy  is  payable,  673. 
RIOTS, 

liability  of  insurer  for  loss  caused  by  riot  or  mob,  375. 

RISKS  AND  CAUSES  OF  LOSS, 

construction  of  insurance  contract,  356. 

RUNNING  POLICY, 
definition,  70. 

s. 

SERVICE, 

manner  of  service  of  notice  and  proof  of  loss,  525. 
SET-OFF*AND  COUNTERCLAIM, 

right  of  reinsurer  to  purchase  offsets  against  reinsured,  741. 
SETTLEMENT  OF  LOSS, 

avoidance  of  settlement,  444. 

effect  of  special  limitation  in  policy  on  right  of  action  on  agree- 
ment to  pay  loss,  760. 

negotiations  for  settlement  as  waiver  of  proof  of  loss,  595. 
SIGNATURE, 

necessity  and  sufficiency  of  countersigning  of  policy,  85. 
SMOKE. 

liability  of  insurer  for  loss  caused  by  smoke,  374. 
SOLICITORS, 

powers  of  solicitors  for  insurance,  195,  233. 
SOLVENCY, 

right  of  assignee  in  insolvency  to  proceeds  of  policy  on  insolv 
ent's  life,  697. 

SPECIAL  AGENTS, 

powers  of  special  or  local  agents  of  insurance  companies.  192. 
power  of  special  agent  to  receive  notice  and  proof  of  loss,  522. 


INDEX. 


Eeferences  are  to  pages. 


913 


SPECIFIC   PERFORMANCE, 

enforcement  of  agreement  to  renew  policy,  106. 
enforcement  of  parol  agreement  to  insure,  45. 
enforcement  of  oral  contract  to  issue  policy,  51,  56,  762. 
enforcement  of  parol  contract  of  insurance,  48. 
enforcement  of  proper  execution  of  policy,  85. 

STANDARD  POLICIES, 

construction  of  standard  policies,  141. 

definition,  70. 

power  of  agent  to  waive  conditions  in  standard  policy,  244. 

rights  to  proceeds  of  policy  under  Union  Mortgage  Clause,  678. 

validity  of  state  statutes  prescribing  standard  policy,  70. 

waiver  of  conditions  in  standard  policies,  711. 

STATUTE  OF  FRAUDS, 

agreement  to  reinsure  as  undertaking  to  answer  for  the  debt  or 

default  of  another,  725. 

validity  of  parol  contracts  to  insure,  52. 

STATUTES, 

effect  of  provision  forbidding  parol  contract  of  insurance,  49. 

regulation  of  agents  of  insurance  companies,  170. 

regulation  of  requirement  of  certificate  to  proof  of  loss,  505. 

regulation  of  right  of  individual  to  act  as  insurer,  21. 

regulations  as  to  notice  and  proofs  of  loss,  453. 

validity  of  policy  by  company  not  complying  with  statutes,  26. 

validity  of  statute  prescribing  standard  policy,  70. 

STEAM, 

liability  of  insurer  for  loss  caused  by  steam,  374. 

STOCK  IN  TRADE. 

construction  of  policy  on  stock,  and  incidents  thereto,  363. 

SUB-AGENT, 

termination  of  powers  of  sub-agent,  260. 

SUBJECT-MATTER, 

of  insurance  contract,  354. 

SUBROGATION, 

of  insurer  to  claim  of  person  receiving  payment  of  loss,  699. 

SUCCESSIVE    LOSSES, 

liability  of  insurer  for  successive  losses  on  insured  property,  441. 
submission  to  arbitration  in  case  of  successive  losses,  631. 

KERR,  INS.— 58 


914  INDEX. 

References  are  to  pages. 
SUICIDE, 

as  death  from  violation  of  law  within  meaning  of  policy,  389. 
liability  of  company  on  death  of  insured  by  suicide,  337,  394. 
presumption  as  to  suicide  of  insured,  777. 

SURPLUS, 

distribution  of  surplus  in  mutual  companies,  443. 

T. 

TAXATION, 

of  foreign  company  settling  up  business  in  state,  37. 

right  of  state  to  require  license  tax  from  foreign  companies,  25. 
TENDER, 

necessity  and  sufficiency  of  tender  of  payment  of  premium,  311. 
TERMINATION  OP  AGENCY, 

revocation  of  authority  of  insurance  agent,  257. 
TERMINATION  OF  POLICY, 

effect  of  assignment  for  benefit  of  creditors,  104. 
TERM  OF  INSURANCE, 

duration  of  contract,  100. 
TERMS, 

of  insurance  policy,  65. 
TIME, 

computation  of  timfe  for  furnishing  notice  and  proof  of  loss,  457. 

for  choosing  umpire  in  arbitration  proceedings,  638. 

of  taking  effect  of  parol  contract  of  fire  insurance,  55. 

when  demand  for  arbitration  must  be  made,  626. 

within  which  amended  proof  of  loss  must  be  served,  580. 

within  which  certificate  of  magistrate  must  be  furnished,  511. 

within  which  proof  of  loss  must  be  made,  506. 
TITLE, 

stipulation  avoiding  policy  for  defect  in  title,  398. 

warranties  as  to  title,  330. 
TOTAL  DISABILITY, 

what  constitutes  total  disability  within  meaning  of  policy,  379. 
385,  447. 

TOTAL  LOSS, 

necessity  of  proofs  of  loss  where  loss  is  total,  457. 

necessity  of  submission  to  arbitration  in  case  of  total  loss,  620. 

what  constitutes  total  loss,  445. 

TRANSFER  OF     INSURED  PROPERTY. 

forfeiture  of  policy  for  change  of  title,  401. 


INDEX.  915 

Eeferences  are  to  pages. 

TRUSTS, 

construction  of  policy  on  property  held  in  trust,  365. 
insurable  interest  in  trust  property,  278. 

right  of  cestui  que  trust  to  proceeds  of  policy  procured  with 
trust  funds,  693. 

ULTRA  VIRES  CONTRACT, 

contract  of  reinsurance,  748. 

estoppel  of  insurer  to  plead  ultra  vires,  42,  679. 

of  insurance  companies,  38. 
UMPIRE, 

selection  of  umpire  in  arbitration  proceedings,  636. 
UNION  MORTGAGE  CLAUSE, 

rights  of  mortgagor  and  mortgagee  to  proceeds  of  standard  pol- 
icy, 678. 
USE  OF  PREMISES, 

forfeiture  of  policy  for  prohibited  use  of  premises,  413. 

warranty  as  to  use  and  occupation  of  insured  building,  334. 

1 

V. 

VACANCY, 

forfeiture  of  policy  for  vacancy  of  insured  premises,  411. 

increase  of  risk  by  vacancy  of  premises,  419. 

presumption  as  to  vacancy  of  insured  premises,  780. 

waiver  of  right  to  forfeit  policy  for  vacancy  of  premises,  709. 
VALUED  POLICY, 

definition,  68. 

effect  of  misstatements  in  proofs  of  loss  under  valued  policies, 
537. 

necessity  of  proofs  of  total  loss  under  valued  policy,  457. 

VALUE  OF  INSURED  PROPERTY, 

effect  of  misrepresentations  as  to  value,  344. 

VESTED  RIGPT, 

of  beneficiary  in  policy  of  life  insurance,  679,  689. 

of  foreign  insurance  company  to  do  business  in  state,  34.  , 

VIOLATION  OF  LAW, 

liability  of  insurer  for  death  resulting  from  violation  of  law,  388. 

VOLUNTARY  EXPOSURE  TO  DANGER, 

what  constitutes  voluntary  exposure  relieving  insurer  from  lia- 
bility, 396. 


916  INDEX. 

References  are  to  pages. 

w. 

WAGER  POLICY, 

definition,  67. 

necessity  of  insurable  interest,  273. 

WAIVER, 

authority  of  insurance  agent  to  waive  conditions  in  policy,  156. 

consent  to  assignment  of  policy   as  waiver   of   defense  to  its 
validity,  686. 

demand  for  arbitration  as  waiver  of  proofs  of  loss,  659. 

demand  for  certificate  of  magistrate  as  waiver  of  defects  in 
proofs  of  loss,  507. 
'     effect  on  contract  of  reinsurance  of  waiver  of  conditions  in  origi- 
nal policy,  734. 

election  to  rebuild  as  waiver  of  defense,  439. 

limitation  in  policy  on  right  of  agent  to  waive  conditions  therein, 
235. 

necessity  of  pleading  waiver,  771. 

of  conditions  in  policy,  432. 

of  conditions  requiring  prepayment  of  premium,  293, 

of  delay  in  notice  and  proof  of  loss,  568. 

of  forfeiture  by  receipt  of  premium,  108,  213. 

of  forfeiture  for  nonpayment  of  premium,  314. 

of  misrepresentation  or  breach  of  warranty  giving  right  to  for- 
feit or  avoid  policy,  352. 

of  notice  and  proofs  of  loss,  545. 

of  proof  of  loss  by  failure  to  make  demand  therefor,  506. 

of  right  to  arbitration,  661. 

of  right  to  avoid  or  forfeit  policy  in  general,  705. 

power  of  adjuster  to  waive  proofs  of  loss,  262. 

power  of  agent  to  waive  conditions  after  issuance  of  policy,  231. 

power  of  agent  to  waive  conditions  in  policy,  217. 

power  of  agent  to  waive  forfeiture  of  policy,  108. 

power  of  agent  to  waive  forfeiture  for  nonpayment  of  premiums, 
246. 

power  of  agent  to  waive  proofs  of  loss,  252. 

power  of  agent  to  waive  terms  of  payment  of  premium,  294. 

power  of  general  agent  to  waive  condition  against  additional  in- 
surance, 185. 

power  of  general  agent  to  waive  prepayment  of  premium,  184. 

power  of  general  agent  to  waive  proofs  of  loss,  184. 

power  of  general  agent  to  waive  written  application,  185. 

power  of  solicitor  to  waive  forfeiture  of  policy,  203. 

power  of  special  agents  to  waive  conditions  in  policy,  195. 


INDEX.  917 

References  are  to  pages. 
WAIVER  (con.), 

power  to  waive  condition  requiring  countersigning  of  policy,  86. 

receipt  of  premium  as  waiver  of  right  to  avoid  policy,  108,  213. 

retention  of  consideration  as  waiver  of  riglit  to  cancel  policy,  44. 

right  of  insurer  to  waive  notice  and  proof  of  loss,  450. 

what  constitutes  waiver  of  conditions  by  agent,  235. 
WALKING  ON  RAILROAD, 

liability  of  insurer  for  injuries  received  while  walking  on  road 
bed,  390. 

Warehousemen, 

as  insurers,  2. 

insurable  interest  of  warehousemen  in  stored  property,  276. 

WARRANTIES, 

insertion  of  false  answers  in  application  by  agent  barring  right 

to  avoid  policy,  220. 
knowledge  of  agent  as  to  falsity  of  warranties  barring  right  to 

avoid  policy,  226. 
nature  and  effect  of  warranties  in  applications  apd  policies,  310. 

WATCHMEN, 

agreement  in  policy  to  keep  watchman  on  insured  premises,  333. 

WATER, 

liability  of  insurer  for  damage  by  water,  373. 

WILLS, 

right  to  dispose  of  proceeds  of  life  insurance  policy  by  will,  683. 

WIND, 

liability  of  insurer  for  damage  caused  by  wind,  373,  436. 
indemnity  against  windstorms  as  insurance  contract,  14. 


y 


AA    000  760  104    0 


